Buybacks Benefit Shareholders and Promote Long-Term Investment

WASHINGTON – The American Securities Association (ASA) today sent a letter to the Securities and Exchange Commission (SEC) expressing concerns over the Commission’s proposal regarding share buybacks conducted by public companies.

“The SEC’s share buyback proposal would directly harm the interests of America’s mom-and-pop investors and retirement savers, while incentivizing short-termism in the equity markets,” ASA CEO Chris Iacovella wrote in the letter. “Buybacks have been attacked as diverting capital away from other purposes deemed more ‘worthy’ by those who favor a central planning approach to capital allocation in our economy. This approach subordinates and undermines the interests of America’s shareholders, pensioners, and others who rely on public companies to produce long-term sustainable returns over time,” Iacovella wrote.

In the letter, ASA urged the SEC to consider the cumulative impact of recent rule proposals and provide the public with sufficient opportunity to comment. ASA also outlined how the proposal would harm investors, the markets and the economy.

“As James Madison wrote in Federalist 47, ‘[t]here can be no liberty where the legislative and executive powers are united in the same person.’ If the SEC continues to act outside the scope of its legal authority, then those impacted by its overreach will have no choice but to turn to the courts to restrain the agency’s ambitions and political forays,” Iacovella concluded.

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ASA’s regional financial services companies work in communities across the country to create jobs, grow the economy, and increase prosperity for all Americans. The ASA exclusively represents the capital market and private client interests of its members and seeks to promote free market principles making it easier to access financial advice and capital. ASA members help Americans save for retirement, provide Main Street businesses with capital to grow, and advise hardworking Americans how to create and preserve wealth. For the latest updates follow @AmerSecurities and learn more at http://americansecurities.org/.