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WASHINGTON, D.C. – The American Securities Association (ASA) released the following statement from President & CEO Chris Iacovella ahead of U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler’s testimony before the Senate Appropriations Subcommittee on Financial Services and General Government (FSGG) budget hearing:
“Over the last two years, the SEC has pushed forward one of the most ambitious and consequential rulemaking agendas in the Agency’s history without the express authority from Congress to do so. While we support some of the SEC’s policy goals- such as the gamification of trading and stopping China’s exploitation of American investors and our markets- we are deeply concerned about the blatant disregard for investor protection and the Constitution this Commission has shown by moving forward with collection of the personal and financial information of every American investor. We also take issue with the complete absence of a capital formation agenda and this Commission’s willingness to falsely claim that financial products, like bank loans, are securities under the SEC’s jurisdiction. ASA appreciates the work of the Subcommittee to hold agencies like the SEC accountable and ensure that the SEC is carrying out its statutory obligations. We look forward to working with all Members on these critical issues.”
On the SEC’s regulatory agenda, ASA has significant concerns with the SEC’s “fast-tracking” of its agenda, limiting public comment periods and shortcutting economic analysis of rules as required by the Administrative Procedure Act. ASA President & CEO Chris Iacovella penned an op-ed published highlighting The True Cost of the SEC’s Regulatory Overreach.
Additionally, ASA again raises concerns about the SEC’s collection of personal and financial information (PII) within the Consolidated Audit Trail (CAT). ASA has been at the forefront of advocacy in the industry and Members of Congress, to remove retail investor PII from the CAT. We thank U.S. Senator John Kennedy (R-LA) and his numerous cosponsors for introducing S. 2230- the Protecting Investors’ Personally Identifiable Information Act.
On MiFID II, ASA is greatly disappointed by the SEC’s decision to not extend critical MiFID II relief. ASA recommends that Congress prevent the SEC from importing a European regulation that has been proven not to work. The ASA strongly supports legislation, the House-passed H.R. 2622 and S. 2141, which would extend the SEC’s no-action position by six months and require the SEC to examine MiFID II’s impact on research coverage for small companies.
On injecting politics into public companies, ASA believes the SEC has completely overstepped its statutory authority by adopting 14a-8, in which ASA believes matters of corporate governance reside with the states. We also think this Committee should question what authority an unelected staffer or political appointee at the SEC has in deciding what issues do and do not have a “broad societal impact” on this country’s political debate.
Finally on capital formation, ASA is concerned that none of the proposed or potential future rulemakings that appear on the SEC’s current agenda could be considered a capital formation initiative. Similar to how the 2012 Jumpstart Our Business Startups (JOBS) Act was developed, Congress must act due to the SEC’s lack of leadership in this area and its failure to fulfill an integral part of its statutory mission.
In April 2023, ASA sent a letter to the full House Financial Services Committee in advance of SEC Chairman Gary Gensler’s testimony on the Agency’s regulatory developments, rulemakings, and activities.
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About the American Securities Association
American Securities Association, based in Washington, DC, represents the retail and institutional capital markets interests of regional financial services firms who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth. ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases prosperity. The ASA has a geographically diverse membership of almost one hundred members that spans the Heartland, Southwest, Southeast, Atlantic, and Pacific Northwest regions of the United States.