Bill on tallying up regulation costs wins U.S. financial industry backing

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By Lisa Lambert and Sarah N. Lynch | WASHINGTON

WASHINGTON Financial lobbyists on Tuesday
applauded a bill in the U.S. House of Representatives that would
require the Securities and Exchange Commission to review the
costs of rules before putting them into force, which is part of
a broader push from Republicans to reform regulation.

The legislation, introduced by Missouri Republican Ann
Wagner, the newly minted chair of the financial services
oversight subcommittee, is expected to go to the floor of the
House on Thursday for a vote.

“The U.S. capital markets are the envy of the world and we
believe it is critical to study any economic impact of a
proposed rulemaking prior to its completion to protect
investors, protect capital formation, and protect our markets,”
said the Securities Industry and Financial Markets Association,
Wall Street’s primary trade group, in a letter to House
leadership.

The group added the bill would also require the SEC to
periodically review its existing rules and analyze the
effectiveness of its regulation.

Also on Thursday, a bill requiring the major derivatives
regulator, the Commodity Futures Trading Commission, to review
costs of its proposals is scheduled to come to the House floor.

Both bills come as Republicans work toward a broader
overhaul of federal regulation.

Banks, asset managers and others in the financial sector
have said that regulations can often lead to unintended expenses
and that there should be a way to understand how regulations
from a variety of areas fit together when it comes to compliance
costs.

The bills are expected to pass the House, which has
approved similar measures that outgoing President Barack Obama,
a Democrat, opposed. Currently, there is no companion
legislation in the Senate.

President-elect Donald Trump, a Republican, frequently said
on the campaign trail that the costs of complying with federal
regulation can hurt companies’ bottom lines.

The SEC is already required to weigh the impact of its rules
on efficiency, competition and capital formation. It beefed up
efforts in recent years and issued new guidance on the subject
after business groups including the Chamber of Commerce
successfully beat back some rules in federal court.

Wagner’s bill would go beyond those requirements in its
enhanced cost-benefit analysis and existing rule review. It
would also require the SEC to clearly identify the nature of the
problems new rules are intended to solve.

An SEC spokesman did not immediately respond to a request
for comment on it.



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