In an October 1, 2009 press announcement, Congressman Paul E. Kanjorski, the Chairman of the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, released drafts of legislation consisting of three key financial services industry regulatory reform bills: (1) the Investor Protection Act, (2) the Private Fund Investment Advisors Registration Act, and (3) the Federal Insurance Office Act. These three bills, taken together, ambitiously propose wide-ranging changes to financial regulation.
The Investor Protection Act proposes to strengthen the SEC's powers to, as the name suggests, protect investors by providing "dozens of new enforcement powers and regulatory authorities," doubling the agency's funding over a five year period, and making it easier for the SEC to collaborate with its counterpart agencies in other countries. More controversially, the proposed legislation also creates protections and financial incentives for whistleblowers to bring wrongdoing to the attention of regulators, up to 30% of the amount of sanctions ultimately imposed on the wrongdoers.
The Private Fund Investment Advisors Registration Act for the first time would require many previously virtually unregulated financial firms, such as hedge funds and private equity funds, to register with the SEC. This bill also proposes to give regulators inspection and enforcement authority over all kinds of investment funds, and would impose disclosure and recordkeeping requirements on hedge funds and private equity funds.
The Federal Insurance Office Act would create a federal office of insurance to "provide national policymakers with access to information" to faciliate a "well functioning financial system." This proposed new federal agency would not preempt state regulators of insurance and have little or no enforcement power, so its role would have to be more information gathering and coordination rather than enforcement oriented.
The full text of Congressman Paul E. Kanjorski's press release, as well as more details about and links to the "discussion drafts" of the three bills mentioned above are available at: http://kanjorski.house.gov/index.php?option=com_content&task=view&id=1627&Itemid=1