[Congressional Record Volume 142, Number 137 (Saturday, September 28, 1996)]
[House]
[Pages H12047-H12051]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




CONFERENCE REPORT ON H.R. 3005, NATIONAL SECURITIES MARKETS IMPROVEMENT 
                              ACT OF 1996

  Mr. BLILEY. Mr. Speaker, I move to suspend the rules and agree to the 
conference report on the bill (H.R. 3005) to amend the Federal 
securities laws in order to promote efficiency and capital formation in 
the 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 Clerk read the title of the bill.
  (For conference report and statement see immediately preceding 
proceedings of the House.)
  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Virginia [Mr. Bliley] and the gentleman from Massachusetts [Mr. Markey] 
each will control 20 minutes.
  The Chair recognizes the gentleman from Virginia [Mr. Bliley].
  (Mr. BLILEY asked and was given permission to revise and extend his 
remarks.)
  Mr. BLILEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, it is with great pleasure that I rise in support of the 
National Securities Markets Improvement Act of 1996 today. This 
important legislation represents the most sweeping changes of the 
securities laws since their enactment. This legislation will eliminate 
unnecessary regulatory burdens and the costs that they impose on 
American businesses and investors. This legislation, at long last, 
makes sense of the regulatory responsibilities of the federal and state 
governments. It also is a bipartisan reduction of the fees paid by 
investors to the Treasury, which will reduce the size of our federal 
government. This landmark bill has been achieved through the 
cooperation of all of my colleagues of the House and Senate. Their 
ability to set aside their differences and reach sensible compromises 
is the reason we are here to mark this bipartisan legislative victory, 
and for that I thank each one of them.
  I am proud to say that this legislation represents an agreement that 
reduces SEC fees through bipartisan support. The SEC currently collects 
more than double the costs of running the agency. This is a tax on 
capital that all investors pay, and a problem that this legislation 
will solve by substantially reducing the registration fee over time 
that is assessed on securities offerings. Not only will we put $850 
million back into the pockets of American investors over the next 10 
years, but we have eliminated the tax entirely starting in the 11th 
year, saving investors over $800 million each year thereafter. This is 
a vital step toward reigning in government spending and requiring 
Congress to be more fiscally responsible while striving for maintaining 
a balanced budget.
  This legislation is the result of a long and difficult process, but 
it is well worth the effort. By reducing unnecessary regulation, the 
burdens and costs that businesses must overcome to access the capital 
markets will be significantly reduced. The most significant change this 
Act will effect is to create a national unified system of regulation. 
Securities offerings that are national in character, including 
securities offered by mutual funds and securities sold to sophisticated 
investors, will now be regulated only by the SEC.
  By streamlining the regulation of the mutual fund industry, funds 
will benefit from significant administrative savings, which they can 
pass on to their investors. This means that we are putting money back 
in the pockets of nearly one third of American families This is real 
savings that is long overdue and is a result of a more logical and 
efficient approach to regulating the securities markets.
  This legislation includes a creative new provision that will promote 
the capital formation process by increasing opportunities for private 
investment companies and venture capital firms. This new provision will 
enable these companies to include an unlimited number of qualified 
investors, rather than the 100 person limit they are subject to today. 
By increasing the domestic venues available to investors, we will help 
expand our investment capital. This will improve liquidity in this 
valuable market that many small business depend on for the capital they 
need to expand and create new jobs.

  Furthermore, the National Securities Markets Improvement Act will 
require the SEC to conduct meaningful cost-benefit analysis of proposed 
rulemakings that directly affects all securities issuers. Under this 
new provision, the SEC must weigh the cost of every rule they propose 
against the burden those rules would impose on the engine of our 
economy. This provision is simply common sense: meaningful regulation 
should not impose unnecessary burdens and costs.

