Despite her imminent resignation, SEC Chair White nonetheless entered the lion’s den one last time and today testified before House FinServ on the SEC’s agenda and budget. While Chairman Hensarling (R-TX) departed immediately after his round of questions, many Members stayed to debate executive compensation, fintech, and the SEC’s agenda now and to come. Ranking Member Waters (D-CA) strongly defended Dodd-Frank but indicated Democratic receptiveness to a new-style Glass-Steagall. We forecast last week that regulators will be working hard to push the final incentive compensation rule out the door and that Chair White will try to advance a rule on funds’ use of derivatives (see Client Report ELECTION22). Although several Republicans called for Chair White to pass pending rulemakings on to the next Commission, she today confirmed that work is proceeding, in particular refusing to rule out finalizing the incentive compensation rule and denying any suggestion that the SEC would rush the rule. In response to press reports that Commission Piwowar may stall this rule, Chair White stated that there have been no attempts at the SEC to do so for this rule or any others on the SEC’s agenda. She added that the SEC will work on rules implementing Dodd-Frank Title VII capital margin segregation requirements, despite Rep. Hensarling’s objections, and also try to finalize a rule permitting electronic delivery of mutual fund reports. Rep. Luetkemeyer (R-KY) made clear that credit rating agency reform remains a priority, confirming prior FedFin reports that CRA reform might be an area of bipartisan compromise and action in 2017. Several Members focused on fintech regulation, and Chair White reiterated that the SEC should take a leading role and ensure investors are protected while doing what it can to facilitate innovation. This report analyzes today’s session.
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