SEC Chairman Arthur Levitt
Before the Committee on Commerce Concerning H.R. 10,
"The Financial Services Act of 1999"
May 5, 1999
Chairman Oxley, Congressman Towns, and Members of the Subcommittee:
I appreciate the opportunity to testify on behalf of the Securities and Exchange Commission ("SEC" or "Commission") regarding H.R. 10. I am pleased to appear before this Subcommittee again to present the Commission's views on the important issue of modernizing the nation's financial services industries. We look forward to working closely again with this Subcommittee and with the full Commerce Committee to ensure that the best interests of the nation's investors and the integrity of our securities markets are protected.
The Commission has long supported the primary goal of H.R. 10 modernizing the legal framework governing financial services.
For this reason, the Commission and its staff worked closely during the last Congress with the Commerce Committee to help craft legislation that would modernize the legal structure for financial services while at the same time preserving principles that are fundamental to effective oversight of the U.S. securities markets. Our securities markets today are strong, vibrant, and healthy. They are relied on by both individual investors, who are increasingly putting their savings in stocks, bonds, and mutual funds,1 and by American businesses that need to raise capital.2 The success of our securities markets is based on the high level of public confidence inspired by a strong system of investor protection, and on the entrepreneurial and innovative efforts of securities firms. As the nation's primary securities regulator, it is critical that the Commission be able to continue to fulfill its mandate of investor protection and to safeguard the integrity, fairness, transparency, and liquidity of U.S. securities markets.
Although the Commission had reservations, it supported the version of H.R. 10 that was passed by the full House of Representatives in May 1998. However, I must firmly state that subsequent negotiations substantially eroded the basic principles that the Commission believes are critical to maintaining securities markets that are strong, vibrant, and healthy. This critical erosion of basic principles is continued in the version of H.R. 10 now before you. The Commission, therefore, is strongly opposed to the version of H.R. 10 that the House Banking Committee reported and that the Commerce Committee is now considering.
As the Commission has testified before, its support of a financial modernization bill was contingent on maintaining the "delicate balance inherent in [the House-passed version of] H.R. 10."3 Unfortunately, the version of H.R. 10 currently before the Commerce Committee no longer represents that balance. H.R. 10 now creates too many loopholes in securities regulation too many products are carved out, and too many activities are exempted. These loopholes would prevent the Commission from effectively monitoring and protecting U.S. markets and investors. Moreover, the scope of those loopholes, which are ambiguously drafted, may create even greater problems and uncertainties in the future. The Commission cannot ensure the integrity of U.S. markets if it is only able to supervise a portion of the participants in those markets. Neither can it ensure fair and orderly markets if market participants operate by different sets of rules and investors receive different levels of protection.
Although the Commission has a long list of concerns with the bill in its current form, we would like to limit ourselves at this times to pointing out a number of provisions contained in the House Banking Committee bill that are particularly troublesome for the Commission. These sections would severely impact the ability of the Commission to protect investors and the integrity of our markets. As discussed more fully in the Appendix to this testimony, the Commission is particularly concerned about issues that arise under the following sections of the bill:
- New/Hybrid Products The current provision would permit any bank to automatically stay Commission action (potentially for years) if the Commission determined, through rulemaking, that a new product was a security and warranted the protections of securities regulation.
- Derivatives The current provision exempting "any swap agreement" is so broadly drafted that it could include nearly all securities activities, including securities-based derivatives. It would also permit sales to any type of investor, regardless of the investor's financial sophistication, without securities sales practice regulation.
- Trust Activities While the Commission recognizes the importance of traditional bank trust activities, the current provision is so broadly drafted that bank trust departments could take a "salesman's stake" in securities transactions without complying with basic securities law protections.
- Private Placements The original private placement exception was designed for small banks without broker-dealer affiliates that conduct limited securities business. The current provision, however, would allow all but the very largest banks to conduct this business which is a very significant portion of the securities market outside of the Exchange Act regulatory scheme.