[[Page H12048]]

  By passing this legislation today, we will be sending a bill to the 
President that facilitates the American dream without compromising the 
integrity of our markets. The cooperation and compromise that has led 
us to this consensus legislation speaks volumes for every participant 
in this process, and I urge you to support this legislation.
  I would like to thank my friend Fritz Hollings for his assistance in 
finding a solution of SEC funding, my colleagues in the House, Jack 
Fields, John Dingell, Ed Markey, Mike Oxley, Billy Tauzin, Dan 
Schaefer, Dan Frisa, Rick White, Nathan Deal, Rick Boucher, and Ron 
Klink who have all worked hard to achieve this victory.
  Mr. Speaker, this is the first major overhaul of securities law in 60 
years. It is a good bill, it is a bipartisan bill, and I want to 
commend, first of all, the chairman of the subcommittee, the gentleman 
from Texas [Mr. Fields]. This will be his last bill on the floor. He 
did yeoman work. And I want to commend the gentleman from Massachusetts 
[Mr. Markey] without whose help we would not be here right now. He and 
Mr. Fields worked together, we produced a bill that passed out of this 
House with 408 votes, it went to the other body, they passed theirs. We 
went to conference, and we did not get everything we wanted, as all of 
us know in the legislative process we do not do.
  But I must say this. The gentleman from Massachusetts, the gentleman 
from Michigan, have been true statesmen. We have worked together. This 
is good policy, it is good for the Nation, and while we did not get 
everything we wanted, we have pulled together, and I would hope that we 
would pass this bill overwhelmingly.
  Mr. Speaker, I reserve the balance of my time.
  Mr. MARKEY. Mr. Speaker, I yield myself as much time as I may 
consume.
  Mr. Speaker, I seek recognition at this time so that I can properly 
recognize the work of the gentleman from Texas [Mr. Fields]. This is 
Mr. Fields' last bill out here on the floor of Congress, and it is 
indeed a historic bill. Paired with the telecommunications bill which 
passed the Congress in February of this year, this historic securities 
bill represents the other historic landmark legislation which has 
passed the Congress and will be signed by the President during the 2-
year tenure of Mr. Fields as chairman of this committee.
  Mr. Speaker, I would like all of the Members to pay recognition to 
the gentleman from Texas [Mr. Fields] at this time for the tremendous 
work which he has done.

                              {time}  2015

  Mr. Speaker, Jack is more than a congressman and chairman to me; he 
is my good friend as well. That is why the gentleman from Michigan [Mr. 
Dingell] and I and all the Members on our side have had such a 
wonderfully productive working relationship with him.
  Mr. Speaker, there are a lot of good things in this bill, especially 
in the mutual funds area, where we are overhauling 50 year's worth of 
law, reforming it so it reflects now the new financial marketplace that 
has been constructed over the last 10 or 15 years in this country and 
around the globe.
  It includes an 800 number that individual investors can call in order 
to find out what the record is of the investment advisers that are 
seeking the business of individuals with their life savings.
  It includes much that is good, Mr. Speaker. That is largely a tribute 
to the gentleman from Texas [Mr. Fields]. I know that I join with all 
Members in standing here this evening in praise of his work, and in 
knowing that this final bipartisan effort is something that is in fact 
indicative of the way in which he conducted his subcommittee.
  Mr. Speaker, I want to praise, as well, the gentleman from Virginia 
[Mr. Bliley] and the gentleman from Ohio [Mr. Oxley]. They, along with 
the Members on our side, worked together patiently over the last year 
and a half toward the construction of this historic legislation, and I 
cannot tell the Members tonight how proud I am to be part of the team 
that brings it out here to the floor.
  Mr. Speaker, I reserve the balance of my time.
  Mr. FIELDS of Texas. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, very seldom do I actually come to the floor; very seldom 
have I, in the 16 years I have been in Congress. I have always enjoyed 
working in the committee and making whatever contributions that I can.
  I think it is somewhat ironic that tonight, the last night of my 
legislative career here in the House, I am fortunate to have before the 
body, with my colleagues, a piece of legislation that is truly 
historic, that is truly landmark. I certainly appreciate the indulgence 
of our colleagues as we pass this particular piece of legislation.
  Mr. Speaker, I have to say this has been a long process. I want to 
begin by thanking the staff. We usually tend to thank the staff at the 
very end, but I want to thank Linda Rich, David Cavicke, Brian 
McCullough, J.D., Charles, Steve Cope, Tim Forde, Jeff Duncan, Consuela 
Washington, Christy Strawman on my staff.
  Without all of these people, we would not have been able to put this 
massive reform together, because this reforms the 1934 Securities Act 
and the 1940 Investment Company Act, so this is truly landmark 
legislation.

