SEC Open Meeting on Registration of SBS Dealers and MSPs , Rule 194, and CEO Pay Ratio
Securities and Exchange Commission
Open Meeting
Wednesday, August 5, 2015
Key Topics & Takeaways
- Approval of Executive Pay-Ratio Proposal: The Commission voted 3-2 to approve the pay ratio rule, with Commissioners Gallagher and Piwowar dissenting.
- Approval of Final Rule for Registration of SBS Dealers and Participants: The Commission voted 5-0 to approve the final rule for registration of Security-Based Swap dealers and major swap participants.
- Approval of Proposed Rule of Practice 194: The Commission voted 3-2 to approve the proposed rule of practice concerning statutory disqualifications, with Commissioners Stein and Piwowar dissenting.
Commissioners & Staff
- Mary Jo White, Chair, SEC
- Luis A. Aguilar, Commissioner, SEC
- Daniel M. Gallagher, Commissioner, SEC
- Kara M. Stein, Commissioner, SEC
- Michael S. Piwowar, Commissioner, SEC
- Gary Goldsholle, Deputy Director, Division of Trading and Markets, SEC
- Mark Flannery, Chief Economist and Director, Division of Economic and Risk Analysis, SEC
- Bonnie Gauch, Division of Trading and Markets, SEC
- Johnathan Shapiro, Division of Trading and Markets, SEC
- Keith Higgins, Director, Division of Corporation Finance, SEC
Registration of SBS Dealers and MSPs and Proposed Rule of Practice 194
Securities and Exchange Commission (SEC) Chair Mary Jo White, in her opening remarks, noted that Title VII of the Dodd-Frank Act empowered the SEC with oversight over the $11 trillion outstanding securities-based swaps (SBS) market and that today the Commission would finalize the registration framework for SBS dealers and major swap participants (MSPs).
Dealers, she noted, are relied upon to provide liquidity and access to central clearing, and are trusted to remain financially viable throughout the life of the derivatives contract and that the registration of swap dealers with the SEC is a “fundamental tool” to regulate and supervise their operations. White outlined requirements to submit and update information relating to business activities, structure, background and controlled affiliates, the information which would become the core for the SEC’s ongoing oversight initiatives.
White added that the regulation would also require dealers and MSPs to “undertake due diligence” to put in place a compliance framework with federal securities law and a prohibition of persons and entities with statutory disqualifications from engaging in swaps transactions that would be illustrated through a dual certification process.
In the proposed Rule of Practice 194, she said, the Commission seeks to strike a “careful” and “reasonable” balance between allowing associations with statutorily disqualified persons or entities so long as they are disclosed, and an overarching rule that establishes a “transparent, efficient” and “comprehensive” system for continued association with unqualified persons.
White expressed interest in comments relating to the temporary relief provision and associated timetables, and whether appropriate consideration is given in the proposal to the Commodity Futures Trading Commission (CFTC) and other regulators.
Staff Presentations
Gary Goldsholle, Deputy Director of the Division of Trading and Markets, outlined the content included in the release to include two separate but related rules, the first relating to registration and the second to continued dealer association with persons and entities facing statutory disqualification by the agency.
The registration rule, he said, offers a “comprehensive and efficient” registration process based upon conditional registration that will allow the SEC to grant ongoing registration or begin proceedings to deny registration.
Goldsholle added that the proposed Rule of Practice 194 would allow a swap entity to apply to the Commission to find that an associated person subject to a statutory disqualification may continue affecting swaps in the dealer’s favor. He characterized the combined rules as “robust” and “appropriately tailored” for the SBS market.
Mark Flannery, Director and Chief Economist, Division of Economic and Risk Analysis, outlined the potential benefits associated with both the final and proposed rules, including increased information disclosure which could reduce asymmetric information about counterparty quality and increase competition based on “quality of execution.” The costs, he outlined, could include the potential withdrawal of entities from the market which could increase market costs when captured by existing market players unless new market entrants captured market share.
Proposed Rule of Practice 194, he added, includes a provision which eliminates costs of duplicative review if the section of the rule which allows for mutual recognition of exemptions from other regulatory agencies is retained.
Bonnie Gauch, Division of Trading and Markets, illustrated the main components of the final registration rules which describe the process to register with the Commission and provide supplementary paperwork for entities jointly registered with the CFTC. Gauch also outlined the two certifications required by the ruling, which 1) certify that sufficient procedures have been developed and implemented to prevent violations of federal securities law; and 2) certify that chief compliance officers know that no persons subject to statutory disqualification should be affecting swaps unless otherwise indicated.