Perhaps it would be useful at this time to step back and outline the broader points the Commission feels should be addressed by any financial modernization bill. It is crucial that there be consistent regulation of securities activities engaged in by all types of entities. The Commission must retain supervisory and regulatory authority over the U.S. securities markets and continue to determine how securities activities are defined. Our markets are vibrant because they are fair, and because investors rely on the protections that are offered them under federal securities laws.
With that goal in mind, the Commission would like to work with the Commerce Committee and the Congress to include the following critical safeguards in any financial modernization legislation:
- Maintain aggressive SEC policing and oversight of all securities activities;
- Safeguard customers and markets by enabling the SEC to set net capital rules for all securities businesses;
- Protect investors by applying the SEC sales practice rules to all securities activities;
- Protect mutual fund investors with uniform adviser regulations and conflict-of-interest rules; and
- Enhance global competitiveness through broker-dealer holding companies.
These objectives are not novel; they have been central themes to all of the Commission's testimony to date. The Commission is eager to work with the Congress and the Commerce Committee to again achieve an appropriate balance in H.R. 10, without compromising these important principles.
II. Background on the Securities Activities of the Banking Industry
Before discussing the Commission's objectives in detail, I would like to summarize the key points that the Commission has consistently raised in considering Glass-Steagall reform.
The Commission has been the nation's primary securities regulator for 65 years. As such, it is the most experienced and best equipped to regulate securities activities, regardless of who conducts those activities. The Commission's statutory mandate focuses on investor protection, the maintenance of fair and orderly markets, and full disclosure. Moreover, securities regulation encourages innovation on the part of securities firms, subject to securities capital requirements that are tailored to support risk-taking activities. Significantly, securities regulation unlike banking regulation does not protect broker-dealers from failure. It relies on market discipline, rather than a federal safety net, with an additional capital cushion and customer segregation requirements to insulate customers and the markets from the losses of broker-dealer firms. Moreover, protection of customer funds has been further assured by the Securities Investor Protection Corporation ("SIPC").4
The Commerce Committee is well aware of the many securities activities in which the banking industry now engages. While these market developments have provided banks with greater flexibility and new areas for innovation, they have also left U.S. markets and investors potentially at risk. Because banks continue to have a blanket exemption from most federal securities laws, their securities activities have been governed in a hodge-podge manner by banking statutes and regulations that have not kept pace with market practices or needs for investor protection. As you know, banking regulation properly focuses on preserving the safety and soundness of banking institutions and their deposits, and preventing the failure of banks. But, because market integrity and investor protection are not principal concerns of banking regulation, the Commission believes that banking regulation is not an adequate substitute for securities regulation.
In order for banks to be fully liberated from the outdated Glass-Steagall Act restrictions on their ability to conduct securities activities, banks must be willing to take on the responsibility for full compliance with U.S. securities laws, with which all other securities market participants must comply. In terms of sound public policy, Congress should impose such full responsibility on banks.
III. Commission Objectives for Financial Modernization
I will now turn to a more detailed discussion of the fundamental securities principles that the Commission believes are necessary elements of a truly effective financial modernization bill.
A. Aggressive SEC Policing and Oversight of All Securities Activities
Public confidence in our securities markets hinges on their integrity. As the Supreme Court recently stated: "an animating purpose of the Exchange Act . . . [is] to insure honest securities markets and thereby promote investor confidence."5 The Commission has an active enforcement division, whose first priority is to investigate and prosecute securities fraud. The banking regulators, on the other hand, are required to focus their efforts on protecting the safety and soundness of banks, not considering the interests of defrauded investors. As a former Commission Chairman said in recent Congressional testimony, detecting securities fraud is a full-time job, and it is a far cry from formulating monetary policy.6
To continue its effective policing and oversight of the markets, the Commission must be able to monitor all securities activities through regular examinations and inspections, which includes access to all books and records involving securities activities. This is currently not the case. For example, during recent examinations of bank mutual funds, Commission examiners have had difficulty gaining access to key documents concerning the securities advisory activities of banks.7 The Commission cannot vigorously protect the integrity of U.S. markets and adequately protect investors with one hand tied behind its back.
