NASAA commends Senators Levin, Schumer and Gramm for preserving principle of "functional regulation" in financial services modernization bill (S. 900)

WASHINGTON (May 7, 1999) – A group representing state securities regulators today commended the Senate for preserving the principle of functional regulation in the financial services modernization bill (S. 900) passed Thursday evening.

State regulators have consistently expressed concerns, in Congressional testimony, about securities products sold at banks without the investor protection provided by state securities regulation.

The North American Securities Administrators Association (NASAA)¹ supported a key amendment offered by Senators Carl Levin (D-Michigan) and Charles Schumer (D-New York) and supported by Banking Committee Chairman Senator Phil Gramm (R-Texas) that preserves the principle that securities transactions at banks will be regulated by securities regulators.

“This bipartisan agreement is a step in the right direction and we look forward to continuing to work with the House Commerce and Banking Committees as they work on legislation that will allow America’s financial services industry to compete globally without compromising vital investor protections at home,” said Ohio’s Securities Commissioner Thomas E. Geyer. Chair of NASAA’s Financial Services Modernization Project Group, Geyer has testified before both the House and Senate on this subject.

NASAA noted a statement this week by Treasury Secretary Robert Rubin that said the Clinton Administration believes that “any financial modernization bill must have adequate protections for consumers,” particularly regarding regulation of the sales of securities.

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