  Mr. Speaker, I would be remiss if I did not begin by recognizing the 
work of the chairman, the gentleman from Virginia, Mr. Bliley, saving 
$850 million over a 10-year period in fees for the financial industry; 
the work of the gentleman from Ohio, Mike Oxley; the work of the 
gentleman from New York, Dan Frisa; the work of someone who I admire as 
much as anyone in the House of Representatives, the person that many of 
us consider to be our mentor, even though he is on the other side of 
the aisle, the gentleman from Michigan, John Dingell.
  I have really saved one person for last, Mr. Speaker. I am not, in my 
last speech, going to be outgracioused by the gentleman from 
Massachusetts [Mr. Markey]. But before I pay the accolades to the 
gentleman from Massachusetts, it is important that this House have 
perspective.
  Eddie and I really began to work on this product last year. We 
attempted to get some help from the other side of the Capitol. I have 
to point out to my colleagues that we did not have much engagement from 
the other side of the Capitol until this week, but it is important to 
recognize that the foundation for this bill, and I think that it is an 
example for the House, occurred several months ago, when the gentleman 
from Massachusetts, Ed Markey, and I met in my office to talk about our 
commonality, what was in a bill that had been introduced. We did not 
focus on our differences. If we did, we could have stopped the process 
right there.
  But instead, we talked about what was good for the consumer, the 
investing public, to make sure that the safeguards that have given us 
the strongest financial markets in the world with the highest 
integrity, that that would never be compromised. Everything that is in 
this piece of legislation started that night.
  From that night, we had improvements made at the subcommittee, made 
at the full committee, even here on the floor. We did go into a 
conference with the Senate. I think we are fortunate to be able to 
report that that conference concluded. But again, I want to point out, 
particularly to my colleagues on this side of the aisle, that if it had 
not been for my friend and my colleague looking for commonality and 
looking to do the right thing for the investing public, the gentleman 
from Massachusetts, we would not be standing here.
  I have to tell the Members, in all candor, the U.S. Senate was more 
of an obstacle than an asset in this particular process. It would have 
been very easy for my friends on this side of the aisle to say that an 
agreement that we had originally reached, a good agreement, that 
agreement was gone. But they did not walk away. None of us are 
completely happy with everything that is in this bill, or some things 
that are not here, but I know I have a commitment from my friend, and 
in talking to my friends on this side of the aisle, to continue to work 
next year for anything that we think needs to be added, any 
deficiencies that might be there.
  Having said that, Mr. Speaker, let me come back to the substance of 
this particular piece of legislation. We bring the financial markets of 
this country into the 21st century. We end regulation in its 
duplicative sense that is

[[Page H12049]]

