[Congressional Record Volume 142, Number 97 (Thursday, June 27, 1996)]
[Senate]
[Pages S7212-S7216]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SECURITIES INVESTMENT PROMOTION ACT OF 1996
Mr. McCAIN. Madam President, I ask unanimous consent that the Senate
proceed to the immediate consideration of H.R. 3005, just received from
the House.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
A bill (H.R. 3005) to amend the Federal securities laws in
order to promote efficiency and capital formation in
financial markets, and to amend the Investment Company Act of
1940 to promote more efficient management of mutual funds,
protect investors, and provide more effective and less
burdensome regulation.
The PRESIDING OFFICER. Is there objection to the immediate
consideration of the bill?
There being no objection, the Senate proceeded to consider the bill.
Mr. D'AMATO. Madam President, in the spirit of how quickly we have
been able to proceed to the floor consideration of S. 1815, the
Securities Investment Promotion Act of 1996, I will keep my remarks
brief and to the point.
S. 1815 is a balanced, bipartisan bill that will benefit the market
and the investors in the market--American consumers. S. 1815 will make
it easier to raise capital in the securities market. It will simplify
and streamline many areas of the securities laws that haven't been
updated in years. S. 1815 will tighten up regulation by giving the
States and the Securities and Exchange Commission distinctly separate
regulatory roles.
I thank my colleagues for their hard work and diligence on working to
move this bill expeditiously through the Senate. I especially thank the
chairman and ranking member of the Securities Subcommittee, Senators
Gramm and Dodd as well as Senators Bryan and Moseley-Braun. This bill
is truly a bipartisan effort. They have shown outstanding leadership
and dedication to this process. Senators Gramm and Dodd, along with
Senator Sarbanes, also have been indispensable to improving the bill
during consideration by the Banking Committee.
The year 1815 is memorable for the battle at Waterloo--but the bill
S. 1815 will be memorable as the watershed in improving our capital
markets. The U.S. securities market is the pre-eminent market in the
world. It has the most capital and the most investors.
Over 160 million Americans own stocks. Last year, the U.S. stock
market had $7.98 trillion in capital--close to half the amount of
capital in the entire world market.
The legislation will make it easier to raise capital in the
securities market. The bill will create a new category of unregistered
private investment companies that will help venture capitalists fulfill
their critical role of providing capital markets to fund new, start-up
companies. S. 1815 will make it easier for companies that invest in
small business to raise money--encouraging more capital flow to small
business.
S. 1815 recognizes that mutual funds have become a household
commodity in the last several years, turning the mutual fund market
into a national market. In fact, almost one-third of U.S. households,
about 30 million households, own more than $3 trillion in mutual funds.
Everyone seems to agree that it no longer makes sense for all 50 States
to have a say in what goes into a mutual fund prospectus.
S. 1815 will eliminate the States' role in reviewing mutual fund
prospectuses, but the States will continue to play a critical role in
policing fraud and illegal conduct. S. 1815 will also make sure
investors and consumers are not confused about what's in a mutual fund
by giving the SEC authority to set standards on mutual fund names.
The legislation dusts the cobwebs off laws that now have only antique
value. S. 1815 will make the securities laws reflect the reality of
today's marketplace. It will simplify procedures for paying fees and
making disclosures. It
[[Page S7213]]
will give the SEC flexibility to adapt to the changing financial market
by letting the SEC say the securities laws don't apply where they don't
make sense.
S. 1815 will tighten up regulation by giving the States and the SEC
distinctly separate regulatory roles. It will divide between the SEC
and the States regulation of the 22,500 registered investment advisers
who are entrusted with over $10 trillion in customer funds, much of
which represents savings and retirement money. As a result, investment
advisers will be better regulated and consumers and investors better
protected.
The Securities Investment Promotion Act of 1996 is a significant
piece of legislation that will ensure that the U.S. securities market
remains the pre-eminent securities market in the world. It is not a
controversial bill, it enjoys support on both sides of the aisle.
I commend my colleagues and their staff for their excellent work in
drafting this legislation, particularly the Banking Committee staff and
Securities and Exchange Commission Chairman Levitt and his staff.
The Securities Investment Promotion Act of 1996 is a significant
piece of legislation that should be enacted this Congress.
Madam President, once again, I thank my colleagues for their
continued bipartisan support and cooperation.
Mr. SARBANES. Madam President, I am glad that the Senate today will
complete action on S. 1815, the Securities Investment Promotion Act of
1996. This is a reasonable bill, and appropriately so, for the Federal
and State laws governing our securities markets and the participants in
those markets are not in need of wholesale changes. All the evidence
suggest that the U.S. securities markets are functioning well.
