[Congressional Record Volume 143, Number 31 (Wednesday, March 12, 1997)]
[Senate]
[Pages S2219-S2220]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            INVESTMENT ADVISERS SUPERVISION COORDINATION ACT

  Mr. McCONNELL. Mr. President, I ask unanimous consent that the 
Banking Committee be discharged from further consideration of S. 410 
and that the Senate proceed to its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       A bill (S. 410) to extend the effective date of the 
     Investment Advisers Supervision Coordination Act.

  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. GRAMM. Mr. President, the Chairman of the Securities and Exchange 
Commission, Arthur Levitt, has requested that the Securities and 
Exchange Commission be given additional time to prepare for the 
historic changes enacted by the last Congress to the Investment 
Advisers Act. Chairman Levitt requests an additional 90 days before 
those changes become effective.
  After careful review and discussion with my colleagues, and with the 
members of the affected industries, I believe that it would not only be 
proper but also desirable to give the SEC an additional 90 days to 
prepare appropriate regulations and take other steps necessary to 
implement last year's legislation.

[[Page S2220]]

  I support this extension, S. 410, of which I am a cosponsor, 
primarily out of a desire that the necessary rulemaking be done 
carefully and responsibly. In most respects, I believe that the draft 
regulations published by the SEC for comment faithfully implement the 
language of the National Securities Markets Improvement Act and the 
intent of the Congress. In several instances, in fact, I believe that 
the SEC has done a particularly fine job in anticipating and responding 
in detail to the various questions that would arise as we implement the 
division of regulatory responsibility mandated in last year's historic 
legislation.
  As we adopt this bill today, however, I feel compelled to express 
concern about one point in particular in which the draft SEC 
regulations are deficient. The good work of the Commission in other 
areas of implementing regulations makes this error so glaring. The 
draft regulations propose to define an investment adviser 
representative's ``place of business'' in a way that runs totally 
counter to the spirit of the legislation, the intent of the Congress, 
and the clear, plain reading of the language of the law.
  I am aware that there are those who oppose bringing rationality to 
the system of securities regulation, who wish to retain superfluous 
layers of regulatory oversight, and who are not bothered by subjecting 
securities professionals to redundant supervision by the Federal 
Government and by a multitude of State governments. However, the fact 
is that Congress acted last year to eliminate where possible multiple 
State supervision of securities market professionals, and the SEC rules 
should not contradict the statute.
  Under the plain provisions of the law as enacted last year, 
investment adviser representatives subject to SEC supervision may also 
be supervised to a limited degree by the Government of the State where 
the representatives has a ``place of business.'' When I think of place 
of business for an investment adviser representative, I certainly do 
not think of a restaurant, an automobile, an airport lobby, or a phone 
booth, and I would consider it bizarre to think of an adviser's client 
as a ``place of business.'' The implementing regulations must not 
indulge in the creation of this confusion, either.
  Mr. President, I urge my colleagues today to agree to this 
legislation to give the SEC an additional 90 days to implement the 
investment advisers title of the National Securities Markets 
Improvement Act, and I do so explicitly so that the SEC will use this 
time wisely to correct the deficiencies in the proposed regulations, 
such as the place-of-business definition, and thereby implement last 
year's act and the will of the Congress, not frustrate it.
  Mr. McCONNELL. Mr. President, I ask unanimous consent that the bill 
be deemed read a third time and passed, the motion to reconsider be 
laid upon the table, and that any statements relating to the bill 
appear at this point in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The bill (S. 410) was deemed read for a third time, and passed as 
follows:

                                 S. 410

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. EXTENSION OF EFFECTIVE DATE.

       Section 308(a) of the Investment Advisers Supervision 
     Coordination Act (110 Stat. 3440) is amended by striking 
     ``180'' and inserting ``270''.

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