The Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises released draft legislation for the Investor Protection Act, part of the Obama administration’s call for re-regulation of financial services. Rep. Paul E. Kanjorski (D-PA), aims to make investing better for individual investors–like “Aunt Millie”–who was mentioned by SEC Commissioner Elisse Walter in a speech in May.
“Today, we take another step forward in overhauling the regulatory structure of the financial services industry,” said Chairman Kanjorski in an Oct. 2 announcement. “With these three bills we will address many of the shortcomings and loopholes laid bare by the current financial crisis. The Investor Protection Act will better protect investors and increase the funding and enforcement powers of the U.S. Securities and Exchange Commission. We must ensure that investor confidence continues to increase for the betterment of our financial system.
There are provisions with strong language mandating fiduciary duty for all who give advice to investors, and sharper language about disclosures. The bill doubles the funding for the SEC over five years and gives SEC more power to work on behalf of investors. That may not ultimately be enough to do what the SEC is charged with doing but it’s a start and at least will let SEC move ahead on multi-year budgets and planning for things like beefing up technology to help with risk detection and enforcement.
The entire draft bill can be found here.
Comments? Please send them to [email protected]. Kate McBride is editor in chief of Wealth Manager and a member of The Committee for the Fiduciary Standard.