needless and costs money wastefully, but we do not compromise investor 
protection.
  What the chairman said just a moment ago, the gentleman from Virginia 
[Mr. Bliley], this is a bipartisan consensus product. This is my final 
legislative act. This will be one of my last votes. We all hope that it 
is an oral vote. We plan for it to be an oral vote. But we are proud of 
what we have been able to do in working together. Mr. Speaker, I am 
very proud that this is my last legislative act that I bring to the 
floor.
  Mr. OXLEY. Mr. Speaker, will the gentleman yield?
  Mr. FIELDS of Texas. I yield to the gentleman from Ohio.
  (Mr. OXLEY asked and was given permission to revise and extend his 
remarks.)
  Mr. OXLEY. Mr. Speaker, I thank the chairman of the subcommittee for 
yielding to me. Let me also heap praise on him and the gentleman from 
Massachusetts [Mr. Markey]. Other than the fact that both gentlemen 
have funny accents, they have very little in common, except for their 
efforts to craft legislation that will last for a long, long time. In 
both the telecommunications legislation, the first major 
telecommunications legislation in 62 years, and now the Securities Act, 
both gentlemen have shown terrific leadership on both these very 
important issues.
  Indeed, your legacy, Jack, will be with these two major pieces of 
legislation. For that the gentleman from Texas [Mr. Fields] is to be 
congratulated by all of the Members.
  Mr. FRISA. Mr. Speaker, will the gentleman yield?
  Mr. FIELDS of Texas. I yield to the gentleman from New York.
  (Mr. FRISA asked and was given permission to revise and extend his 
remarks.)
  Mr. FRISA. Mr. Speaker, I would like to also, as a conferee on this 
legislation, express my thanks to the gentleman from Texas [Mr. Fields] 
and to the chairman, the gentleman from Virginia [Mr. Bliley], for 
giving me the opportunity to participate as a new Member of this House 
on such an important piece of legislation, as they both did on the 
telecommunications act reform.
  I support this legislation as well, and also extend my thanks to the 
gentleman from Massachusetts, Mr. Markey, and the gentleman from 
Michigan, Mr. Dingell, as well, I must say, to the chairman of the 
Committee on Banking on the other side, Mr. D'Amato, who is my Senator, 
and whom I represent, for his efforts on bringing this to final 
closure. I support this legislation.
  Mr. FIELDS of Texas. Mr. Speaker, I reserve the balance of my time.
  Mr. MARKEY. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Michigan [Mr. Dingell], the ranking Democrat on the 
Committee on Commerce.
  Mr. DINGELL. Mr. Speaker, I thank my friend, the gentleman from 
Massachusetts [Mr. Markey], for yielding time to me.
  Mr. Speaker, I want to commend the gentleman for the outstanding job 
he has done on this, and also our chairman, the gentleman from Virginia 
[Mr. Bliley], and the gentleman from Ohio [Mr. Oxley].
  I also want to express my particular affection and respect for the 
distinguished gentleman from Texas [Mr. Fields] who is up, I think, for 
the last time tonight. He is a superb Member of this body. He will be 
missed. He has earned the respect and affection of his colleagues by 
dint of his integrity, his honesty, and the way in which he has handled 
legislation. I will miss him, although I will rejoice that he will 
continue to be my friend.
  This is a good bill. It represents a huge amount of hard work, 
leadership, and effort. It is, as I mentioned, the last security bill 
for our good friend, the gentleman from Texas [Mr. Fields], and a 
fitting tribute to both him and to the gentleman from Massachusetts 
[Mr. Markey], and to our chairman, the gentleman from Virginia [Mr. 
Bliley], because of the way they have worked together to see to it that 
this bill could come to fruition.
  Mr. Speaker, the National Securities Improvements Act is an important 
piece of legislation. It enjoys, and properly so, bipartisan support, 
as well as the support of the industry. It is deregulatory in a proper 
fashion, while at the same time preserving and enhancing investor 
protections, something which is the real purpose of the American 
securities market and the American securities law.
  Mr. Speaker, I am, I will observe, deeply disappointed in the 
investment advisers provisions. No fault attaches to my colleagues on 
this side, but rather, the fault exists over in the other body. This 
body and the other body, because of the impasse on this matter, have 
passed up an opportunity to better police investment advisers, 
financial planners, and to give the SEC the resources and regulatory 
tools that are needed to put in jail or to put out of business a number 
of scoundrels, crooks, swindlers, and others who, very frankly, are 
advantaging themselves and enriching themselves at the expense of the 
little investor. To do that is a great shame.
  In that, there is one significant failure in this legislation. The 
bill before us on these matters essentially maintains the status quo. 
It does not contain the additional resources and investor protections 
sought by the House in this matter. Indeed, these provisions were 
passed by the House twice before. Nonetheless, no discredit attaches in 
this matter to any of my colleagues on the committee. They did their 
best in trying to protect and preserve these provisions, and they are 
important, as I reiterate, to the little investors in this country, who 
are being taken advantage of by a number of unprincipled, 
irresponsible, and incompetent people who function in this industry to 
their own great benefit and enrichment.
  In any event, I urge the passing of this bill. I salute the gentleman 
from Texas [Mr. Fields]. I salute my colleagues who have worked on it. 
I do want to salute the staff, which has worked very hard to bring us 
to where we are today.
  Mr. MARKEY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would ask if I could engage in a colloquy with the 
gentleman from Texas.
  Mr. Speaker, I would ask the chairman, is it the manager's intention 
not to limit, alter, expand, or otherwise affect in any way any State, 
statutory, or common law with respect to fraud or deceit, including 
broker-dealer sales practices, in connection with securities or 
securities transactions?
  Mr. FIELDS of Texas. Mr. Speaker, will the gentleman yield?
  Mr. MARKEY. I yield to the gentleman from Texas.
  Mr. FIELDS of Texas. Mr. Speaker, the gentleman is corrected in his 
understanding.
  Mr. MARKEY. Mr. Speaker, I thank the chairman very much for that 
statement.
  Mr. Speaker, we have come a long way in the last year and a half on 
this legislation. I think many observers would have thought it was 
impossible that we could have had such a historic overhaul of 
securities laws.
  At the beginning we were on different planets in terms of how we 
viewed these issues. But back in March, the gentleman from Texas, Jack 
Fields, and I, we went to his office for 2 hours, sat down and went 
through each and every issue trying to find the common ground in each 
and every one of them. The agreement in principle that we reached that 
night is the core of this legislation.
  It is altogether fitting that it be the last bill before the 
continuing resolution that we in fact take up here, because when the 
history of this Congress is written, there is no question that this 
securities overhaul and the telecommunications overhaul will be at the 
top of the list in terms of constructive, productive use of this 
Congress. It is a tribute to Jack and his understanding of the need to 
develop bipartisanship in the development of legislation which will 
leave that legacy for him to look back at.

