    [Public Papers of the Presidents of the United States: William J. Clinton (1996, Book II)]
    [October 11, 1996]
    [Pages 1812-1813]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Statement on Signing the National Securities Markets Improvement Act
    of 1996
    October 11, 1996

        Today I am pleased to sign into law H.R. 3005, the ``National
    Securities Markets Improvement Act of 1996.'' This legislation
    represents the most significant overhaul of the securities regulatory
    structure in decades. Without compromising investor protection, H.R.
    3005 will enhance capital formation and the competitiveness of the
    American economy by eliminating regulatory overlap between the States
    and the Federal Government, significantly rationalizing and simplifying
    the way mutual funds and corporate securities are regulated, reducing
    Securities and Exchange Commission (SEC) registration fees, and
    stabilizing the SEC funding structure over a 10-year period.
        This bill achieves the difficult task of improving the efficiency of
    the financial markets without compromising investor protections. Lower

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    registration fees will reduce the cost of capital formation in the
    United States. Changes to margin requirements should lower funding costs
    for broker-dealers, benefiting investors without reducing the systemic
    protections of the margin requirements. This legislation will more
    efficiently divide responsibility for regulation between the Federal and
    State governments. The SEC will be charged with responsibility for
    activities in the national markets, such as regulation of securities
    listed on the national exchanges and mutual funds, as well as large
    investment advisors. States will have responsibility for smaller issues
    and investment advisors with smaller portfolios, while retaining their
    authority to take enforcement actions against fraudulent conduct in all
    situations.
        The legislation gives the SEC new broad general exemptive authority
    under both the Securities Act and the Exchange Act, which should allow
    the Commission to deal more quickly and effectively with the facts and
    circumstances of individual situations. At the same time, it strengthens
    the SEC's hand in addressing fund names that use words such as
    ``government,'' ``guaranteed,'' or ``insured,'' which can cause
    investors to conclude, incorrectly, that their investments are
    guaranteed by State or Federal authorities.
        This legislation will save hundreds of millions of dollars for
    American businesses. Corporations will benefit from the reduction in SEC
    fees. Mutual funds, which are sold nationally, will be regulated
    nationally. Broker-dealers will benefit from no longer being subject to
    dozens of differing State net capital and books and records
    requirements. The SEC's funding will be more stable and predictable than
    it has been in recent years. These changes will all enhance our national
    capital markets, helping to create and nurture new businesses and new
    jobs, and enhancing the returns of both businesses and investors.
        I am pleased to sign this bill into law. I thank all the
    participants--from the Congress, from Federal and State regulatory
    agencies, from the affected industries--for the hard work that
    culminated in enactment of this important piece of legislation.

                                                          William J. Clinton

    The White House,

    October 11, 1996.

    Note: H.R. 3005, approved October 11, was assigned Public Law No. 104-
    290.