Press Releases

Wagner Delivers Opening Remarks at Hearing to Conduct Oversight of the SEC’s Division of Investment Management

Washington, September 19, 2023 -

Today, the House Financial Services Subcommittee on Capital Markets, led by Chairman Ann Wagner (MO-02), is holding a hearing entitled “Oversight of the SEC’s Division of Investment Management.”
Watch Chairman Wagner’s opening remarks here.
Read Chairman Wagner’s opening remarks as prepared for delivery:
“This hearing will examine the actions taken by the SEC’s Division of Investment Management under Director William Birdthistle’s leadership that have compromised the Commission’s mission to protect investors, maintain fair markets, and facilitate capital formation.
“This is the third oversight hearing that this subcommittee has held this year as part of our effort to hold Chair Gensler’s SEC accountable for its overly burdensome, sweeping new regulatory regime that will affect every corner of the financial services industry.
“The Division of Investment Management has broad regulatory responsibility over registered investment companies, investment advisers, asset managers, and other entities that manage money on behalf of millions of Americans. The paternalistic regulations coming out of this division undermine the financial goals of millions of American families relying on strong financial returns for their retirement.
“Since spring 2021, the SEC has proposed over 50 rulemakings without a thorough evaluation of their cumulative effects. This approach threatens financial market stability and imposes undue burdens on participants and investors.
“The SEC has not done its homework, and it only underscores the importance of comprehensive cost-benefit analysis.
“The SEC has hastily rolled out a series of interconnected rule proposals in a span of just two-and-a-half years, jeopardizing the integrity of our capital markets and putting investors, especially those saving for retirement, at undue risk. Instead of diligently analyzing how these proposals will impact one another, the Commission is neglecting its duty to protect investors and ensure fair markets.
“This rushed approach reveals a flawed understanding of the markets and the participants it aims to regulate and relies on speculative statements rather than concrete evidence.
“The complexity of these proposals not only deters public input but also risks causing chaos in the capital markets through overlapping and conflicting rules.
“And when market participants do offer their input, the SEC has repeatedly disregarded their valuable insights. Short or inadequate comment periods limit feedback, contradicting rulemaking process requirements. Ensuring the public’s voices are heard is crucial, and the SEC must encourage robust input and analysis.
“Furthermore, the SEC’s reluctance to consider congressional views is also deeply concerning.
“For example, the SEC’s refusal to extend the relief provided in its 2019 MiFID II No-Action Letter disregards bipartisan Congressional requests for an extension and a market impact assessment.
“I’d like to remind the Director that the House directed the SEC to extend its no-action letter relief by passing H.R. 2622, which passed unanimously, in addition to sending several bipartisan letters from this committee and our colleagues in the Senate. The SEC’s decision to ignore calls for relief erodes U.S. market competitiveness and endangers access to essential research services for buyside managers.
“Lastly, specific proposals like Swing Pricing, Hard Close, and Liquidity Risk Management have raised alarms.
“If adopted, these proposals would create investor confusion and weaken the financial returns over 100 million Americans currently invested in mutual funds have experienced for decades.
“These proposals lack a solid evidentiary foundation and rigorous analysis, raising questions about their alignment with the SEC’s mandate to protect investors and maintain fair markets.
“I share similar concerns with the SEC’s recent proposal on predictive data analytics.
The proposal’s burdensome, one-size-fits-all approach will limit investor choice and access, increase costs for retail investors, and lead to a decline in retail investor participation right when it has reached an all-time high.
“The SEC’s regulations should be technology neutral to promote innovation and efficiency in capital markets. If the SEC intends to be a technology regulator, it should seek explicit authority from Congress.
“Throughout this hearing, we will address these pressing issues and seek answers from the SEC’s Division of Investment Management.
“Ensuring the SEC’s rulemaking process is transparent, accountable, and serves the best interest of American investors and financial markets is our priority.
“Thank you for your attention, and I look forward to a productive discussion today.”

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