Companies continue to raise capital in the U.S. markets in record
amounts. In addition to established businesses, new companies have been
raising capital in record amounts. Individual investor confidence in
the securities markets, measured by direct investment in securities and
investment through mutual funds and pension plans, remains high. The
U.S. securities markets retain their preeminent position in the world.
Still, where improvements to the securities laws are in order they
should be made. This bill has two major themes: First, improvement of
mutual fund regulation, and second, reallocation of responsibility
between Federal and State securities regulators. It is appropriate to
review the regulation of mutual funds, given the tremendous growth in
this segment of the financial services industry. Mutual fund assets now
equal insured bank deposits in size. The legislation contains a number
of provisions supported by the SEC that are intended to allow mutual
funds to operate more flexibly.
With respect to the role of the States in securities regulation, let
me say that the current system of dual regulation does not appear to
place an undue burden on our securities markets. Not only are our
markets a vibrant source of capital for established businesses and new
businesses alike, foreign businesses also consider our markets
attractive places to raise capital. State securities regulators play a
crucial role in policing our markets. Still, dual regulation need not
mean duplicative regulation. The State regulators themselves have
convened a task force to recommend how securities regulation can be
made more efficient and effective by dividing authority between the
Federal and State level. I hope we will have the benefit of their
thoughtful work before we complete action on this legislation.
I am pleased that the managers amendment offered by Senator D'Amato
at committee markup made some important improvements to the bill. In
the mutual fund area, the managers amendment added two provisions that
were recommended by the Securities and Exchange Commission. These allow
the SEC to require mutual funds to provide shareholders with more
current information, and to maintain additional records that will be
available to the SEC. Given the importance that mutual funds now have
as an investment vehicle for millions of American households, it is
crucial that information be available for mutual fund shareholders, and
these provisions address that need. The managers amendment also
clarified the SEC's authority with respect to preemption of State laws
regarding registration of securities. The SEC may preempt State laws
only with respect to securities traded on the New York Stock Exchange,
the American Stock Exchange, the NASDAQ, or other exchanges with
substantially similar listing standards. The provision in the bill as
introduced could have preempted State law for all exchange-traded
securities, regardless of size or reputability.
As modified by the managers amendment, the provisions in this bill
strike a reasonable balance. They received unanimous support from the
Senate Banking Committee. I would note that in some respects,
particularly in the area of preemption of State law, the House bill
goes further. We will have to craft a final product very carefully, so
that any bill Congress might send to the President does not go too far
in limiting the authority of the State regulators, thereby exposing
investors to sharp practices.
Mr. DODD. Madam President, I rise to join my colleagues in supporting
the passage of S. 1815, the Securities Investment Promotion Act of
1996. Let me first offer my congratulations to Senators Gramm, Bryan,
and Moseley-Braun, all of whom worked very hard with me in drafting
this balanced, thoughtful, and bipartisan bill. I particularly would
like to acknowledge the efforts of Senator D'Amato, the chairman of the
Banking Committee, who not only was deeply involved in drafting this
bill, but who also did his utmost to move the bill quickly and smoothly
through the legislative process so that we were able to come to the
floor today.
The U.S. capital markets are vitally important for the good economic
health not only of virtually every American company but for millions
and millions of individual investors who have placed some of their
assets either directly in securities or, as has become more and more
common, into mutual funds.
We must recognize that sustained economic growth is heavily dependent
upon the continuing ability of our capital markets and financial
services industry to function efficiently and with integrity. If
companies find impediments to obtaining capital, they will not grow. If
individuals find impediments to their access to securities and other
investments, they will not save.
Taking steps to enhance the access of both corporations and
individuals to the securities markets is prudent means by which
Congress can help sustain or even increase the Nation's rate of
economic growth.
Furthermore, the American capital markets are the envy of the world.
No other nation enjoys the international reputation of our capital
markets and it is necessary for Congress periodically to review and
modernize, where necessary, the laws that make our markets and our
financial services industry the world's leader.
The legislation under consideration today is the culmination of a
lengthy bipartisan effort to reform those aspects of the securities
laws that are an outdated impediment to the efficient functioning of
the securities industry.
The bill will also provide clearer statutory directives to both State
and Federal regulators so that the integrity of, and confidence in, our
capital markets and financial services industry is enhanced.
