Date: 2016-09-09
Speaker: MAXINE WATERS (democrat)
Chamber: H
State: California

Mr. Speaker. investors. consumer advocates. public pension funds. and others have spoken on H.R. 5424. and they have deemed it to be harmful. Let me read for you a few excerpts from opposition letters received by the House of Representatives. First of all. let me tell you who they are: Americans for Financial Reform. the American Federation of State. County. and Municipal Employees. the American Federation of Teachers. the Consumer Federation of America. Communications Workers of America. and U.S. PIRG. "Far from modernizing the regulation of investment advisers. this legislation would roll back the clock to the years before private fund advisers were subject to elementary oversight measures. measures that numerous documented abuses have shown to be necessary for investor protection. The laundry list of regulatory exemptions in this bill would enable the exploitation of investors. possibly including outright fraud. It would also reduce the information available to regulators to address systemic risk." North American Securities Administrators Association. Incorporated. these are our State securities regulators. the cops on the beat policing Main Street from financial crime. let me give you their quote: "Although the bill purports to be an updating of the framework for the regulation of investment advisers. it is in fact little more than an effort to shield advisers to private funds from the scrutiny of SEC registration and examination oversight." Lets hear what CalPERS has to say: "We believe that H.R. 5424 would erode the DoddFrank provisions that established greater transparency into private equity funds. protected investors against fraud by fund advisers. and enhanced the ability of regulators to effectively monitor systemic risk in the private fund industry." CalSTRS: "This current legislation amends the Investment Advisers Act of 1940 to purportedly modernize certain requirements related to private equity advisers. In actuality. this proposed legislation would roll back important investor protections provided to funds. in terms of transparency and oversight by the Securities and Exchange Commission." Lets hear from the Institutional Limited Partners Association: "The ILPA believes that the changes to mandatory disclosures and other requirements as proposed in H.R. 5424 would be counterproductive to providing institutional limited partners with the transparency they need to ensure alignment of interest in their private equity fund investments. and to carry out their duty to protect the interests of millions of beneficiaries of these investmentsretirees. policyholders. nonprofit and educational institutions." Lets hear from the Council Institutional Investors: "H.R. 5424 rolls back important transparency and reporting requirements that we and many of our members believe are critical to investor protection. For example. section 3(b) of H.R. 5424 would provide exceptions for private equity and hedge funds from existing disclosure requirements on Form PF. a confidential form used by the U.S. Securities and Exchange Commission and other regulators to track risks in the financial system." Lets hear from Public Citizen: "This bill allows investment advisers to escape current safeguards designed to reduce inflated sales pitches or obfuscation of investment risks. Specifically. investment advisers need to make sure that potential private equity investors have basic sales documents such as the company prospectus before consummating a sale. Investors in private funds should be accorded ample information. The bill also frustrates efforts by investors to gain access to company records in socalled booksandrecords requests." Unite Here: "H.R. 5424 is an invitation for private equity managers to make false and misleading statements to the public. At a time when the nearly $4 trillion private equity industry should become more transparent. H.R. 5424 would enable it to become more opaque. putting workers. retirees. and the general public at risk." Mr. Speaker. I reserve the balance of my time.