Press Releases

Rep. Loudermilk (R-GA) issued the following statement after his bill, the Exchange Regulatory Improvement Act (H.R. 3555), passed the Financial Services Committee with a unanimous vote:

“Over time, stock exchanges have expanded their business models to include additional products and services not related to trading on the exchange. While the Securities Exchange Commission (SEC) can and should oversee the core trading functions of the exchange, the SEC has attempted to regulate these new unrelated products and services, arbitrarily defining them as a ‘facility’ of the exchange. The definition of a ‘facility’ has not been updated since it was written in 1934, and it has failed to take into account these new products and services, such as regulatory compliance software, e-mortgage registries, and data analytics. The result of this diversification by the exchanges has unfortunately resulted in SEC overregulation, and has caused confusion amongst businesses and lawmakers on how the SEC interprets what is a ‘facility.’

“My bill simply requires the SEC to provide transparency in this area by explaining its process for determining what is a ‘facility’ of an exchange. Having clarification on this issue would go a long way to foster innovation in the capital markets by ensuring that exchanges can establish diverse products and services, which are not related to transactions on the exchange, without the regulatory hurdles and costs associated with SEC oversight. I look forward to this bipartisan bill moving quickly to the House Floor for debate and passage."

Summary of H.R. 3555:

• Requires the SEC to conduct a rulemaking to explain the facts and circumstances that it considers when determining whether an exchange product or service is a "facility" of the exchange.
• Requires the SEC to apply those facts and circumstances when considering whether to regulate any new products or services under the Exchange Act of 1934.