Without going into excruciating detail, let me just highlight the
main areas that this legislation covers: It improves the regulation of
investment advisors by clarifying the proper roles of the SEC and the
State regulators; it modernizes and streamlines the regulation of
mutual funds on the one hand, and provides badly needed modernization
of the statutes covering hedge funds and venture capital funds on the
other hand; it provides for clarification on a host of technical
matters ranging from treatment of church pension plans to the access by
U.S. journalists to foreign issuer press conferences. And,
significantly, the bill creates the mechanisms for increased regulatory
flexibility so that the SEC will have the ability to keep pace with
needed regulatory changes as the needs and demands both of investors
and the financial industry develop over time.
Madam President, the hearing held on this legislation on June 5 amply
[[Page S7214]]
demonstrated that the bill will have a salutary effect upon our
financial markets. Not only will the legislation remove anomalous and
antiquated regulations that impeded the efficient functioning of the
markets, but the legislation will clearly improve the ability of
investors, both institutions and individuals, to invest and save their
hard-earned dollars.
I believe that the legislation, through our qualified purchaser
provisions as well as the business-development company sections, will
not only provide an immediate benefit to the ability of small
businesses to access needed capital, but that these provisions will
also provide a future benefit in the event of another credit crunch
similar to the one we saw in 1992 and early 1993.
At the committee markup, we adopted a manager's amendment that will
make good improvements to the bill and I would like to take note of a
few particularly important provisions.
I am pleased that the Banking Committee included new authority for
the SEC to require that mutual funds make updated disclosures and that
they maintain certain kinds of books and records beyond the minimal
amount currently required by law.
I commend my colleague, the ranking member of the Banking Committee,
Senator Sarbanes, for advocating the inclusion of these provisions and
I am very glad that the committee wholeheartedly supported these
commonsense and nonburdensome investor protections.
I am also pleased that the Banking Committee will require the
commission to study the impact of recent judicial and regulatory
rulings that have limited the ability of shareholders to offer
proposals at shareholder meetings regarding a company's employment
practices. The ability of shareholders to offer such kinds of
resolutions such as the ``Sullivan principles'' for South Africa and
the ``MacBride principles'' for Northern Ireland have had a direct
impact on ensuring that United States corporations do not participate
in the loathsome discriminatory practices that occurred, or still
occur, in those nations. I look forward to the results of the
commission's study in a year's time.
In all, this is a carefully balanced bill that improves our Nation's
securities laws to allow the markets to function more efficiently, but
balances those reforms by maintaining, and in some cases enhancing, the
full strength of investor protections that have made our markets the
best in the world.
I urge my colleagues to support passage of this important
legislation.
Mr. BRYAN. Madam President, I am pleased to support S. 1815, the
Securities Investment Promotion Act of 1996. Let me begin by
recognizing those who worked diligently to reach bipartisan agreement
so that this bill could be considered on an expedited basis. Deserving
of particular credit here are Senators Gramm and D'Amato and their
staffs. I greatly appreciated the opportunity to work with them and
with Senators Dodd and Sarbanes on this important piece of legislation.
When I signed on as an original co-sponsor of S. 1815, I said that I
believe our capital formation process is fundamentally sound. America's
capital markets are the fairest, the most successful, and the most
liquid the world has ever known. By virtually every statistical
measure, the investment market is vibrant and healthy.
Today, tens of millions of Americans rely on this Nation's financial
markets to save for retirement, fund their children's college
education, and to receive a rate of return on savings that exceeds the
rate of inflation. Now more than ever, the people of America are
investing in America. Just one example tells the story: For the first
time in history, mutual fund assets exceed the deposits of the
commercial banking system. This massive movement into our securities
markets promises new and exciting opportunities for investors--and for
American businesses.
This Nation's securities laws and regulations are designed first and
foremost to protect investors and to maintain the integrity of the
marketplace, thereby promoting trust and confidence in our system of
capital formation. We should strive for a securities regulatory system
that is tough, but one that also is fair, efficient and up-to-date. On
balance, I believe that S. 1815 does a good job of eliminating or
modernizing laws and regulations that either are duplicative or
outdated--without sacrificing investor protection. In general, the
legislation strikes the proper balance between promoting efficiency and
growth while ensuring integrity and fairness.
One of the key objectives of this bill is to carefully reallocate key
aspects of Federal and State securities laws so that we eliminate any
duplication, thereby ensuring that our relatively modest regulatory
resources are properly focused. Today, both the Securities and Exchange
Commission [SEC] and the 50 State securities regulators share the
responsibility for overseeing our capital markets. By and large, this
system of shared regulatory responsibility has worked well, with the
SEC taking responsibility for marketwide issues, while the States focus
their attention on the issues most affecting individual investors and
small businesses.
