Rep. Scott Garrett (R-NJ), Chairman of the Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises, delivered the following opening statement today at a hearing to review legislative proposals to improve and enhance the Securities and Exchange Commission (SEC):
"Thank you, Mr. Chairman, and welcome to today's witnesses. I look forward to a good discussion on ways to improve the operations and effectiveness of the SEC.
"I also want to thank Chairman Bachus for allowing the Committee to consider the SEC Regulatory Accountability Act as part of today's proceedings.
"I introduced this legislation with 14 of my colleagues to ensure that the SEC, as an independent agency, would be subject to the president's recent executive order to improve regulation and regulatory review.
"In addition, my bill would strengthen the Commission's cost-benefit analysis by first requiring the Commission to clearly identify the nature of the problem that the proposed regulation will be designed to address and by requiring cost-benefit analysis be performed by the SEC's Office of the Chief Economist.
"To me, these common-sense reforms make a lot of sense, especially given the fact that the Commission continues to struggle with this issue. For instance, in the recent unanimous opinion of the DC Circuit Court of Appeals, which vacated the Commission's proxy access rule, the Court stated that "the Commission acted arbitrarily and capriciously for having failed once again to adequately assess the economic effects of a new rule' and "inconsistently and opportunistically framed costs and benefits of the rule.'
"So while I understand Chairman Schapiro may have some concerns about specific provisions of H.R. 2308, clearly a stronger commitment to cost-benefit analysis by the S.E.C. is absolutely essential to ensure reasonable rules that do not unduly burden registered companies or negatively impact job creation."