Statement of Administration Policy: H.R. 5726 - Investment Adviser Regulatory Enhancement and Disclosure Act of 1992

(House)
(Boucher (D) Virginia and 8 others)

The Administration has no objection to House passage of H.R. 5726. However, the Administration will work with Congress to delete provisions of H.R. 5726 that would:

—   Create new paperwork requirements that go beyond the periodic reports to investors which provide comparable information.

—   Require the Securities and Exchange Commission (SEC) to establish a schedule of examinations and conduct compliance surveys. These matters should be left to the SEC's discretion. In both cases, resources could be better used in inspecting risky cases and prosecuting violations.

—   Prohibit advisers from disclosing certain client information, which could impede the SEC's enforcement program.

—   Require the SEC to cooperate with State securities agencies or associations to achieve effective and uniform regulation and enforcement. The SEC already does this, and this provision would not resolve the current lack of uniformity among the States. The requirement that the SEC submit legislative recommendations to Congress would infringe unconstitutionally on the President's authority.

—   Require that fees be deposited as offsetting collections. Such a requirement would contravene established budget scorekeeping and accounting practices.

The Administration also will work with Congress to secure enactment of the provision of S. 2266 as passed by the Senate that would authorize the SEC to adopt a fidelity bonding rule. H.R. 5726 unnecessarily would require such a rule.