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Cmte Financial Services (R)
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Supporting Main Street Investment

Washington, Sep 26 -

The Subcommittee on Capital Markets, Securities, and Investments held a hearing today to examine the mission, operations, and activities of the SEC’s Division of Investment Management to ensure it is conducting itself consistently with the SEC’s tri-fold mission to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

“Hardworking families in West Michigan and across the nation rely on the capital markets to save for each stage of life. Whether it is saving for college, homeownership, or retirement, the capital markets play an integral role at each milestone.  In order to help more Americans achieve financial security in the future, we must continually improve our capital markets so they are as efficient as possible,” said Subcommittee Chairman Bill Huizenga (R-MI). “While we have a 21st century financial marketplace, we’re operating under a 20th century regulatory structure. I am encouraged by the work and priorities of the SEC’s Division of Investment Management and I look forward to hearing more about how we can work together to improve the lives of American taxpayers.”

Key Takeaways

• The Securities and Exchange Commission (SEC) is the primary regulator of the asset management industry, and its Division of Investment Management should continue to ensure that retail investors have access to investment advice and a variety of fund products while ensuring that they receive adequate disclosure and protection.
• The Division must ensure that investment advisers are considering their clients’ best interests when it comes to considering proxy advisor recommendations in proxy voting decisions. 
• The SEC should advance congressionally directed rulemakings that aim to facilitate capital formation, such as completing rulemakings regarding ETF research and Business Development Company (BDC) regulatory modernization.

Topline Quotes from Witnesses

“Our capital markets are the envy of the world. I believe that when the Division is dynamic and responsive, it can help our markets continue to grow and develop for the benefit of all market participants, including Main Street investors. Modernizing our regulatory framework and engagement with market participants begins with looking back at existing policies and approaches and assessing whether they are (or remain) efficient, effective, and appropriate. Current policies may not be doing what they were originally intended to do, may not take into account advancements in technology, business, and investor relationships, or may have unintended consequences and costs. In order to be as dynamic and responsive as the markets we regulate, the Division is undertaking several initiatives to modernize our regulatory approach under the Investment Company Act and Investment Advisers Act in light of significant developments in the asset management industry.” – Dalia Blass, Director, Division of Investment Management, U.S. Securities and Exchange Commission