B. SEC Financial Responsibility Rules for All Securities Businesses
Securities positions can be highly volatile. The Commission's capital requirements recognize this fact and are, with respect to protection from market risk, more rigorous than those imposed by bank regulators. Market exposures and volatility are risks that the net capital rule was designed to address, unlike bank capital requirements, which focus more on credit exposure. Thus, the Commission's net capital rule better protects the liquidity of any entity engaging in often volatile securities transactions.
In addition to promoting firm liquidity, the Commission's net capital rule is a critical tool to protect investors and securities markets because the Commission also uses the net capital rule to address abusive or problematic practices in the market. For example, with respect to penny stock market makers, the Commission can limit their activity by raising capital requirements for market-making activities. In addition, the Commission can expand on the margin rules with respect to particularly risky stocks by increasing capital charges. Finally, the net capital rule's 100-percent capital charge for illiquid securities serves to constrain the market for securities that have no liquidity or transparency. Without the ability to uniformly apply its net capital rule, the Commission's ability to oversee and influence U.S. securities markets is severely inhibited.
In addition to detailed net capital requirements that require broker-dealers to set aside additional capital for their securities positions, the Commission's customer segregation rule prohibits the commingling of customer assets with firm assets. Thus, customer funds and securities are segregated from firm assets and are well-insulated from any potential losses that may occur due to a broker-dealer's proprietary activities. Furthermore, federal securities law, unlike federal banking law, requires intermediaries to maintain a detailed stock record that tracks the location and status of any securities held on behalf of customers. For example, broker-dealers must "close for inventory" every quarter and count and verify the location of all securities positions. Because banks are not subject to such explicit requirements, the interests of customers in their securities positions may not be fully protected.
Because the Commission's financial responsibility requirements are so effective at insulating customers from the risk-taking activities of broker-dealers, the back-up protection provided by SIPC is seldomly used. Although there have been broker-dealer failures, there have been no significant draws on SIPC, and there have been no draws on public funds. In fact, because of the few number of draws on SIPC funds, SIPC has been able to satisfy the claims of broker-dealer customers solely from its interest earnings and has never had to use its member firm assessments to protect customers. This is in sharp contrast to the many, often extensive, draws on the bank insurance funds to protect depositors in failed banks.
We must continue to protect our markets from systemic risk by ensuring that there is enough capital to support the market risk that is inherent in securities transactions. In addition, we must ensure that customer funds and securities are fully protected by enforceable requirements to segregate customer assets from firm assets. To satisfy its quest for effective financial modernization, Congress should permit the Commission to set financial responsibility requirements for all securities activities, in order to better protect investors and U.S. markets.
C. SEC Sales Practice Rules Applied to All Securities Activities
All investors deserve the same protections regardless of where they choose to purchase their securities. Unfortunately, gaps in the current bifurcated regulatory scheme leave investors at risk. For example, broker-dealers are subject to a number of key enforceable requirements to which banks are not, including requirements to:
- recommend only suitable investments;
- arbitrate disputes with customers;
- ensure that only fully licensed and qualified personnel sell securities to customers;
- disclose to investors, through the NASD, the disciplinary history of employees; and
- adequately supervise all employees.8
Investors are generally not aware of these gaps in regulation and the risks that such gaps create.
