[Congressional Record Volume 140, Number 140 (Friday, September 30, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: September 30, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                  NEED TO PASS SEC FUNDING LEGISLATION

  Mr. RIEGLE. Mr. President, today is September 30, the end of the 
Federal fiscal year. By this date, all Government agencies are supposed 
to be provided with the funds they need to operate for the next fiscal 
year, which starts at midnight tonight. We face a very serious 
situation, because the Securities and Exchange Commission has not yet 
been provided with funding sufficient to carry it through the new 
fiscal year.
  At the present time, Mr. President, the Congress has provided the 
agency with only a portion of the funding that it needs for the next 12 
months. Legislation that would provide the needed full funding was 
passed by the House of Representatives earlier this week. That bill, 
H.R. 5060, is at the Senate desk, Mr. President. It is crucial that the 
Senate immediately take up and pass this bill.
  If we do not provide the agency with full funding by midnight 
tonight, the SEC will have to start preparing to shut down. If Congress 
adjourns without providing the needed funds, the SEC will have to shut 
down. I understand that as of Monday, October 3, the agency will 
immediately freeze all hiring. The SEC will issue a stop work order, 
shutting down the electronic filing system that is used by all publicly 
traded companies to provide information to the investing public. Within 
30 days, the agency will have to start scaling back its operations. The 
agency will have to notify employees that they will be laid off. 
Registration statements for new issues of securities will not be 
reviewed. Investigations of securities fraud will not be completed. 
Fraud actions against will not be brought.
  Why is this important? Because the SEC is crucial to the smooth 
operation of our capital markets, and our capital markets are crucial 
to the smooth operation of our economy. The success of the U.S. 
financial markets is due, in large part, to the presence and vigilance 
of the SEC in policing and regulating the markets and their 
participants. Curtailment of the SEC's efforts could lead to a loss of 
investor confidence in the market. Corporate America depends on a 
strong market, buoyed by investor confidence, to maintain businesses' 
value and access to capital. Also, in recent years, growing numbers of 
individual investors have placed their life savings and retirement 
moneys in the nation's securities markets.
  If the SEC operates at a diminished level, its ability to police the 
markets or effectively respond to a market emergency, will be seriously 
impaired, placing the markets and the personal savings of millions of 
individual investors at risk. In turn, the Nation's economy as a whole 
could be severely harmed. We cannot run that risk.
  Mr. President, the Senate passed the language contained in H.R. 5060 
earlier this year, as part of an appropriations bill. It was not 
included in the House-Senate appropriations conference report at that 
time, but is now before the Senate again. This legislation enjoys the 
strong support of both of the SEC's regulated industries and the 
administration. It is crucial that the Senate take up and pass this 
legislation today, to protect the smooth operation of our markets, to 
ensure that investors are protected, and to guarantee the efficient 
operation of our Government.

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