I believe that there is room for improved coordination and a more
clearly defined allocation of responsibility between the States and the
SEC. I support the goal of eliminating duplicative and overlapping
regulations that do not provide any additional protections to investors
or to the markets but that do serve to increase the costs of raising
capital. For these reasons, I support those provisions of the bill that
will serve to draw brighter lines of responsibility between the States
and the SEC, and that will streamline the securities offering process
for American businesses.
When this legislation was introduced, I said that it was critically
important that this legislation preserve a strong State role in
policing sales practices and in bringing enforcement actions. At the
same time, I said that the bill must not undermine the ability of
defrauded investors to recover their losses in court under state laws.
I am gratified that the bill and the committee report that accompanies
it explicitly provide that State securities regulators continue to have
available to them the full arsenal of powers needed to investigate and
to enforce laws against fraud and to retain their ability to protect
the small investors of this country. Similarly, the bill and committee
report also make it absolutely clear that nothing in this legislation
alters or affects in any way any State statutory or common laws against
fraud or deceit, including private actions brought pursuant to such
laws.
S. 1815 recognizes the fundamentally national character of the mutual
fund industry by assigning exclusive responsibility for the routine
review of mutual fund offering documents and related materials to the
SEC and NASD. The legislation also encourages further innovation in the
mutual fund industry by means of advertising prospectuses and funds of
funds. I am pleased that my earlier concerns with the respect to
reporting and recordkeeping requirements were addressed in the
manager's amendment approved by the Banking Committee.
Finally, I want to say a word about title I, in which we seek to
rationalize the regulatory scheme for investment advisers. There is
abundant evidence that the current system of investment adviser
regulation is woefully inadequate, both in terms of the resources we
devote to the effort and the laws that govern the industry. While I
applaud the objectives of title I of S. 1815, it is my hope that
Congress does not end its consideration of this issue here.
I would agree that establishing the proper lines of regulatory
jurisdiction is a necessary first step. Today, both the SEC and the
State securities regulators oversee registered investment advisers.
But, there are no clearly established lines of jurisdiction. As a
result, both the States and the Federal Government essentially have
responsibility for the entire population of investment advisers.
However, neither the States nor the Commission have the resources to
shoulder the entire job. What we are left with is a system that is both
burdensome and ineffective. Although the regulators have tried to
coordinate their activities, this legislation clearly establishes the
concept of bright lines of responsibility so that the policing of the
industry is both more rational and more effective.
The oversight of investment advisers is an extremely important issue,
as
[[Page S7215]]
more and more Americans turn to these financial professionals to help
guide them through the increasing complexity of our financial markets.
Establishing a more rational system for determining jurisdiction is a
helpful step. But, it is only a first step. And, while I agree with the
objective of establishing clearer lines of responsibility, I am
troubled by the very legitimate concerns raised by State and Federal
regulators and consumer organizations with respect to the practical
application of title I.
The State of Nevada Securities Division has brought to my attention a
real life situation that illustrates potential problems with this bill
that I hope we can correct in conference. An investment advisor
representative who worked for a firm with over $25 million in assets
applied for a license in Nevada. The Securities Division discovered he
had 14 complaints and numerous disciplinary actions filed against him.
He did not get a license to operate in Nevada but, under the provisions
of this bill, he would not be required to get one. Nevada regulators
would be able to go after a bad actor after he has committed fraud but
they would prefer to retain the ability to keep them out in the first
place.
One potential fix for this problem would be to require investment
advisor representatives who have disciplinary histories to obtain State
licenses regardless of the size of the firm. This would protect States'
abilities to keep out unscrupulous operators before they have had a
chance to prey on unsuspecting consumers.
I understand that time may not permit us to address the many
questions that have arisen in the context of title I. Nor do we have
the time to comprehensively address all that needs to be done to
improve the regulatory system for investment advisers. As a result, I
would ask that we commit ourselves when we convene in the 105th
Congress to assuring not only that State and Federal regulators have
the necessary resources and are effectively implementing them.
preserving state revenue authority
Mr. GRAMM. Madam President, I would like to address a question to the
distinguished chairman of the Banking Committee, Mr. D'Amato. As the
chairman is aware, this legislation takes the very important step of
providing national rules for national securities markets. In doing so,
however, it has been our intent to preserve State authority to collect
revenues, either to fund their antifraud efforts or for other State
government purposes. In fact, the bill as reported contains explicit
language to allow States to continue to collect all fees and revenues
related to registration and regulation of securities that they have
been collecting, notwithstanding the provisions of the bill that reduce
the States' role in registration of nationally traded securities and
mutual funds. Does the chairman concur that this has been the intent of
the Members both in drafting and approving this legislation?
