June 14, 2016
The text of Chairman Shelby’s remarks, as prepared, is below.
“This morning we will receive testimony from Securities and Exchange Commission Chair Mary Jo White. Oversight of the Commission is an important part of this Committee’s jurisdiction.
“The SEC is an independent agency tasked with protecting investors; maintaining fair, orderly and efficient markets; and facilitating capital formation.
“The SEC is responsible for ensuring transparency so that investors have adequate information to make investment decisions, and to mitigate conflicts of interest, fraud and manipulation.
“This regulatory paradigm is one reason why our capital markets have long-been the envy of the world and the lifeblood of our economy.
“Excessive and unnecessary regulation, however, may endanger America’s status as the world’s preferred financial center.
“First and foremost, the SEC should focus on its core mission. This has become more difficult as the Commission has come under increased pressure to expand its mission and cater to special interests.
“Examples of such efforts include attempts to force the SEC to mandate disclosure on climate change and political contributions.
“These efforts are not new, and the SEC has withstood political pressure in the past. It is my expectation that it will continue to do so in the future.
“Chair White, as you pointed out in a 2013 speech, ‘…we make our decisions based on an impartial assessment of the law and the facts and what we believe will further our mission – and never in response to political pressure, lobbying, or even public clamor.’
“The SEC must continue to adhere to those principles and uphold its fundamental mission.
“It should also periodically review the appropriateness of its existing rules.
“For example, while the Commission has undertaken work to review equity market structure, it has not engaged in a comprehensive review of its rules, even in light of the so-called Flash Crash, which happened over six years ago.
“I also hope the SEC will continue to take very seriously the importance of strong economic analysis when promulgating rules.
“As we have seen, agencies that fail to undertake such an analysis in their rulemakings are vulnerable to legal challenges, as well they should be.
“An agency with thousands of employees like the SEC should be able to analyze in detail the impact of its rules on the markets, investors, financial products and the broader economy.
“This is especially true today, given the cumulative impact and unintended consequences of the myriad new rules stemming from the financial crisis.
“If the cost of a rule outweighs its benefit, then the rule should be eliminated. If a rule passes cost/benefit muster, it should then be implemented by the appropriate agency.
“The SEC has the primary expertise in capital markets and should be the lead agency in regulating them.
“Specifically, I am concerned that attempts by other federal agencies to erode the SEC’s jurisdiction could undermine the integrity and functioning of these markets.
“Recent examples of this include: the Department of Labor’s fiduciary duty rule, the FSOC’s continued focus on asset managers, and the Federal Reserve’s targeting of broker dealers under the guise of reining in what it calls ‘shadow banking.’
“The SEC has eight decades of specific expertise in these matters. This should outweigh the desires of other regulators to expand their powers at the expense of investors and the markets.
Chair White, I look forward to hearing your thoughts on these issues and the future agenda of the SEC.”
Shelby Opening Statement at SEC Oversight Hearing
WASHINGTON, DC – Tuesday, June 14, 2016 – U.S. Senator Richard Shelby (R-Ala.), Chairman of the United States Senate Committee on Banking, Housing, and Urban Affairs, today delivered the following opening statement during a full committee hearing entitled “Oversight of the U.S. Securities and Exchange Commission.”The text of Chairman Shelby’s remarks, as prepared, is below.
“This morning we will receive testimony from Securities and Exchange Commission Chair Mary Jo White. Oversight of the Commission is an important part of this Committee’s jurisdiction.
“The SEC is an independent agency tasked with protecting investors; maintaining fair, orderly and efficient markets; and facilitating capital formation.
“The SEC is responsible for ensuring transparency so that investors have adequate information to make investment decisions, and to mitigate conflicts of interest, fraud and manipulation.
“This regulatory paradigm is one reason why our capital markets have long-been the envy of the world and the lifeblood of our economy.
“Excessive and unnecessary regulation, however, may endanger America’s status as the world’s preferred financial center.
“First and foremost, the SEC should focus on its core mission. This has become more difficult as the Commission has come under increased pressure to expand its mission and cater to special interests.
“Examples of such efforts include attempts to force the SEC to mandate disclosure on climate change and political contributions.
“These efforts are not new, and the SEC has withstood political pressure in the past. It is my expectation that it will continue to do so in the future.
“Chair White, as you pointed out in a 2013 speech, ‘…we make our decisions based on an impartial assessment of the law and the facts and what we believe will further our mission – and never in response to political pressure, lobbying, or even public clamor.’
“The SEC must continue to adhere to those principles and uphold its fundamental mission.
“It should also periodically review the appropriateness of its existing rules.
“For example, while the Commission has undertaken work to review equity market structure, it has not engaged in a comprehensive review of its rules, even in light of the so-called Flash Crash, which happened over six years ago.
“I also hope the SEC will continue to take very seriously the importance of strong economic analysis when promulgating rules.
“As we have seen, agencies that fail to undertake such an analysis in their rulemakings are vulnerable to legal challenges, as well they should be.
“An agency with thousands of employees like the SEC should be able to analyze in detail the impact of its rules on the markets, investors, financial products and the broader economy.
“This is especially true today, given the cumulative impact and unintended consequences of the myriad new rules stemming from the financial crisis.
“If the cost of a rule outweighs its benefit, then the rule should be eliminated. If a rule passes cost/benefit muster, it should then be implemented by the appropriate agency.
“The SEC has the primary expertise in capital markets and should be the lead agency in regulating them.
“Specifically, I am concerned that attempts by other federal agencies to erode the SEC’s jurisdiction could undermine the integrity and functioning of these markets.
“Recent examples of this include: the Department of Labor’s fiduciary duty rule, the FSOC’s continued focus on asset managers, and the Federal Reserve’s targeting of broker dealers under the guise of reining in what it calls ‘shadow banking.’
“The SEC has eight decades of specific expertise in these matters. This should outweigh the desires of other regulators to expand their powers at the expense of investors and the markets.
Chair White, I look forward to hearing your thoughts on these issues and the future agenda of the SEC.”
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