ASA to Congress: Hold Chairman Gensler Accountable

Sends letter in advance of Financial Services Committee oversight hearing 

WASHINGTON, D.C. — Today, the American Securities Association (ASA) sent a letter to the House Financial Services Committee in advance of an oversight hearing featuring U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler’s testimony.

SEC Regulatory Agenda: For over forty rulemakings, the SEC underestimated the legal and compliance costs associated with its aggressive rulemaking agenda and recently adjusted the hourly compliance rate, an issue ASA CEO Christopher Iacovella brought to light in an op-ed published in the Washington Times.

“The sky-high cost of the SEC’s regulatory agenda is wrong even by its own estimates,” ASA CEO Chris Iacovella said. “Given the SEC’s failure to use accurate cost information in its rule proposals, the need to restore trust in our institutions, and the importance of providing the public with transparent and accurate information, this Committee should demand the Chair reopen the comment period and recalculate the cost-benefit analysis for every rule proposal that used incorrect cost estimates.”

Consolidated Audit Trail (CAT): “The SEC’s collection of the personal and financial information of America’s retail investors by a database in Washington, D.C., violates the investors’ Fourth Amendment privacy rights because it forces the disclosure of their financial information, personal information, and transaction history without any evidence of wrongdoing. This committee must protect America’s retail investors and retirement savers by stopping this ill-conceived rule from taking effect,” Iacovella said.

Regulation Best Interest (Reg BI): “Any effort by the SEC to undermine Reg BI would only confuse investors, increase costs, and reduce access to financial advice for Americans. We ask this committee to prevent the SEC from engaging in a costly and confusing ideological crusade to change a rule that works,” Iacovella said.

Off-Channel Communications: “The SEC is misinterpreting the Investment Advisers Act with its recent 'sweep' of investment advisers regarding text and other off-channel communications. This represents a significant creep into the privacy of individuals employed by investment advisers and seems completely unjustified in the wake of COVID-era work practices where work-from-home and remote operations were necessary for markets to function properly,” Iacovella said.

ASA has consistently called on Congress to hold the SEC accountable to the American people and the letter highlighted other key concerns including, Congress preventing Markets in Financial Instruments Directive (MiFID II) research rules from being imported into the U.S., amending Rule 15c 2-11 which imposes equity disclosure rules on fixed income securities, how the Special Purpose Acquisition Companies (SPAC) rules can be changed without shutting down the entire market and supporting the committee’s efforts to promote capital formation.

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