Rep Cmte Financial Services

Financial Services Committee Chairman Bachus Proposing “SEC Modernization Act”

Washington, Aug 2 -

Financial Services Committee Chairman Spencer Bachus is drafting legislation to restructure the Securities and Exchange Commission and implement reforms recommended by the SEC’s Inspector General, the Government Accountability Office and a consultant’s report mandated by the Dodd-Frank Act.

Chairman Bachus emphasized that the reform proposal should not be interpreted as criticism of SEC Chairman Mary Schapiro or any of her predecessors.  “It is the structure of the agency itself that is the main problem and over the years Congress has only increased its dysfunctional structure through fragmentary and piecemeal amendments rather than the comprehensive reform that is needed.”

“The SEC is structurally flawed and suffers from operational inefficiencies and organizational incoherence.  This legislation will be a comprehensive restructuring of the SEC.  It will make the SEC more efficient, consolidate duplicative offices, enable the agency to use better technology, and strengthen ethical safeguards to avoid conflicts of interest,” said Chairman Bachus.

The Bachus proposal will be called the SEC Modernization Act.

While some have said the SEC cannot be expected to improve its performance without additional funding, Chairman Bachus noted the SEC’s budget this year is $1.185 billion, up six percent over 2010 — and nearly triple what it was a decade ago.

“Simply providing yet more funding to the SEC without first correcting its flaws will do nothing but prolong these inefficiencies and structural failures,” said Chairman Bachus.  “Without fundamental reform, there will never be any real improvement to the SEC’s operations.”

The draft proposal includes the following reforms:

Consolidation of Duplicative Offices

Managerial and Ethics Reforms

Additional Improvements

Dodd-Frank Section 911 established the SEC Investor Advisory Committee.  Reforms to this provision shall include limiting the term of service for Committee members to one-term of five years, which shall be staggered, for all new Committee members who replace the current members.