U.S. Senator Ted Kaufman (D-DE) on Thursday expressed concern over Section 929I in the Dodd-Frank Wall Street Reform and Consumer Protection Act -- signed into law last week -- which appears to have the effect of exempting the Securities and Exchange Commission (SEC) from any Freedom of Information Act (FOIA) requests for information received by the SEC from registered entities.
"As written, the exemption throws a cloak over all information received by the Commission from the entities the SEC regulates," said Kaufman. "It is too broad; it does not serve the public interest; it is not consistent with the general goal of greater transparency -- as President Obama has emphasized both with respect to FOIA and financial regulatory issues -- and it should be reevaluated by the SEC and Congress."
While Kaufman understands the provision might allay the concerns of institutions reluctant to release sensitive proprietary information to the SEC that might later be subject to FOIA requests, he said: "FOIA already has exemptions in it to deal with such concerns. If those exemptions need to be broadened, we should have done so with a scalpel."
"Over the last few years, the credibility of our markets has been damaged," Kaufman continued. "Only transparency can best restore that credibility; any exemptions to transparency should hence be narrowly crafted. Section 929I needs a "do-over.'"
In the coming weeks, Kaufman hopes to work with the SEC and other Senators to craft a more reasonable approach that satisfies the legitimate concerns of the SEC without sacrificing the goals of transparency and public accountability.