                              {time}  2030

  We deal here with national securities offerings in a way that will 
preempt duplicative State review of mutual funds and stocks and bonds. 
We overhaul the margin provisions of this country.
  The mutual fund company reforms that are included in this bill are 
the greatest since 1940 that have come through this Congress. We have 
gone

[[Page H12050]]

through months of discussion to reach this point. But it is, as 
technical as it may be, as significant a piece of legislation as we 
will have passed during this 2 years that the 104th Congress was 
convened.
  Let me join as well in praising Linda Dallas Rich and David Cavicke; 
Steve Cope, who sits over there, J.D.; and on our side Consuela 
Washington; and Jeff Duncan; and David Moulton; and especially, because 
of his incredible efforts on this project over the last year and a 
half, consuming enormous amounts of time, with his wife pregnant, or 
just having had a baby, depending upon the circumstance a year and a 
half ago or right now, Tim Ford.
  We all know, most of the Members here, how humble we have to be at 
moments like this with a continuing resolution and so much important 
legislation coming through here, that without the work of the staff, it 
would not be possible.
  So let me finish again. Without question, the gentleman from New 
York, Dan Frisa; and the gentleman from Virginia, Rick Boucher; so many 
other Members, I see the gentleman from Michigan, Bart Stupak, here; 
all participated in this bill.
  Again, for me, it is a moment where I say good-bye legislatively to 
my good friend, the gentleman from Texas, Jack Fields. And I say good-
bye because, in a sea of acrimony, there was an air of good feeling 
that he was able to develop that produced historic legislation in two 
areas that could have been intractable in the wrong hands.
  For that, I salute you, Jack.
  The statement of managers on this conference report notes that ``The 
Managers agreed to include certain Amendments to the Investment 
Advisers Act of 1940 to eliminate publication, promote efficiency and 
protect investors.'' I would like to take just a few moments to 
describe what these amendments do and the congressional intent 
underlying them.
  First, the bill provides a $20 million authorization for the 
enforcement of the Investment Advisers Act of 1940, which regulates 
investment advisers and financial planners. These funds are intended to 
be used to beef up the SEC's inspections, examinations, supervision, 
and enforcement of the Advisers Act. For too many years, the SEC has 
not devoted adequate resources to this area, and this authorization is 
intended to reverse that situation. I am committed to assuring that 
funds are appropriated for this area, and intend to work closely with 
the SEC and the administration to assure this is the case.
  Second, the conference report provides for the establishment of a 
toll-free 800 number that investors can call to check on the 
disciplinary history of an investment adviser. This provision gives 
investors the tools they need to protect themselves against dishonest, 
unscrupulous, or shady individuals by letting them call a number to 
check and see whether the person they are considering turning over 
their life savings to has any history of previous disciplinary problems 
relating to fraud, sales practice abuse, or other misconduct. I expect 
the SEC to move quickly to assure that this 800 number is established, 
and that it provides investors with all the information they need to 
make informed decisions in this area. In this regard, I would expect 
the Hotline to include the same types of information available--or 
which is now slated to be made available--to investors over the 
existing NASD hotline for broker dealers. In addition, I expect that 
the new Hotline will also be supplemented by on-line services that will 
allow investors to access this type of information over the Internet--
similar to what is now being planned for the current NASD broker-dealer 
Hotline.
  With respect to Federal-State jurisdiction, the conference compromise 
assigns primary responsibility to the SEC for supervision of large 
investment advisers while reserving for the states primary supervisory 
responsibility for small advisers. At the same time, we agreed that the 
States should continue to have authority to license the individual 
representatives of investment advisers.
  Finally, the bill provides for uniformity in State requirements in 
books and records, capitol, and bonding requirements.
  This is an equitable compromise in this important area. However, it 
leaves unaddressed other issues that I continue to consider important 
to assuring investors are fully protected against wrongdoing by their 
investment advisers, such as enhanced disclosure of fees and conflicts-
