Legislation that contains several provisions to stop major SEC rule proposals affecting financial advisors stalled in the House Thursday, and the so-called policy riders face a difficult legislative path ahead.
The House postponed a final vote on an appropriations bill that would fund the Securities and Exchange Commission and several other federal agencies when Republicans couldn’t agree on some non-SEC parts of the bill. There was enough dissension for party leaders to pull the bill from the floor of the chamber, where the GOP holds a 221-212 majority.
The disagreements involved a provision that would affect abortion policy in Washington, D.C. and other policies, according to a report by Bloomberg News.
The funding bill would provide $2 billion for the SEC, a $170.4 million cut in the agency’s current budget. It contains riders that would prevent funding for the SEC to complete proposed rules for public-company climate disclosure, investment advisor custody of client funds and mutual fund reform, among others.
During House floor debate, lawmakers approved amendments that would prohibit funding for SEC rules on advisor conflicts related to the use of predictive data analytics, advisor ESG disclosures, cybersecurity and private funds.
The riders in the original bill and the amendments were mostly driven by the GOP, which reduces their viability as Congress continues its work to reach a budget agreement. Democrats hold a 51-49 Senate majority.
“Very few of these policy riders are likely to survive,” said Neil Simon, vice president for government relations at the Investment Adviser Association. “Senate Democrats are highly unlikely to go along with [those] that have been inserted into appropriations bills in the House.”
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