In addition, federal banking statutes do not provide customers a private right of action for meritorious claims, and banking regulators do not routinely fully disclose the details of any and all enforcement and disciplinary actions against banks to put customers on alert. Although some customer protections have been suggested by the bank regulators, they are less comprehensive than the federal securities laws and serve to perpetuate the disparities between the bank and securities regulatory schemes.9
Some have suggested a system of parallel securities regulation by the banking regulators. However, the Commission notes that the 12(i) model for regulation of bank issuer reporting has not achieved the objectives of the federal securities laws and, in fact, the Treasury Department's 1997 financial modernization proposal suggested eliminating section 12(i). Under section 12(i) of the Securities Exchange Act,10 banking regulators are required to adopt rules "substantially similar" to the Commission's rules within 60 days after the Commission's publication of its final rules. Notably, one commentator has stated that "final action by the [banking] regulators in promulgating substantially similar' 1934 Act rules has been delayed in some cases over five years after pertinent SEC amendments have been issued."11 In addition, the 12(i) model perpetuates a complex scheme of disparate rules offering different protections for investors and markets and different levels of enforcement efforts.
I would like to briefly discuss two recent Commission enforcement actions that highlight the need for more universal application of strict sales practices rules to all entities engaged in securities activities.
In the first case, the Commission is alleging that the portfolio manager of two money market mutual funds sponsored by a bank (i) caused the funds to purchase volatile derivative instruments, (ii) fraudulently transferred the derivatives at inflated values between the mutual funds to some of the bank's various trust accounts to cover up the mutual funds' losses, and (iii) ultimately caused the funds to "break the buck." The Commission investigated and has initiated enforcement action against the mutual funds' portfolio manager.12 However, because of the current bank exemptions from federal securities law, the Commission was unable to bring charges against the bank or its personnel for failing to adequately supervise the fund manager. Under these facts, the Commission ordinarily would have brought charges against any of its regulated entities for similar misconduct, and the Commission considers its ability to bring "failure to supervise" claims to be critical to investor protection. Securities fraud of this type where transactions occur both in mutual funds and in bank trust accounts illustrates the need for securities regulators to have access to books and records involving all securities activities conducted by banks.
In the second case, employees of a bank and its broker-dealer subsidiary blurred the distinction between the two entities and their respective products during sales presentations to customers and in marketing materials.13 In addition, the broker-dealer's employees mischaracterized certain products as conservative investments when, in fact, they were highly leveraged funds that invested in interest-rate-sensitive derivatives. These actions resulted in customers, many of whom were elderly and thought they were purchasing investments in stable government bond funds, making unsuitable purchases of high-risk funds. The case is also evidence of how difficult it is to protect investors when securities regulation is split between exempted banks and their related securities firms. When there are multiple regulators with different goals, the regulatory environment can be easily muddled, leaving investors at risk.
The Commission believes that the protections provided by the high, uniform standard of the federal securities laws should benefit all investors purchasing securities.
D. Uniform Mutual Fund Adviser Regulation and Conflict-of-Interest Rules
Mutual fund investors should always receive the protection of the federal securities laws. Accordingly, all parties that provide investment advice to mutual funds should be subject to the same oversight, including Commission inspections and examinations. In addition, any type of entity that is affiliated with a mutual fund should be subject to the strict conflict-of-interest provisions of the federal securities laws. For these reasons, the Commission supports provisions that would address the increasing involvement of banks in the mutual fund business and reduce potential conflicts of interest. Fortunately, the House Banking Committee version of H.R. 10 contains the same important mutual fund provisions that we supported in the House-passed version of H.R. 10.
Banks that act as investment advisers currently enjoy an exemption from the registration and other requirements of the Investment Advisers Act of 1940. As a result, bank investment advisers are not subject to the substantive requirements applicable to registered investment advisers, including: (i) regulation of advertising, solicitation, and receipt of performance fees; (ii) establishing procedures to prevent misuse of non-public information; (iii) books and records and employee supervision requirements; (iv) the general anti-fraud provisions; and (v) statutory disqualification from performing certain services for a mutual fund if the adviser violates the law. All but (v), which came to our attention in a recent matter, are already included in the bill before the Commerce Committee.