Jonathan Shapiro, Division of Trading and Markets, outlined the Proposed Rule of Practice 194 which provides a process to grant relief for an entity which associates with a natural person or entity subject to statutory qualification if the relief is “consistent with public interest.” He added that the proposal contains a provision which grants relief through mutual recognition of relief already granted by the CFTC, other self-regulatory organizations (SROs) and registered futures associations.
Commissioner Luis Aguilar noted that, in response to the derivatives market causing “serious” damage to the economy during the financial crisis, Title VII of Dodd-Frank tasked the Commission and CFTC with developing the regulatory framework for this market.
He continued that the new rules, if adopted, allow the Commission significant oversight authority, require certification of policies and procedures to prevent violations of federal securities law, and deem an entity conditionally registered as soon as its application is submitted, requiring adherence to Title VII rules at that time.
Proposed Rule 194, Aguilar noted, allows a 30-day temporary exclusion from the statutory prohibition to permit Commission staff to recommend and decide whether to grant or deny permanent exclusion for an entity seeking exemption. He outlined the deference to the CFTC and the Financial Regulatory Authority (FINRA) inherent in this rule, and noted the “tensions” raised between regulators on this issue.
Aguilar urged the Commission to “move with urgency” and supported the adoption of both the final and the proposed rules.
Commissioner Gallagher
Commissioner Daniel Gallagher characterized this final rule as another example of “regulatory overreach,” noting that the proposed rule sought only to establish that an SBS entity had the operational capacity to act as a dealer or swap participant. While he supported the rule, Gallagher recommended that, in the future, the Commission omit the certifications provision and simply require the adoption of written policies to prevent violations of federal securities law.
Gallagher added that he ultimately supported Proposed Rule 194 as well, although it was a “close call” because of his concerns about the “unnecessary” 180-day deadline imposed for SEC action. He lauded the staff for a proposal which deferred to the decision making of other regulators, noting that regulatory duplication makes no sense and “substituted compliance works domestically” as well.
Commissioner Stein
Commissioner Kara Stein established the importance of finalizing the swap dealer registration process and lauded the forms and certifications developed through the process as providing the SEC with basic information needed to conduct oversight. She expressed concern about the pace of promulgating swaps rules, however, and noted that this is just the “tip of the iceberg” on that regard.
Stein criticized Proposed Rule 194 for the unconditional recognition of waivers from other regulatory agencies, saying it “eviscerates” the Title VII bar established by Congress and renders the rest of the process “little more than fiction.” She approved of the final rule but opposed the proposed rule.
Commissioner Piwowar
Commissioner Michael Piwowar, in his statement, commended the staff for the consensus approach used in devising the final rule and supported it; however, he expressed concern over the use of certifications which he is “not convinced” will increase compliance but instead simply increase personal liability faced by senior officers of registrants.
Piwowar decried the “misguided position” incumbent in Proposed Rule 194 which fails to follow the regulatory framework established by the CFTC. He criticized regulators for developing diverging tools in similar product categories which dealers must “struggle” to apply to their agencies, ultimately leading to “inconsistencies” and “profound uncertainty” for registrants.
Pay-Ratio Disclosure Proposal
Chair White
White, in her statement on the pay ratio rule, explained that the final rule implements Section 953(b) of the Dodd-Frank Act and requires companies to compute and disclose the ratio of the chief executive officer’s (CEO’s) annual total compensation to the annual total compensation of the company’s median employee. She noted that rule has been controversial and has spurred “at times, heated dialogue” and highlighted that the SEC received more than 287,400 comment letters, including over 1,500 unique letters in the comment period for the rule.
White stressed the SEC’s responsibility to implement the mandates of Congress in a way that is “as cost-effective as feasible and that best advances our mission” and said that the lack of a specific deadline “does not diminish the agency’s obligation to act.”
She said the ratio will provide shareholders with information to be used when considering a company’s executive compensation practices, including say-on-pay votes, and noted that the final rule provides companies with “substantial discretion to use estimates and sampling.”
White then explained that the rule excludes emerging growth companies, smaller reporting companies, foreign private issuers, registered investment companies, and registrants filing under the U.S.-Canadian Multijurisdictional Disclosure System. She also highlighted that other changes to the final rule include: 1) an exemption for situations when foreign data privacy laws prohibit obtaining compensation information; 2) an ability to exclude up to five percent of non-U.S. employees when determining the median employee; 3) allowing companies to use cost-of-living adjustments when determining the median employee and calculating the employee’s total compensation; 4) allowing companies to choose any date during the last three months of a company’s fiscal year to determine the median employee; and 5) permitting companies to use the same median employee for three years unless there has been a significant change in the employee population or employee compensation arrangements.
