Statement of Administration Policy: H.R. 3005 - Securities Amendments of 1996

(House)
(Fields (R) Texas)

Although the Administration supports provisions in H.R. 3005 that would protect investors and reduce the cost of State and Federal regulation of the markets, the Administration would have serious concerns with the bill if it were amended to include reauthorization provisions which would reduce or eliminate certain securities registration and transaction fees. These fees are currently used to offset almost two thirds of the SEC's appropriation. Eliminating or reducing the fees, in a time of declining discretionary resources, would require the SEC to compete for funding with other worthy programs, including criminal justice programs, immigration initiatives, and research and technology programs.

Many provisions in H.R. 3005 have been improved considerably over earlier versions of the legislation. These improvements to the bill will promote investor protection and marketplace integrity. In particular:

• The provisions concerning margin requirements are now consistent with an SEC proposal endorsed by the Administration last year.
• The removal of the provision concerning suitability of investments is consistent with the rules on this subject proposed by the National Association of Securities Dealers and by the banking regulators, including the Office of the Comptroller of the Currency.

The Administration's continued support for H.R. 3005 is contingent on the retention of these improvements and keeping the bill free of any reauthorization provisions which would reduce or eliminate certain SEC fees.