In addition, as banks increasingly advise mutual funds, the Commission grows more concerned that its examiners do not have ready access to information regarding bank advisory activities that could affect bank-advised mutual funds. Such access is necessary in order to detect front-running, abusive trading by portfolio managers, and conflicts of interest (involving, for example, soft-dollar arrangements, allocation of orders, and personal securities transactions by fund managers). As part of its review for conflicts of interest with respect to a bank mutual fund adviser's activities, Commission examiners must be able to compare trading activity in a mutual fund portfolio to that in the bank's trust accounts. As discussed above, the Commission has had difficulty obtaining full access to all relevant information when reviewing the securities activities of banks that advise mutual funds.14 The Commission must be able to review records relating to all securities activities relating to mutual fund advisers, just as it does for all other non-bank fund advisers.
The Commission is also concerned about the unique conflicts of interest resulting from increased bank involvement in the mutual fund business. Currently, the Investment Company Act of 1940 places restrictions on certain transactions between investment companies and their affiliates. These restrictions were crafted, however, at a time when Congress could not have anticipated the dramatic change in the scope of bank securities activities. Specifically, the Commission is concerned about conflicts of interest that may arise from:
- bank lending to affiliated mutual funds, possibly on unfavorable terms, to the detriment of fund investors;
- bank holding company personnel serving on the boards of directors of affiliated mutual funds;
- personnel of an entity that lends to, or distributes shares of, a mutual fund also serving on the fund's board; and
- bank trust departments that hold shares in an affiliated mutual fund in a trustee or fiduciary capacity and that have the power to vote such shares.
Legislation that targets such conflicts of interest is necessary. Banks that lend to, advise, and/or sell mutual funds should be subject to rules governing conflicts of interest that arise when banks act in multiple capacities. The Commission supports the provisions of H.R. 10 that address these conflicts of interest.
Finally, the Commission advocates adding a new section to H.R. 10 in order to protect mutual fund investors from banks that engage in misconduct. Currently, the Investment Company Act statutorily disqualifies certain types of entities (such as brokers, dealers, advisers, and transfer agents) and employees of such entities (including employees of banks) who have been convicted of a felony or are subject to a civil injunction. However, the Investment Company Act does not contain a similar statutory disqualification that would apply to a bank (the entity itself, as opposed to its employees) that had engaged in wrongdoing. In order to ensure that the protections of the Investment Company Act extend to investors in bank-advised mutual funds, the statutory disqualification provisions of the Act should be amended to include banks.
E. Broker-Dealer Holding Companies
In order to expand overseas, U.S. broker-dealer firms generally must demonstrate to foreign regulators that they are subject to comprehensive supervision on a worldwide basis. Thus, the Commission strongly supports the ability of U.S. broker-dealers to voluntarily subject their activities to Commission supervision on a holding company basis. The Commission's "umbrella" oversight would be based on a risk-supervision model that more appropriately reflects the predominant risk-taking securities activities of the consolidated entity. Of course, any regulated subsidiaries of a broker-dealer holding company would continue to be regulated by the appropriate statutory regulator.
The Commission believes that a supervisory framework for holding companies substantially engaged in securities activities would permit securities firms the flexibility to innovate and keep pace with the rapid changes in today's capital markets. This structure would impose risk-based supervision, consistent with the firm's principal business, and would help protect market integrity by ensuring that there are no supervisory gaps. Notably, the Commerce Committee markup of H.R. 10 in October 1997 also contained a provision allowing for broker-dealer holding companies that include a wholesale financial institution ("WFI") but that are primarily engaged in the securities business. The Commission strongly supports these provisions, which also enjoy the backing of Chairman Greenspan.15
The Commission has testified many times during the past decade in support of financial modernization.16 However, H.R. 10 as currently drafted provides for a labyrinth of complicated, technical exemptions from federal securities law regulation the loopholes in the regulatory scheme are now larger than the scheme itself; this could dramatically undermine market integrity. Furthermore, as a practical matter, H.R. 10's securities exemptions have become so complex that it would be a "compliance nightmare" for banks to implement and for the Commission to monitor.
