Financial Services Subcommittees Hold SEC Oversight Hearings

Two House Financial Services Subcommittees held hearings with SEC officials exercising the House Committee’s oversight jurisdiction of the agency. The Capital Markets Subcommittee, chaired by Representative Ann Wagner (R-MO) heard testimony from the Director of the Division of Trading and Markets, Haoxiang Zhu, and Dr. Jessica Wachter, SEC Chief Economist and Director of the Division of Economic and Risk Analysis (DERA). The hearing focused on the pace of rulemaking, the economic impact (and cost) of the SEC’s agenda, and a variety of specific rulemakings including the four proposals on equity market structure. Chair Wagner noted agencies typically advance one proposal at a time by presenting clear and convincing evidence of a problem or failure warranting such a drastic policy change, she argued that has not been the case at the Commission. Chair Wagner also stated that Dr. Wachter is “willfully ignoring” her duty to provide adequate economic analysis.

Meanwhile, the Oversight Subcommittee, chaired by Representative Bill Huizenga (R-MI), heard testimony from the SEC’s General Counsel Megan Barbero. The hearing focused on the Commission’s slow response to inquiries from the full Committee and from the Subcommittee. Chair Huizenga noted Barbero and Chair Gensler have missed deadlines, offered no accommodations, and blamed staff shortages, budget deficiencies, and bureaucratic obstacles on the lack of response. The hearing also focused on the Commission’s proposal on climate disclosure with Republicans questioning the Commission’s ability to compel information in this space.

Of note to fund directors, the Capital Markets Subcommittee has expressed a desire to have the Director of the Division of Investment Management, William Birdthistle, testify; however, a hearing date has not yet been announced.

Click here to watch the Capital Markets Subcommittee hearing with Trading and Markets and DERA staff.
Click here to watch the Oversight Subcommittee hearing with General Counsel Barbero.