Staff Presentations
Keith Higgins, Director of the SEC’s Division of Corporation Finance, explained that the rules allow companies to select the methodology they use to determine median employee compensation and that this flexibility should allow all registrants to provide this information in a cost-efficient manner.
John Fieldsend, Division of Corporation Finance, said the rule is designed to comply with Congressional mandate while addressing concerns raised by commenters, and also highlighted that companies can choose the methodology that works best for their individual “facts and circumstances.” He noted that companies can use tax form or payroll record information to come up with a “reasonable estimate” of median employee compensation with a brief description of the methodology and material assumptions made and said that registrants are permitted, but not required, to supplement their disclosures with a narrative description.
Fieldsend noted that the rules require inclusion of any individuals employed in consolidated subsidiaries and that the definition of employee encompasses full time, part time, and seasonal or temporary workers. He explained that the disclosure must be included in registration statements, proxy statements, and annual reports and said that registrants will be required to comply with the rule for the first full fiscal year beginning on or after January 2017.
Mark J. Flannery, Director of the Division of Economic and Risk Analysis, said that his Division analyzed the potential implications of the rule, but that the benefits of assisting shareholders in their decisions on “say on pay” votes were not able to be quantified. He said costs to companies with complex foreign operations “could be considerable” but noted that the rule was modified to be flexible in order to address cost concerns, saying that statistical sampling can lower compliance costs. Flannery highlighted that the rule does not prescribe a specific approach to calculating the ratio.
Commissioner Aguilar
Aguilar, in his statement, voiced his support for the pay ratio rule and stated that the information will “better equip” shareholders to promote accountability of compensation practices at the companies they own. The rule is one of the “most controversial rules the SEC has been required to undertake from Dodd-Frank,” he said, but it contains a “thoughtful and reasonable” approach that provides flexibility to companies. Aguilar explained that the ratio should complement other proposed executive compensation rules that promote corporate accountability, as it incorporates many discretionary decisions by the SEC consistent with the Dodd-Frank mandate.
Commissioner Gallagher
Gallagher, in his statement, voiced his opposition to the rule, stating that it will “shame companies” into lowering CEO Pay. He continued that addressing income inequality “is not a province of the SEC” and that there are “other pressing matters” for the SEC to focus on. They pay ratio rule, Gallagher stressed, “may be the most useless of all Dodd-Frank mandates.” He explained that he could support the ratio if there was a limit on the population of employees to only full-time workers in the U.S., but that instead the proposed rule is “fatally flawed” by including all employees. Gallagher questioned what benefits would be gained through the rule, as there is “no credible evidence” that a “reasonable investor” will find the ratio useful.
Commissioner Stein
Stein stated that the proposed rule will allow companies to use a statistic sampling to determine the median employee and only require companies to locate the median employee every three years, which “should make it easier.” She continued that companies will be able to exclude certain foreign employees should the rule break foreign policy laws. Companies will have the option, Stein noted, to remove the cost-of-living allowance to employees when identifying the median, and will be required to display the “unadjusted” ratio should this removal occur. She concluded by stating her support for the proposed rule.
Commissioner Piwowar
Piwowar, in his statement, stressed his opposition to the proposed rule, stating that it will harm investors, negatively affect competition, and restrict capital formation. He continued that the rule proposal does not identify any “objective, goal or benefit that the Commission believes the rulemaking is intended to accomplish.” Piwowar noted that there are now 23 co-sponsors to a bill introduced in the House of Representatives by Rep. Bill Huizenga (R-Mich.) to repeal Section 953(b), as well as a pay-ratio repeal bill in the Senate sponsored by Sen. Mike Rounds (R-S.D.), and questioned the timing of the vote given that Congress is trying to repeal the provision.
Vote Results
The Commission voted 5-0 to approve the final rule for registration of SBS dealers and MSP.
The Commission voted 3-2 to approve the proposed rule of practice concerning statutory disqualifications, with Commissioners Stein and Piwowar dissenting.
The Commission voted 3-2 to approve the pay ratio rule, with Commissioners Gallagher and Piwowar dissenting.
For more information on this meeting, please click here.