In the debates surrounding this issue, the Commission's primary concerns have been the protection of the integrity of U.S. markets and those who invest in them. Unfortunately, H.R. 10 as reported by the Banking Committee would prevent the Commission from effectively carrying out its statutory mandates, and the Commission is therefore strongly opposed to this bill. However, the Commission supports the effort to advance this process and is eager to continue to work with the Commerce Committee and the Congress on these issues.
The Commission encourages all involved to step back and look at the securities issues arising out of financial modernization and the complexity of the current rigid structure. We must not lose sight of basic securities law protections and goals, which have served to ensure that the U.S. markets are the fairest, safest, most vibrant, most transparent, and most liquid markets in the world.
As it has stated in its principles, the Commission believes that it may be time to rethink the approach to the functional regulation provisions of financial modernization legislation. They have become too complicated and may not be flexible enough to deal with developments over time. Rather than an inflexible laundry list of complex exceptions and loopholes, the Commission suggests we consider deleting many, if not all, of the exceptions and instead adopt exemptive rules in areas of traditional bank securities activities, an approach that would pose fewer investor protection and market integrity concerns.
We thank you for offering the Commission the opportunity to appear here today. I would be happy to answer questions that you may have.
1 As of December 1998, mutual fund assets totaled $5.5 trillion. Investment Company Institute, Trends in Mutual Fund Investing: December 1998 (Jan. 28, 1999).
2 In 1998, businesses raised a record $1.8 trillion from investors, $1.31 trillion in 1997, and $967 billion in 1996. (These figures include firm commitment public offerings and private placements and do not include best efforts underwritings.) Securities Data Corporation.
3 Testimony of Arthur Levitt, Chairman, U.S. Securities and Exchange Commission, Concerning H.R. 10, the "Financial Services Act of 1998," Before the Senate Comm. on Banking, Housing, and Urban Affairs (June 25, 1998), at 2.
4 SIPC is a non-profit membership corporation created by the Securities Investor Protection Act of 1970. SIPC membership is required of nearly all registered broker-dealers, and SIPC is funded by annual assessments on its members. If a broker-dealer were to fail and have insufficient assets to satisfy the claims of its customers, SIPC funds would be used to pay the broker-dealer's customers (up to $100,000 in cash, and $500,000 in total claims, per customer).
5 United States v. O'Hagan , 521 U.S. 642, 117 S.Ct. 2199, 2210 (1997).
6 See Testimony of Richard C. Breeden, President, Richard C. Breeden & Co., Before the Subcomm. on Finance and Hazardous Materials, House Comm. on Commerce (May 14, 1997).
7 The Commission and the federal bank regulatory agencies have worked to enhance coordination of their examination and inspection programs. See Testimony of Lori Richards, Director, Office of Compliance Inspections and Examinations, U.S. Securities and Exchange Commission, Concerning the Securities and Exchange Commission's Examination Oversight of Securities Firms Affiliated with Banks, Before the Subcomm. on Financial Institutions and Consumer Credit, House Comm. on Banking and Financial Services (Oct. 8, 1997). Despite these initiatives, however, the Commission continues to have difficulty obtaining access to all appropriate books and records.
8 The federal bank regulatory agencies have issued guidelines that address some bank sales practice issues. See Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, and Office of Thrift Supervision, "Interagency Statement on Retail Sales of Nondeposit Investment Products" (Feb. 15, 1994). These guidelines are advisory and therefore not legally binding, and they may not be legally enforceable by bank regulators.
