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House Passes the SEC Regulatory Accountability Act

The House of Representatives passed a bipartisan bill on Thursday in a 243-184 vote which calls for a cost-benefit analysis of all rules promulgated by the Securities and Exchange Commission.

The SEC Regulatory Accountability Act – H.R. 78, sponsored by Rep. Ann Wagner (R-MO), amends the Securities Exchange Act of 1934 and prohibits the SEC from issuing a rule if it cannot make “a reasoned determination that the benefits of the intended regulation justify the costs of the regulation.”

The legislation requires the SEC to identify the nature and source of the problem that the proposed regulation is designed to address, provide an appropriate cost/benefit analysis to justify the need for the regulation, and assess whether there are any available alternatives to rulemaking.

In determining the costs and benefits of a proposed regulation, the SEC must consider its impact on investor choice, market liquidity, and small businesses, and all proposed regulations must be written in plain and easy to understand language.

“This common-sense legislation will help drain the swamp that Washington bureaucrats have built over the past eight years, while better protecting American families from top-down, one-size-fits-all regulations that cost nearly $15,000 for every household,” said Rep. Wagner.

The bill also requires the SEC to review its existing regulations every five years to identify any outdated, ineffective, or excessively burdensome regulations. The SEC is then required to modify, streamline, repeal, or even expand regulations based on that review.

A similar bill has yet to be introduced in the Senate

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