,Blog Tags:,Blog Categories:,Blog TrackBack:,Blog Pingback:No,Hearing Summaries Issues:General,Hearing Summaries Agency:SEC,Publish Year:2015
Securities and Exchange Commission
Open Meeting
Wednesday, August 5, 2015
Key Topics & Takeaways
- Approval of Executive Pay-Ratio Proposal: The Commission voted 3-2 to approve the pay ratio rule, with Commissioners Gallagher and Piwowar dissenting.
- Approval of Final Rule for Registration of SBS Dealers and Participants: The Commission voted 5-0 to approve the final rule for registration of Security-Based Swap dealers and major swap participants.
- Approval of Proposed Rule of Practice 194: The Commission voted 3-2 to approve the proposed rule of practice concerning statutory disqualifications, with Commissioners Stein and Piwowar dissenting.
Commissioners & Staff
- Mary Jo White, Chair, SEC
- Luis A. Aguilar, Commissioner, SEC
- Daniel M. Gallagher, Commissioner, SEC
- Kara M. Stein, Commissioner, SEC
- Michael S. Piwowar, Commissioner, SEC
- Gary Goldsholle, Deputy Director, Division of Trading and Markets, SEC
- Mark Flannery, Chief Economist and Director, Division of Economic and Risk Analysis, SEC
- Bonnie Gauch, Division of Trading and Markets, SEC
- Johnathan Shapiro, Division of Trading and Markets, SEC
- Keith Higgins, Director, Division of Corporation Finance, SEC
Registration of SBS Dealers and MSPs and Proposed Rule of Practice 194
Securities and Exchange Commission (SEC) Chair Mary Jo White, in her opening remarks, noted that Title VII of the Dodd-Frank Act empowered the SEC with oversight over the $11 trillion outstanding securities-based swaps (SBS) market and that today the Commission would finalize the registration framework for SBS dealers and major swap participants (MSPs).
Dealers, she noted, are relied upon to provide liquidity and access to central clearing, and are trusted to remain financially viable throughout the life of the derivatives contract and that the registration of swap dealers with the SEC is a “fundamental tool” to regulate and supervise their operations. White outlined requirements to submit and update information relating to business activities, structure, background and controlled affiliates, the information which would become the core for the SEC’s ongoing oversight initiatives.
White added that the regulation would also require dealers and MSPs to “undertake due diligence” to put in place a compliance framework with federal securities law and a prohibition of persons and entities with statutory disqualifications from engaging in swaps transactions that would be illustrated through a dual certification process.
In the proposed Rule of Practice 194, she said, the Commission seeks to strike a “careful” and “reasonable” balance between allowing associations with statutorily disqualified persons or entities so long as they are disclosed, and an overarching rule that establishes a “transparent, efficient” and “comprehensive” system for continued association with unqualified persons.
White expressed interest in comments relating to the temporary relief provision and associated timetables, and whether appropriate consideration is given in the proposal to the Commodity Futures Trading Commission (CFTC) and other regulators.
Staff Presentations
Gary Goldsholle, Deputy Director of the Division of Trading and Markets, outlined the content included in the release to include two separate but related rules, the first relating to registration and the second to continued dealer association with persons and entities facing statutory disqualification by the agency.
The registration rule, he said, offers a “comprehensive and efficient” registration process based upon conditional registration that will allow the SEC to grant ongoing registration or begin proceedings to deny registration.
Goldsholle added that the proposed Rule of Practice 194 would allow a swap entity to apply to the Commission to find that an associated person subject to a statutory disqualification may continue affecting swaps in the dealer’s favor. He characterized the combined rules as “robust” and “appropriately tailored” for the SBS market.
Mark Flannery, Director and Chief Economist, Division of Economic and Risk Analysis, outlined the potential benefits associated with both the final and proposed rules, including increased information disclosure which could reduce asymmetric information about counterparty quality and increase competition based on “quality of execution.” The costs, he outlined, could include the potential withdrawal of entities from the market which could increase market costs when captured by existing market players unless new market entrants captured market share.
Proposed Rule of Practice 194, he added, includes a provision which eliminates costs of duplicative review if the section of the rule which allows for mutual recognition of exemptions from other regulatory agencies is retained.
Bonnie Gauch, Division of Trading and Markets, illustrated the main components of the final registration rules which describe the process to register with the Commission and provide supplementary paperwork for entities jointly registered with the CFTC. Gauch also outlined the two certifications required by the ruling, which 1) certify that sufficient procedures have been developed and implemented to prevent violations of federal securities law; and 2) certify that chief compliance officers know that no persons subject to statutory disqualification should be affecting swaps unless otherwise indicated.
