The North American Securities Administrators Association (NASAA) voiced its support for several legislative proposals that promote investor confidence and greater corporate accountability.
At a hearing held this week by the House Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets, chaired by Rep. Carolyn Maloney (D-NY), NASAA said these proposals would better serve Main Street investors.
“NASAA applauds the Subcommittee on its decision to hold its initial hearings of the 116th Congress on proposals that explicitly place the interest of Main Street investors first,” Maryland Securities Commissioner and NASAA Board member Melanie Lubin said at the hearing. “When we put the interests of Main Street investors first, our capital markets, our economy and our country all win.”
One of the six proposals the committee reviewed was the Investor Choice Act of 2019, which would prohibit broker-dealers and investment advisers from including binding arbitration clauses in customer account agreements.
“We strongly support the current bill, and we look forward to working with the Chairwoman and the Committee in passing the legislation this year,” Lubin testified.
NASAA also expressed support for the Insider Trading Prohibition Act of 2019, which would create an explicit statutory definition of “insider trading.” Lubin said this is a major step forward in codifying much of the existing insider trading case law.
In addition, NASAA supports the 8-K Trading Gap Act of 2019. This bill seeks to quash the opportunity to take advantage of non-public information that occur between the time an insider learns of a corporate event and the required filing with the SEC of a Form 8-K.
“We agree that there appears to be compelling evidence that corporate insiders take advantage of this trading gap,” Lubin said. “Closing this gap is a basic issue of fairness for retail investors.”
NASAA also backs draft legislation to clarify that whistleblowers are protected by anti-retaliation provisions when they report alleged misconduct to their employers. Further, Lubin urged lawmakers to address outstanding rules related to executive compensation.
“The Dodd-Frank Act has largely achieved its goals, and where appropriate Congress has taken steps to adjust certain of its provisions,” Lubin said. “Just as the 111th Congress was correct to reform our financial system in 2010, the 116th Congress is correct to insist that the SEC fully implement the law, including by completing these mandatory rulemakings.”