of-interest. I intend to continue to press for these reforms in the 
next Congress.
  Mr. Speaker, I yield back the balance of my time.
  Mr. FIELDS of Texas. Mr. Speaker, I yield myself such time as I may 
consume, but let me inform the body that I will be very brief so that 
we can move on. I know everyone wants to get to the continuing 
resolution.
  Mr. Speaker, I want to amplify something that my good friend, the 
gentleman from Massachusetts, Ed Markey, said just a moment ago. We are 
taking a few minutes to talk in very general terms about a very complex 
piece of legislation, that is just as massive in reform as our reform 
was of telecommunications, and we are certainly not doing justice in 
this short time period to what we have done, and I want to acknowledge 
that.
  But, again, I want to emphasize to this House that while this is my 
last speech, this is my last legislative act, the real magic here, 
which I hope is demonstrable to the rest of the House, is the fact that 
people who come from very different backgrounds, from different sides 
of the aisle, different political persuasions, put aside differences 
which we could have focused on and instead looked at what was best for 
the American consuming public, and we focused there, and we found 
commonality and looked for the best policy.
  Again, this is not a singular effort. For 4 years, I have had the 
opportunity to work with the gentleman from Massachusetts, Ed Markey, 
in the last Congress as the senior Republican on the Subcommittee on 
Telecommunication and Finance, and this year being fortunate to be its 
chairman. I am going to say that I am a blessed Member that I had this 
particular individual to work with for 4 years.
  I also do not want to take away from the Members on my side. I know 
there are a lot of people who feel they sit on the best subcommittee or 
on the best committee, and certainly I do, in that particular regard. 
Our Members are engaged, both sides of the aisle, they are very 
intelligent, they are very focused, and I always feel that they are 
motivated for the right reason.
  So it is a great moment of pride that, as I close out my legislative 
career, I am standing here tonight with a product that we all can be 
proud of as a Congress as we go home, and it is something that we 
should all talk about, but we should talk about this as a joint product 
that occurred from both sides of the aisle.
  Mr. MARKEY. Mr. Speaker, will the gentleman yeild?
  Mr. FIELDS of Texas. I yield to the gentleman from Massachusetts.
  Mr. MARKEY. Again, I thank the gentleman.
  In conclusion, I also thank the gentleman from Virginia, Tom Bliley, 
following the tradition of the gentleman from Michigan, John Dingell, 
in creating the climate at our committee historically that has made it 
possible. And Alan Roth and J.D. on this bill helped to create the 
environment where the Members worked together to produce this bill.
  Mr. FIELDS of Texas. Mr. Speaker, the gentleman makes an excellent 
point. We would not be here if it had not been for the gentleman from 
Michigan, John Dingell, and Chairman Bliley bringing all this to 
closure.
  With that, Mr. Speaker, I think it is appropriate that we now pass 
the torch to the gentleman from Ohio [Mr. Oxley] and the gentleman from 
Massachusetts [Mr. Markey] to continue the legacy of this particular 
subcommittee, the legacy that we have enjoyed over many sessions.
  Mrs. COLLINS of Illinois. Mr. Speaker, I rise in support of H.R. 
3005, the Securities Amendment of 1996. During three hearings held on 
securities amendments, the Commerce Committee of which I am a member, 
heard support for sensible, targeted efforts to reform Federal 
securities laws to promote greater efficiency and capital formation in 
U.S. financial markets. We also heard from a number of witnesses, 
including Securities and Exchange Commission Chairman Arthur Levitt, 
who urged us to proceed carefully and cautiously, keeping in mind the 
fact that investor confidence and consumer protection must not in any 
way be compromised in this undertaking. I agree fully. I was extremely 
pleased that a bipartisan agreement was reached that heeded Chairman 
Levitt's sage advice.
  As we all know, U.S. capital markets are the strongest financial 
markets in the world. Today, nearly one-third of all families in the 
Nation have a portion of their savings invested in stocks, bonds, and 
mutual funds in order to ensure a better future for themselves and 
their loved ones. These investors have trust in their investments 
because our regulatory system has proven beneficial in protecting 
individuals from fraud and abuse perpetuated by unscrupulous brokers 
and dealers. We will be preserving and strengthening this trust with 
the legislation we consider before us today.

