AFR supports SEC rule proposals to strengthen protections for investors in private offerings, but urges the SEC to do more to reduce the risk of fraud and misleading practices.
“For too many years, dealers and advisors in the municipal market have felt free to give self-serving advice designed to generate more profits for them at the expense of their clients… Properly implemented, [today’s rule] should curtail the abuse and provide enormous benefits for taxpayers and investors.”
In the end, the Commission stood firm against industry resistance to a common-sense disclosure requirement. The SEC also correctly insisted that part-time and overseas workers be included in the calculation, consistent with the language and intent of the statute.
Overseas affiliates of U.S. banks played a major role in the final meltdown of 2008-2009, at a cost of millions of jobs and trillions of dollars. Financial institutions must not be allowed to escape oversight by “off-shoring” their riskiest deals.
AFR and its member organizations warn against a proposal that would “severely weaken” the independence measures called for by the Dodd-Frank financial reform law. “A Board dominated by employees of major banks and dealers with subsidiaries active in the municipal market will not be a truly independent Board.”
“Without real built-in investor-protection standards, we are seriously concerned that this rule will open the door to mass marketing of hedge funds and other risky and often illiquid ‘private’ securities in a market where abuses are common and SEC oversight is very limited. Fraud and abuse are not good for investors; they’re not good for capital markets, either.”
Three years after Dodd-Frank, the Securities and Exchange Commission has yet to write a rule implementing “one of the simpler parts of a mammoth and complicated law.” The Washington Post explores the reasons.
AFR joined more than a dozen organizations in sending a letter to members of Congress urging that they oppose HR 1062, the “SEC Regulatory Accountability Act”. This legislation would imperil the implementation of many important financial regulatory rules by adding numerous unnecessary procedural requirements to rulemakings by the Securities and Exchange Commission (SEC).
“Think of the precedent… rushing forward with the aspects of the rule supported by industry while offering the faint possibility that the commission might one day get around to addressing the concerns raised by investors.”
AFR joined more than twenty public interest groups in sending a letter to SEC Chairman Mary Jo White advocating for effective regulation of executive compensation.