Jonathan Shapiro, Division of Trading and Markets, outlined the Proposed Rule of Practice 194 which provides a process to grant relief for an entity which associates with a natural person or entity subject to statutory qualification if the relief is “consistent with public interest.” He added that the proposal contains a provision which grants relief through mutual recognition of relief already granted by the CFTC, other self-regulatory organizations (SROs) and registered futures associations.
Commissioner Luis Aguilar noted that, in response to the derivatives market causing “serious” damage to the economy during the financial crisis, Title VII of Dodd-Frank tasked the Commission and CFTC with developing the regulatory framework for this market.
He continued that the new rules, if adopted, allow the Commission significant oversight authority, require certification of policies and procedures to prevent violations of federal securities law, and deem an entity conditionally registered as soon as its application is submitted, requiring adherence to Title VII rules at that time.
Proposed Rule 194, Aguilar noted, allows a 30-day temporary exclusion from the statutory prohibition to permit Commission staff to recommend and decide whether to grant or deny permanent exclusion for an entity seeking exemption. He outlined the deference to the CFTC and the Financial Regulatory Authority (FINRA) inherent in this rule, and noted the “tensions” raised between regulators on this issue.
Aguilar urged the Commission to “move with urgency” and supported the adoption of both the final and the proposed rules.
Commissioner Gallagher
Commissioner Daniel Gallagher characterized this final rule as another example of “regulatory overreach,” noting that the proposed rule sought only to establish that an SBS entity had the operational capacity to act as a dealer or swap participant. While he supported the rule, Gallagher recommended that, in the future, the Commission omit the certifications provision and simply require the adoption of written policies to prevent violations of federal securities law.
Gallagher added that he ultimately supported Proposed Rule 194 as well, although it was a “close call” because of his concerns about the “unnecessary” 180-day deadline imposed for SEC action. He lauded the staff for a proposal which deferred to the decision making of other regulators, noting that regulatory duplication makes no sense and “substituted compliance works domestically” as well.
Commissioner Stein
Commissioner Kara Stein established the importance of finalizing the swap dealer registration process and lauded the forms and certifications developed through the process as providing the SEC with basic information needed to conduct oversight. She expressed concern about the pace of promulgating swaps rules, however, and noted that this is just the “tip of the iceberg” on that regard.
Stein criticized Proposed Rule 194 for the unconditional recognition of waivers from other regulatory agencies, saying it “eviscerates” the Title VII bar established by Congress and renders the rest of the process “little more than fiction.” She approved of the final rule but opposed the proposed rule.
Commissioner Piwowar
Commissioner Michael Piwowar, in his statement, commended the staff for the consensus approach used in devising the final rule and supported it; however, he expressed concern over the use of certifications which he is “not convinced” will increase compliance but instead simply increase personal liability faced by senior officers of registrants.
Piwowar decried the “misguided position” incumbent in Proposed Rule 194 which fails to follow the regulatory framework established by the CFTC. He criticized regulators for developing diverging tools in similar product categories which dealers must “struggle” to apply to their agencies, ultimately leading to “inconsistencies” and “profound uncertainty” for registrants.
Pay-Ratio Disclosure Proposal
Chair White
White, in her statement on the pay ratio rule, explained that the final rule implements Section 953(b) of the Dodd-Frank Act and requires companies to compute and disclose the ratio of the chief executive officer’s (CEO’s) annual total compensation to the annual total compensation of the company’s median employee. She noted that rule has been controversial and has spurred “at times, heated dialogue” and highlighted that the SEC received more than 287,400 comment letters, including over 1,500 unique letters in the comment period for the rule.
White stressed the SEC’s responsibility to implement the mandates of Congress in a way that is “as cost-effective as feasible and that best advances our mission” and said that the lack of a specific deadline “does not diminish the agency’s obligation to act.”
She said the ratio will provide shareholders with information to be used when considering a company’s executive compensation practices, including say-on-pay votes, and noted that the final rule provides companies with “substantial discretion to use estimates and sampling.”