[[Page H12051]]

  This legislation will maintain the authority of State securities 
regulators to police wrongdoing. In addition, the legislation ensures 
that the SEC mandate to protect American investors and the public 
interest as well as the long-term stability of our major markets 
remains intact. This is a most important point. While there is room to 
fine tune the regulatory functions of the SEC, reforms must never be 
structured in such a way that they undermine consumer confidence.
  This bill, H.R. 3005, does not seek to greatly limit inspections of 
brokerage firms who have violated SEC rules or relieve firms of 
liability for recommending unsuitably risky investments to 
institutional clients. The bill also modifies previous language that 
would have eliminated the requirement in current law that investors be 
sent a prospectus and informed of the risks they face before they buy 
newly offered securities by requiring the SEC to move forward with its 
study of this issue.
  Mr. Speaker, there is undoubtedly a need to monitor mutual fund 
regulation to fully account for the constantly evolving size, 
complexity, and investment opportunities of our Nation's financial 
markets. While mutual funds have grown by more than 20 percent annually 
throughout the 1980's and into the 1990's, Congress has not addressed 
the issue of fund regulation since 1970. This bill updates our 
securities laws and will support and improve the industry. I urge my 
colleagues to approve the conference report on H.R. 3005. I yield back 
the balance of my time.
  Mr. FIELDS of Texas. Mr. Speaker, I yield back the balance of my 
time.
  The SPEAKER pro tempore (Mr. Dreier). The question is on the motion 
offered by the gentleman from Texas [Mr. Fields] that the House suspend 
the rules and agree to the conference report on the bill, H.R. 3005.
  The question was taken; and (two-thirds having voted in favor 
thereof) the rules were suspended and the conference report was agreed 
to.
  A motion to reconsider was laid on the table.

                          ____________________