financialservices.house.gov
Cmte Financial Services (R)
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Chairman Hensarling Calls on SEC to Focus Increased Funding on Mission and Priorities
Washington, Nov 18 -
WASHINGTON -- Financial Services Committee Chairman Jeb Hensarling (R-TX) delivered the following opening statement at this morning’s oversight hearing on the Securities and Exchange Commission: Vigorous oversight is also needed to ensure the SEC is a good steward of its resources, both its time and its budget – a budget that has increased dramatically by more than 64 percent over the last 10 years, while the monitors on my left and right show the rapidly rising red ink of our national debt. Since Chair White’s last appearance before our committee, we have seen both good and bad news. The good: The SEC finally completed the bipartisan JOBS Act rulemakings to implement the Reg A+ and crowdfunding titles. This is noteworthy and commendable. Further, the SEC has asserted its jurisdiction to hopefully stop the Financial Stability Oversight Council from regulating asset managers like banks. This, too, is commendable. Regrettably, there is more to discuss that is not so commendable. On a 3 to 2 partisan vote, a pay ratio rule was pushed through, which may appease left-wing activists but does nothing to protect investors or facilitate capital formation for small and medium-size businesses. It does nothing to help struggling families get ahead. This is another example of the SEC squandering its precious resources on rulemaking that again does nothing to protect investors or facilitate capital formation. Additionally, as much as left-wing activists may wish to drag the SEC into political advocacy, the Citizens United decision does not involve or implicate the federal securities laws. A political disclosure rulemaking is not within the SEC’s core competency or, more importantly, its mission. It would simply create more opportunities for abuse and politicized enforcement, as we’ve seen with the IRS scandal, and further damage the SEC’s credibility. The SEC should instead redouble efforts to simplify the disclosure regime and renew its commitment to the materiality doctrine articulated by the Supreme Court in 1976. Instead of modernizing our proxy system, the Chair’s action to cut off staff guidance to public companies in the middle of this past proxy season was ill-advised. The “universal proxy ballot” favors special interests and short-termism rather than benefiting the vast majority of public company shareholders. Finally, the SEC has an opportunity to act and stop the Labor Department from making financial advice and retirement planning less available and more expensive for Americans with low and moderate incomes. This we hope they successfully do. Real investor protection comes from innovative capital markets that are vigorously policed for fraud and deception, allow capital formation to flourish, and give investors the freedom to make informed investment decisions free from government interference and control. ###
This Committee is committed to conducting vigorous oversight of the SEC because the SEC’s three-part mission is an important one as Americans continue to struggle through an economy that is under-performing. It is on their behalf that this Committee acts to ensure the SEC protects investors, maintains fair, orderly and efficient markets, and promotes capital formation – key ingredients in growing a healthy economy with more opportunity for all.