9 H.R. 10 does contain a provision (section 204) that requires each banking agency to adopt sales practice rules. These rules would not be as extensive as securities sales practice rules, and in some cases may vary from Commission rules. Moreover, section 204 states that the banking agency rules could apply to registered broker-dealer subsidiaries or affiliates of banks, which would create regulatory overlap and confusion. The Commission strongly objects to this approach.
10 15 U.S.C. 78l(i).
11 Michael P. Malloy, The 12(i)'ed Monster: Administration of the Securities Exchange Act of 1934 by the Federal Bank Regulatory Agencies , 19 Hofstra L. Rev. 269, 285 (1990).
12 See In the Matter of Michael P. Traba , File No. 3-9788, Release No. 33-7617 (Dec. 10, 1998).
13 In the Matter of NationsSecurities and NationsBank, N.A. , Release No. 33-7532 (May 4, 1998).
14 See note 7 and accompanying text above.
15 In response to a question posed to Alan Greenspan during the April 28, 1999 hearing of the House Commerce Subcommittee on Finance and Hazardous Materials on the subject of financial modernization, Chairman Greenspan indicated his support for Commission-supervised broker-dealer holding companies.
16 See , e.g. , Testimony of Arthur Levitt, Chairman, U.S. Securities and Exchange Committee, Concerning Financial Modernization Legislation Before the Senate Comm. on Banking, Housing, and Urban Affairs (Feb. 24, 1999); Testimony of Harvey J. Goldschmid, General Counsel, U.S. Securities and Exchange Commission, Concerning H.R. 10, The "Financial Services Act of 1999" Before the House Comm. on Banking and Financial Services (Feb. 12, 1999); Testimony of Arthur Levitt, Chairman, U.S. Securities and Exchange Commission, Concerning H.R. 10, The "Financial Services Act of 1998," Before the Senate Comm. on Banking, Housing, and Urban Affairs (June 25, 1998); Testimony of Arthur Levitt, Chairman, U.S. Securities and Exchange Commission, Concerning Financial Modernization and H.R. 10, the "Financial Services Competition Act of 1997," Before the Subcomm. on Finance and Hazardous Materials of the House Comm. on Commerce (July 17, 1997); Testimony of Arthur Levitt, Chairman, U.S. Securities and Exchange Commission, Concerning Financial Modernization, Before House Comm. on Banking and Financial Services (May 22, 1997); Testimony of Arthur Levitt, Chairman, U.S. Securities and Exchange Commission, Regarding H.R. 1062, the "Financial Services Competitiveness Act of 1995," Before the Subcomm. on Telecommunications and Finance and the Subcomm. on Commerce, Trade and Hazardous Materials of the House Comm. on Commerce (June 6, 1995); Testimony of Arthur Levitt, Chairman, U.S. Securities and Exchange Commission, Concerning the "Financial Services Competitiveness Act of 1995" and Related Issues, Before the House Comm. on Banking and Financial Services (Mar. 15, 1995); Testimony of Arthur Levitt, Chairman, U.S. Securities and Exchange Commission, Concerning H.R. 3447 and Related Functional Regulation Issues, Before the Subcomm. on Telecommunications and Finance of the House Comm. on Energy and Commerce (Apr. 14, 1994); Testimony of Richard C. Breeden, Chairman, U.S. Securities and Exchange Commission, Concerning Financial Services Modernization, Before the Subcomm. on Telecommunications and Finance of the House Comm. on Energy and Commerce (July 11, 1990); Memorandum of the Securities and Exchange Commission (under Chairman David Ruder) to the Subcomm. on Telecommunications and Finance of the House Comm. on Energy and Commerce, Concerning Financial Services Deregulation and Repeal of the Glass-Steagall Act (Apr. 11, 1988); Testimony of David S. Ruder, Chairman, U.S. Securities and Exchange Commission, Concerning the Structure and Regulation of the Financial Services Industry, Before the Subcomm. on Telecommunications and Finance of the House Comm. on Energy and Commerce (Oct. 5, 1987).