Bill Overview
Title: SEC Regulatory Accountability Act
Description: This bill direct the Securities and Exchange Commission (SEC) to make specified considerations before issuing securities regulations. Specifically, the SEC must identify the nature and source of the problem that the proposed regulation is designed to address; adopt a regulation only upon a reasoned determination that its benefits justify its costs; identify and assess available alternatives to any regulation; and ensure that any regulation is accessible, consistent, written in plain language, and easy to understand. In determining the costs and benefits of a proposed regulation, the SEC must consider its impact on investors, market liquidity, small businesses, and competition. In addition, the SEC must periodically review its existing regulations to determine if they are outmoded, ineffective, insufficient, or excessively burdensome and review, modify, streamline, expand, or repeal them accordingly. Whenever it adopts or amends a major rule, the SEC must state (1) the regulation's purposes and intended consequences, (2) metrics for measuring the regulation's economic impact, (3) the assessment plan to be used to assess whether the regulation has achieved its stated purposes, and (4) any foreseeable unintended or negative consequences of the regulation.
Sponsors: Rep. Wagner, Ann [R-MO-2]
Target Audience
Population: Individuals involved in or reliant on US securities markets
Estimated Size: 200000000
- The bill pertains to regulations made by the Securities and Exchange Commission (SEC), which governs securities markets.
- Markets affected by SEC regulations include stock exchanges where trades are conducted and involving millions of domestic and international investors.
- Businesses, including large corporations and small businesses, will be affected as they are directly involved in securities transaction and must comply with SEC regulations.
- Investors globally rely on the soundness and efficiency of U.S. securities regulations to inform their investment decisions.
- Transparent and effective regulation can lead to a more stable and efficient market, which enhances investor confidence around the world.
Reasoning
- The target population for the SEC Regulatory Accountability Act includes individual and institutional investors, businesses, and those involved in the securities markets.
- The policy will particularly impact registered brokers, financial analysts, individual investors, and corporate entities engaging with U.S. securities.
- Given the complex and widespread nature of the securities market, the policy's impact might vary, with some individuals, like small business owners and personal investors, experiencing notable effects on their financial strategies.
- By simplifying regulations and ensuring they are well-articulated, the policy aims to reduce uncertainty in compliance that affects financial planning and market participation.
- The budget constraints suggest a need for efficient implementation, providing regulatory improvements without excessive spending.
Simulated Interviews
Financial Analyst (New York, NY)
Age: 38 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 15/20
Statement of Opinion:
- I think the policy is beneficial because simpler and clearer regulations help in my work, making compliance easier.
- The act ensures that any unnecessary regulations are peeled back, which can reduce the compliance burden on our team.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 7 |
| Year 20 | 8 | 6 |
Small Business Owner (Chicago, IL)
Age: 45 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 10/20
Statement of Opinion:
- Reducing unnecessary bureaucracy is appealing because regulatory costs can be a big burden on small businesses.
- The policy gives hope that the process of navigating regulations will be simplified and less costly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 4 |
| Year 20 | 9 | 3 |
Individual Investor (Los Angeles, CA)
Age: 32 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 18/20
Statement of Opinion:
- Simplifying regulations could lead to more transparency in the stock market, potentially reducing risks.
- I look forward to the SEC's policy assessments, as they might lead to more stable markets.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 5 |
Pension Fund Manager (Boston, MA)
Age: 50 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 10.0 years
Commonness: 12/20
Statement of Opinion:
- Periodic review and simplification of regulations might lead to better investment environments.
- Greater clarity in SEC rules can enhance fund strategies and investor trust.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 6 |
| Year 20 | 8 | 5 |
Tech Startup Employee (Austin, TX)
Age: 27 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 14/20
Statement of Opinion:
- Anything that reduces hurdles for our IPO is appreciated, but it's unclear how much direct impact it will have on us.
- This policy seems like it could potentially lower costs associated with going public.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 5 |
| Year 20 | 7 | 5 |
Retired (Orlando, FL)
Age: 60 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- Clear and effective regulations are paramount for securing retirement investments and income.
- Hopeful that the policy will stabilize markets and prevent future downturns which affect retirees.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 4 |
| Year 20 | 7 | 3 |
Corporate Lawyer (San Francisco, CA)
Age: 55 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 13/20
Statement of Opinion:
- The policy seems to streamline my work which could potentially increase the demand for legal consultancy.
- These changes might shift how businesses approach IPOs and public listings, possibly influencing corporate strategy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Online Brokerage Account Holder (Denver, CO)
Age: 29 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 7.0 years
Commonness: 16/20
Statement of Opinion:
- I'm uncertain about how this might change my experience with online trading, though it sounds beneficial.
- Better-regulated markets might mean more consistent returns, which is reassuring.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 4 |
| Year 20 | 6 | 4 |
Startup Founder (Seattle, WA)
Age: 39 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 15.0 years
Commonness: 8/20
Statement of Opinion:
- Anticipating that the policy will decrease the overhead that comes with regulatory hurdles.
- Might positively impact how quickly we can move toward a public offering.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 4 |
| Year 20 | 9 | 3 |
Retirement Planner (Phoenix, AZ)
Age: 42 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 12.0 years
Commonness: 10/20
Statement of Opinion:
- Making regulations clearer is important for creating stable investment environments for my clients.
- I hope this policy repairs some of the more burdensome aspects of the current regulatory process.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 9 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 6 |
| Year 20 | 8 | 5 |
Cost Estimates
Year 1: $15000000 (Low: $12000000, High: $20000000)
Year 2: $15000000 (Low: $12000000, High: $20000000)
Year 3: $15000000 (Low: $12000000, High: $20000000)
Year 5: $15000000 (Low: $12000000, High: $20000000)
Year 10: $15000000 (Low: $12000000, High: $20000000)
Year 100: $15000000 (Low: $12000000, High: $20000000)
Key Considerations
- The act aims to ensure SEC regulations are soundly based on cost-benefit analysis, which could take significant time and resources to implement.
- Proper execution of this act can lead to a more effective regulatory framework, potentially fostering a stronger financial market environment over time.
- Immediate costs might overshadow initial savings, but long-term benefits include greater market stability and possibly enhanced economic growth.
- There may be substantial variation in the economic impact based on how comprehensively the SEC adapts its operations to these new requirements.