Chairman Scott Garrett Opening Statement for Hearing Entitled “Legislative Proposals to Enhance Capital Formation, Transparency, and Regulatory Accountability”

May 17, 2016
the staff of the Ridgewood blog

Ridgwood NJ,  Capital Markets and Government-Sponsored Enterprises Subcommittee Chairman Scott Garrett (NJ-05) delivered the following remarks at a hearing entitled, “Legislative Proposals to Enhance Capital Formation, Transparency, and Regulatory Accountability”:

Congressman Scott Garrett’s opening remarks as prepared for delivery:

Today, the Subcommittee meets to examine three important pieces of draft legislation that continue our work over the last five years to modernize our nation’s securities laws, promote transparency and competition in our capital markets, and bring real reform and accountability to the SEC’s rulemaking process

Recent polls indicate that roughly two-thirds of Americans believe our country is headed in the wrong direction, and a declining number of people believe that their children will be better off financially than they have been

So despite the big promises that have come with granting vast and in some cases unlimited authority to the federal bureaucracy, most Americans aren’t buying the argument that a bigger Washington leads to a bigger paycheck – or even to a paycheck at all

Fortunately, our Subcommittee has for five years tried an alternative approach which seeks to empower entrepreneurs, investors, and small businesses – not bureaucrats

This approach has led to some legislative successes – most notably with the JOBS Act of 2012 – but maybe more importantly it has led Congress and regulators to think in different ways than they historically have

So today we continue our important work with these three pieces of legislation:

First, we will consider the SEC Regulatory Accountability Act, which would require that the SEC determine that the benefits of any regulation they are considering actually outweigh its economic and regulatory costs

Even President Obama – through executive orders issues in 2011 – has recognized the importance of economic analysis in rulemakings; this legislation would merely codify much of the President’s executive order for the SEC

Second, we have the Investment Advisers Modernization Act from Mr. Hurt

This is a long overdue piece of legislation that would allow private capital to continue to play a critical role in our economy, and which reduces many of the unnecessary bureaucratic requirements that have the effect of starving middle market businesses of the capital that they need

Third, Mr. Duffy has put forward the “Proxy Advisor Form Reform Act of 2016” which would – for the first time in memory – provide some much needed sunlight to the way in which proxy advisory firms develop and distribute their advice

This Subcommittee has led the charge in Congress for reform of the proxy advisory industry, and this draft legislation is the next step in those efforts

So I want to thank all of the sponsors for their hard work on all of these bills and I look forward to hearing from our witnesses.