Committee on Capital Markets Regulation

In 2009, the Committee determined four critical objectives based upon a year of observation and research into the financial crisis that are further broken down into 57 specific recommendations.[3] These four objectives are:

1. Reduced systemic risk through more sensible and effective regulation.
2. Increased disclosure to protect investors and stabilize the market.
3. A unified regulatory system where lines of accountability are clear and transparency in improved.
4. International regulatory harmonization and cooperation.

In 2010, within a 37-page letter to Chairman Dodd, Ranking Member Shelby, Chairman Lincoln and Ranking Member Chambliss, the CCMR evaluated all major elements in the financial reform proposals that have emerged from Senate committees, but focused especially on four as areas for compromise:[4]

1. Federal regulators must have the ability to use tax dollars (and recoup them later) to pay for the orderly resolution of failing institutions in cases where they judge the alternative would be national and/or international financial catastrophe.
2. No banks or non-banks should be labeled “systemically important.”
3. Clarity about jurisdiction over the clearing and settlement of derivatives is crucial to reducing systemic risk, as is increasing these activities.
4. The proposed independent and transparently funded Consumer Financial Protection Bureau (CFPB) should be free of overriding authority except that of the Financial Stability Oversight Council (as provided in the Dodd Bill) and the Treasury Secretary (only when he or she is acting on matters of the “safety and soundness” of the financial system, as in matters of systemic risk).

Released in October 2013, the Committee’s position paper set forth a balanced approach to strengthening cost-benefit analysis requirements applicable to the independent agencies tasked with implementing regulatory reform in the U.S. financial system. The Committee outlined an approach it believed would maximize the economic efficiency of the U.S. regulatory system, minimize procedural burdens on regulators, and help insulate new rulemakings from judicial challenge.[5]

In July 2016, the Committee's “The U.S. Equity Markets: A Plan for Regulatory Reform” sought to inform the public and policymakers about the U.S. equity market structure and evaluate its performance for U.S. investors and public companies.[6] The report set forth 24 recommendations that fell into three categories:

1. Increasing the transparency of U.S. equity markets
2. Strengthening the resilience of U.S. equity markets
3. Reducing transaction costs by enhancing competition

In May 2017, the Committee's “Roadmap for Regulatory Reform” set forth priority regulatory actions for the Trump administration that would promote U.S. economic growth and enhance the stability of the U.S. financial system. The Roadmap consisted of eleven recommendation areas:[7]

1. Conducting a cumulative assessment of regulatory impact
2. Enhancing the U.S. approach to international regulatory frameworks
3. Reexamining bank capital and liquidity requirements
4. Reducing undue regulatory burdens on community banks and regional banks
5. Simplifying and streamlining the Volcker Rule
6. Ensuring that rulemakings are adopted through a transparent and public process
7. Enhancing the process of identifying and addressing systemic risk
8. Establishing a rule of law framework for the Federal Reserve as a lender of last resort
9. Reinvigorating the stagnant U.S. IPO market
10. Reforming trading rules for the U.S. stock market
11. Reviewing the U.S. public enforcement regime

In June 2018, the staff of the Committee developed a comprehensive overview of the structure, operation, and transparency of the U.S. public enforcement system as it pertains to the financial system.[8] The staff set forth recommendations in four major areas:

1. Improving coordination and cooperation between enforcement authorities
2. Rationalizing the setting of sanctions in enforcement actions
3. Ensuring the appropriate use of monetary sanctions
4. Promoting individual accountability

In October 2018, the Committee found that private equity funds have a well-established performance history that justifies expanding access to them.[9] It recommends three ways to do so:

1. Legislative reforms to expand access to direct investments in private equity funds
2. SEC reforms to expand access to public closed-end funds that invest in private equity funds
3. Department of Labor reforms to facilitate the ability of 401(k) plans to offer investment options that provide exposure to private equity funds.