Here’s what’s on deck today, June 17, in the financial reform Conference Committee.
With Title I, Title II, Corporate Governance and Investor Protection on the
agenda for Today, please call through conferees with key messages:
The House offer improves on the Senate systemic risk title in virtually all
respects, particularly on the fundamental principle of giving potential
threats to the economy “no place to hide” from regulatory oversight. We
urge the Senate to accept the House offer with one exception: to add the
Senate’s stronger Office of Financial Research provisions to ensure that
regulators are no longer in the dark about Wall Street’s activities.
AFR strongly supports the House offer on Title II. The House offer includes
the industry-paid pre-fund that ensures that Wall Street firms, not
taxpayers, pay the funeral expenses when a company fails.
While it reduces the strong House language on a secured creditor haircut to
a study, even a study paves the way to ensuring that counterparties can not
expect 100 cents on the dollar when a firm collapses.
In a surprise move, the Senate counter offer to the House imposes a five
percent ownership threshold for shareholder access to the proxy. (The House and Senate passed bills were virtually identical in reaffirming the
authority of the SEC to issue rules, leaving the details to the agency to
work out.) Proxy access is about giving long term shareholder the power to
hold directors accountable. The five percent threshold all but negates proxy
access because few if any of even the largest institutional investors have
that level of ownership in any one company. The House should reject the
Requiring brokers who give investment advice to act in n the best interests
of their customers is still under discussion. We do not need more study of
this issue without action. Making this change is the most important thing
Congress can do to directly protect average, Main Street investors.