Mr. D'AMATO. I certainly do. The Senator is correct. That has been
the intent of this Senator, and I know it to have been the intent of my
colleague, the chairman of the securities Subcommittee, Mr. Gramm, as
well as that of all of the sponsors of the bill and of the members of
the Banking Committee. We expressly provided language in the bill to
preserve State authority to collect revenues so that there would be no
revenue loss at all faced by the States from the enactment of this
bill. I do understand that some States have expressed a concern that in
spite of the clear language of the bill, some of the provisions of
their own State laws may make it difficult in some cases to collect
fees. If that is indeed the case, and we have begun discussions to
identify the problems precisely, then I see no obstacle to making
adjustments in the legislation during our conference with the House of
Representatives to ensure that no State loses any revenue authority as
a result of enactment of this bill.
Mr. GRAMM. Madam President, I thank the Senator for his response, and
I join with him in expressing my willingness and desire to ensure that
the language of the final legislation, as it emerges from conference
with the House of Representatives, will preserve State revenue
authority. I am aware that securities-related fees are an important
source of revenue for the Texas State government, and I do not see it
as our place here to impair that authority. I further know of no one
who disagrees with this intent, so I also see no problem in fully
resolving this matter in the final version of the legislation.
Mr. HOLLINGS. Madam President, the securities bill before us, H.R.
3005, makes a number of very important changes in securities
regulation, such as regulation of investment advisors and mutual funds.
The Senate bill was approved by the Banking Committee on a bipartisan
16 to 0 vote.
I have no problem with the Senate version of this measure. I would
support it. However, I have a big problem with the House companion to
this bill. It contains provisions that would shift much of the cost of
running the Securities and Exchange Commission from firms registering
securities to the general taxpayer. I am concerned because of the
potential impact on the SEC and, frankly, that this will require the
Appropriations Committee to absorb $200 million at the very time that
discretionary funding is being cut.
In the present fiscal year, the SEC's budget totals $297.4 million.
Of this amount, $194 million is derived from section 6(b) securities
registration fees and $103.4 million is appropriated from the general
fund. So we have a situation in which about two-thirds of the SEC's
operation is financed through fees.
The House bill seeks to change this situation and shift the entire
cost of running the SEC to discretionary appropriations. This shift and
reduction in fees would occur over a 5-year period. In short, it cuts
collections and tells the Appropriations Committee and the general
taxpayers to absorb the costs.
Mr. DODD. Would my friend from South Carolina yield?
Mr. HOLLINGS. Of course. The Senator from Connecticut is our
authority on securities and financial market matters.
Mr. DODD. I thank my friend. The Senator from South Carolina is
essentially correct regarding this funding issue. I would note,
however, the current situation is that the SEC collects in total more
through fees than the agency's total budget. Of course, a majority of
these funds go to the Treasury as general revenues.
Mr. HOLLINGS. Exactly. These fees go to Treasury. They do not do
anything to support the SEC. The agency cannot use those receipts. The
only fees that the SEC is able to use--to pay personnel to provide for
stable markets and to prevent fraud--are those that are collected and
deposited in the SEC's appropriation account. It is those that are
above the statutory fee level of one-fiftieth of 1-percent. It is
exactly these fees that the House bill proposes to terminate.
You know for the past 2 years the SEC has had something of a near-
death experience because of problems with its authorization. It wasn't
until the last day of the 103d Congress that the other side removed
their holds on a bill that enabled the agency to continue functioning.
And, just last summer, over my objections, our fiscal year 1996
Commerce, Justice and State appropriations bill proposed cutting the
SEC by 20 percent below a freeze at fiscal year 1995 levels. Here we
have a law enforcement agency, and an agency in charge of stopping
insider trading and fraud, and the appropriations bill reduced its
funding far below the level it needed to continue operations.
Mr. D'AMATO. But, eventually through a floor amendment and conference
negotiations, the SEC's budget was brought back up at least to a freeze
at fiscal year 1995 levels.
Mr. HOLLINGS. That's right. The Senator from New York was
instrumental in helping us restore the SEC budget. It wasn't easy.
