Rep. Spencer Bachus, R-Ala., plans legislation to restructure the SEC to implement changes recommended by the agency’s inspector general, the Government Accountability Office and a consultant’s report mandated by the Dodd-Frank Act.
Mr. Bachus, chairman of the House Financial Services Committee, said his “SEC Modernization Act” shouldn’t be interpreted as criticism of Chairman Mary Schapiro or any of her predecessors.
“It is the structure of the agency itself that is the main problem,” Mr. Bachus said Tuesday in a statement announcing plans for the legislation. “This legislation will be a comprehensive restructuring of the SEC. It will make the SEC more efficient, consolidate duplicative offices, enable the agency to use better technology, and strengthen ethical safeguards to avoid conflicts of interest.”
The legislation would shutter the Office of Compliance, Inspections and Examinations and move its duties under the Division of Trading and Markets and Division of Investment Management. It would similarly split up the Division of Risk, Strategy and Innovation that Ms. Schapiro created as an agency research arm, reassigning that role to separate offices inside the other four divisions.
Dodd-Frank required an independent analysis of the agency, produced in March by Boston Consulting Group, which found the SEC is hundreds of employees short of what it needs to manage its duties and that too many of its offices report directly to the chairman.
Mr. Bachus’ bill would also limit how the SEC can spend a $100 million reserve fund set up by Dodd-Frank, requiring that the money go toward technology improvements.
The agency would also have to submit an annual agenda to Congress each year.
SEC Inspector General H. David Kotz declined to comment on the bill. His office has issued 11 reports this year examining SEC performance, making recommendations for improving economic analysis of rule making and investigating “improper actions” in securing agency leases.