[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

[[Page 1813]]

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.