3 Min Read
WASHINGTON (Reuters) - Financial lobbyists on Tuesday applauded a bill in the U.S. House of Representatives that would require the Securities and Exchange Commission to review the costs of rules before putting them into force, which is part of a broader push from Republicans to reform regulation.
The legislation, introduced by Missouri Republican Ann Wagner, the newly minted chair of the financial services oversight subcommittee, is expected to go to the floor of the House on Thursday for a vote.
"The U.S. capital markets are the envy of the world and we believe it is critical to study any economic impact of a proposed rulemaking prior to its completion to protect investors, protect capital formation, and protect our markets," said the Securities Industry and Financial Markets Association, Wall Street's primary trade group, in a letter to House leadership.
The group added the bill would also require the SEC to periodically review its existing rules and analyze the effectiveness of its regulation.
Also on Thursday, a bill requiring the major derivatives regulator, the Commodity Futures Trading Commission, to review costs of its proposals is scheduled to come to the House floor.
Both bills come as Republicans work toward a broader overhaul of federal regulation.
Banks, asset managers and others in the financial sector have said that regulations can often lead to unintended expenses and that there should be a way to understand how regulations from a variety of areas fit together when it comes to compliance costs.
The bills are expected to pass the House, which has approved similar measures that outgoing President Barack Obama, a Democrat, opposed. Currently, there is no companion legislation in the Senate.
President-elect Donald Trump, a Republican, frequently said on the campaign trail that the costs of complying with federal regulation can hurt companies' bottom lines.
The SEC is already required to weigh the impact of its rules on efficiency, competition and capital formation. It beefed up efforts in recent years and issued new guidance on the subject after business groups including the Chamber of Commerce successfully beat back some rules in federal court.
Wagner’s bill would go beyond those requirements in its enhanced cost-benefit analysis and existing rule review. It would also require the SEC to clearly identify the nature of the problems new rules are intended to solve.
An SEC spokesman did not immediately respond to a request for comment on it.
Editing by Bernard Orr