White then explained that the rule excludes emerging growth companies, smaller reporting companies, foreign private issuers, registered investment companies, and registrants filing under the U.S.-Canadian Multijurisdictional Disclosure System. She also highlighted that other changes to the final rule include: 1) an exemption for situations when foreign data privacy laws prohibit obtaining compensation information; 2) an ability to exclude up to five percent of non-U.S. employees when determining the median employee; 3) allowing companies to use cost-of-living adjustments when determining the median employee and calculating the employee’s total compensation; 4) allowing companies to choose any date during the last three months of a company’s fiscal year to determine the median employee; and 5) permitting companies to use the same median employee for three years unless there has been a significant change in the employee population or employee compensation arrangements.
Staff Presentations
Keith Higgins, Director of the SEC’s Division of Corporation Finance, explained that the rules allow companies to select the methodology they use to determine median employee compensation and that this flexibility should allow all registrants to provide this information in a cost-efficient manner.
John Fieldsend, Division of Corporation Finance, said the rule is designed to comply with Congressional mandate while addressing concerns raised by commenters, and also highlighted that companies can choose the methodology that works best for their individual “facts and circumstances.” He noted that companies can use tax form or payroll record information to come up with a “reasonable estimate” of median employee compensation with a brief description of the methodology and material assumptions made and said that registrants are permitted, but not required, to supplement their disclosures with a narrative description.
Fieldsend noted that the rules require inclusion of any individuals employed in consolidated subsidiaries and that the definition of employee encompasses full time, part time, and seasonal or temporary workers. He explained that the disclosure must be included in registration statements, proxy statements, and annual reports and said that registrants will be required to comply with the rule for the first full fiscal year beginning on or after January 2017.
Mark J. Flannery, Director of the Division of Economic and Risk Analysis, said that his Division analyzed the potential implications of the rule, but that the benefits of assisting shareholders in their decisions on “say on pay” votes were not able to be quantified. He said costs to companies with complex foreign operations “could be considerable” but noted that the rule was modified to be flexible in order to address cost concerns, saying that statistical sampling can lower compliance costs. Flannery highlighted that the rule does not prescribe a specific approach to calculating the ratio.
Commissioner Aguilar
Aguilar, in his statement, voiced his support for the pay ratio rule and stated that the information will “better equip” shareholders to promote accountability of compensation practices at the companies they own. The rule is one of the “most controversial rules the SEC has been required to undertake from Dodd-Frank,” he said, but it contains a “thoughtful and reasonable” approach that provides flexibility to companies. Aguilar explained that the ratio should complement other proposed executive compensation rules that promote corporate accountability, as it incorporates many discretionary decisions by the SEC consistent with the Dodd-Frank mandate.
Commissioner Gallagher
Gallagher, in his statement, voiced his opposition to the rule, stating that it will “shame companies” into lowering CEO Pay. He continued that addressing income inequality “is not a province of the SEC” and that there are “other pressing matters” for the SEC to focus on. They pay ratio rule, Gallagher stressed, “may be the most useless of all Dodd-Frank mandates.” He explained that he could support the ratio if there was a limit on the population of employees to only full-time workers in the U.S., but that instead the proposed rule is “fatally flawed” by including all employees. Gallagher questioned what benefits would be gained through the rule, as there is “no credible evidence” that a “reasonable investor” will find the ratio useful.
Commissioner Stein
Stein stated that the proposed rule will allow companies to use a statistic sampling to determine the median employee and only require companies to locate the median employee every three years, which “should make it easier.” She continued that companies will be able to exclude certain foreign employees should the rule break foreign policy laws. Companies will have the option, Stein noted, to remove the cost-of-living allowance to employees when identifying the median, and will be required to display the “unadjusted” ratio should this removal occur. She concluded by stating her support for the proposed rule.
Commissioner Piwowar
Piwowar, in his statement, stressed his opposition to the proposed rule, stating that it will harm investors, negatively affect competition, and restrict capital formation. He continued that the rule proposal does not identify any “objective, goal or benefit that the Commission believes the rulemaking is intended to accomplish.” Piwowar noted that there are now 23 co-sponsors to a bill introduced in the House of Representatives by Rep. Bill Huizenga (R-Mich.) to repeal Section 953(b), as well as a pay-ratio repeal bill in the Senate sponsored by Sen. Mike Rounds (R-S.D.), and questioned the timing of the vote given that Congress is trying to repeal the provision.
Vote Results
The Commission voted 5-0 to approve the final rule for registration of SBS dealers and MSP.
The Commission voted 3-2 to approve the proposed rule of practice concerning statutory disqualifications, with Commissioners Stein and Piwowar dissenting.
The Commission voted 3-2 to approve the pay ratio rule, with Commissioners Gallagher and Piwowar dissenting.
For more information on this meeting, please click here.