Representative Maxine Waters (D-CA) introduced three amendments to the securities laws, two of which would freeze certain SEC proxy rulemaking initatives. (The amendments also included the freeze regarding Regulation Best Interest previously covered.) The U.S. House of Representatives passed the amendments to the bill en bloc by a vote of 227-200.
The amendments would:
- prohibit the SEC from revising the proxy solicitation exemption for certain advisors under SEA Rule 14a-2(b) (Amendment #43);
- restrict the SEC from using funds to revise the threshold for shareholder proposals or resubmissions under SEA Rule 14a-8 (Amendment #44); and
- increase funding for the Small Business Administration Office of Entrepreneurial Development by $5,000,000 (Amendment #46).
Commentary / Steven Lofchie
The freeze on the SEC's proxy rules makes some sense from a political perspective; i.e., Rep. Waters wants to maintain the ability of holders of a small number of shares (which is not the same as a "retail investor") to create proxy fights.
However, I still do not understand the reasoning for defunding Regulation Best Interest, unless Rep. Waters thinks that it will encourage the states to go their own way on securities regulation and create a further disruption and breakdown in the (generally) unitary system of federal regulation of securities. Long-term, that would be a very destructive path: 50 states making up their own eccentric rules.
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