I’m still trying to get my brain around the letter that Rep. Steve Garrett, R-N.J., and other Republican members of his House Financial Services Subcommittee sent to SEC chairman Mary Schapiro on March 17, advising her “not to move forward with a fiduciary rule.” It seems the House Republicans don’t feel that the SEC has “…identified and defined clear problems that would justify a rulemaking and does not have a solid basis up which to move forward.”
(See Melanie Waddell’s news report on the letter from Rep. Garrett and other members of his House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises.)
For its part, Garrett’s subcommittee is going to hold hearings on the matter, including on the issue of a new SRO (they didn’t specify for whom), and further suggested that the SEC conduct its own “thorough” cost-benefit analysis of the whole reregulation of brokers. Aside from the transparent delaying tactic of the Republicans (no doubt in some way inspired by SIFMA to gain more time to garner support for FINRA as the SRO for RIAs), the suggestion seems quite reasonable: Who wouldn’t want to see a clear comparison of the potential benefits of new regulations versus the costs they are likely to incur? After all, the Federal budget (and its corresponding budget deficit) has filled out a bit in recent years, and the Republicans seem to feel the need to at least slow the expansion.