I think the distinguished chairman of the Banking Committee knows the
situation better than most. We served together on the Appropriations
Committee for 14 years.
I think he would be surprised how tight the funding situation has
gotten. For fiscal year 1997, the President's budget proposals for the
Justice Department alone are up $1.947 billion above the current year.
The Federal Judiciary is up $414 million. And, so on. Now, we on the
Commerce, Justice and State Subcommittee aren't going to get anywhere
near those increases in the section 602(b) allocation process.
[[Page S7216]]
We can't fund those programs, let alone State, Commerce, and Small
Business, and other independent agencies. Let alone increases for the
Securities and Exchange Commission.
So these are the reasons I have held up this bill. I applaud the
changes you have made in securities laws, but I must ask, do you intend
to maintain the Senate position on this fee issue? I mean will you and
the chairman not reduce section 6(b) fees that are collected and
retained by the SEC, as part of this legislation?
Mr. DODD. My friend makes many good points. I know the pressures that
the Appropriations Committee faces and we are all too familiar with the
Government shutdowns that occurred this year.
I would note that our goal on the Banking Committee is to pass a
securities reform bill that the President will sign. And, the
administration has expressed many of the same concerns that the Senator
from South Carolina has raised. In its June 18 Statement of
Administration Policy, the White House said it would support the
securities reforms but oppose the House proposed changes in financing
the SEC. The administration's letter states:
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. 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.
Senator D'Amato and I intend for this bill to become law, and I
assure the Senator from South Carolina that, absent an agreement among
all the appropriators, the administration, and the SEC, we will not
agree to the House language that lowers registration fees which are
used to run the SEC and offset appropriations. While I believe that
there is merit on both sides of this funding issue, I believe that the
important and difficult questions of how best to fund the SEC--at which
levels and through what means--should be reserved for another forum.
Mr. D'AMATO. I would say to the Senator from South Carolina that
there probably isn't another Member of the Senate who understands more
the importance of the financial markets to the economy, or the economy
of his State. This Senator understands the need to maintain fair and
open securities markets. The SEC needs to be funded adequately so it
can do its job and ensure its regulation of the market. That is simply
in everyone's interest.
The Senator from South Carolina's arguments make good sense. I know
he has been a good friend to the SEC and the securities industry. I
would have to agree that we should try to work towards a funding
position that we can agree on to fund the SEC in a fairer way so that
section 6(b) fees pay for the cost of regulation and not general
deficit reduction. I am concerned about the general taxpayer, of
course, but these fees should not be a tax on capital formation. Last
year, the SEC brought in more than $750 million to fund a budget of
less than $300 million. That isn't right either.
The bill the Senate is being asked to approve today is deficit
neutral. The important reforms proposed in this legislation should be
accomplished without adding one penny to the deficit. Similarly, any
final agreement reached with the other body regarding this legislation
must not contribute to the Federal budget deficit. At a time when there
is wide bipartisan agreement on the need to balance the budget, it is
critical that this legislation not make this goal more difficult to
achieve.
I will do everything I can to keep this conference focused on
securities regulation reforms and will continue to work with my
colleagues on a long-term solution to the SEC funding problem. Let me
note that unless there is bipartisan agreement among the appropriators,
the administration, and the SEC, we will separate that issue from the
bill and put it aside for another day. We do not intend to jettison all
the good things in this bill, and the bipartisan spirit in which it was
engendered, over this difficult issue. As a friend from Connecticut
notes, we are serious about this bill--we intended to get it enacted
into law.
Mr. McCAIN. Madam President, I ask unanimous consent that all after
the enacting clause be stricken and the text of calendar No. 468, S.
1815, be inserted in lieu thereof, the committee amendment be agreed
to, the bill be deemed read a third time and passed, as amended; the
motion to reconsider be laid upon the table, the Senate insist on its
amendment and request a conference with the House, the Chair be
authorized to appoint conferees on the part of the Senate and that
several statements and colloquies be printed at the appropriate place
in the Record.
THE PRESIDING OFFICER. Without objection, it is so ordered.
The committee amendment was agreed to.
The bill (H.R. 3005), as amended, was deemed read the third time and
passed, as follows:
(The text of the bill will be printed in a future edition of the
Record.)
Appointment of Conferees
Under the previous order, the Presiding Officer (Mrs. Hutchison)
appointed Mr. D'Amato, Mr. Gramm, Mr. Bennett, Mr. Sarbanes, and Mr.
Dodd conferees on the part of the Senate.
____________________