At the Bell
Bill introduced to cut SEC fees * Sens. Phil Gramm, the Texas Republican who heads the Banking Committee,…
Bill introduced
to cut SEC fees
* Sens. Phil Gramm, the Texas Republican who heads the Banking Committee, and Charles Schumer, D-N.Y., introduced legislation last week to reduce fees on securities registrations and transactions. More than $2 billion was charged for securities transactions last year, when the Securities and Exchange Commission’s budget was only $370 million.
The bill also would raise the pay of the SEC staff to the salary levels at comparable federal financial regulatory agencies. SEC lawyers currently are paid less than banking regulatory lawyers, and many have been leaving the agency.
House committees
redraw boundaries
* The House Energy and Commerce Committee will keep some authority over electronic communications networks and the Financial Accounting Standards Board under an agreement made public last week.
The jurisdictional boundaries settle a turf dispute between the committee’s chairman, Rep. Billy Tauzin, R-La., and Rep. Michael Oxley, R-Ohio, head of the Financial Services Committee.
The agreement leaves a lot of room for future tussles. Mr. Oxley’s committee will largely oversee ECNs, which are online matchmakers for buyers and sellers of securities. But Mr. Tauzin would get dibs on legislation affecting ECNs when it comes to broad electronic commerce issues.
As for the standards board, jurisdiction lines also appear unclear. The agreement gives Energy jurisdiction over the “setting of accounting standards” but says Financial Services’ oversight of securities and exchanges “includes anti-fraud authorities under the securities laws,” such as the Norwalk, Conn.-based board.
Stilwell to buy
Janus shares
* Stilwell Financial Inc., which manages the Janus group of mutual funds, intends to buy 600,000 shares of Janus Capital Corp. from Thomas Bailey, Janus’ chairman. This raises Stilwell’s stake in Janus to 88.7%.
Blair Johnson, a spokesman for Denver-based Janus, says the transaction is part of 63-year-old Mr. Bailey’s personal estate planning, and it does not signal any intention to leave the company, which he founded in 1969.
Upon completion of the deal next month, Mr. Bailey will own about 6% of Janus. Stilwell intends to use the additional shares to attract managerial talent and provide greater incentives for key current personnel.
SEC: Online brokers
must disclose risks
* Online brokerage firms need to give customers clearer information about the risks of systems outages or slowdowns, the Securities and Exchange Commission said last week in a report.
The report noted that the SEC has received many complaints by online customers about their inability to execute transactions in a timely manner, and said that most online brokers gave disclaimers only of legal liability in the event of failures with their new account agreements.
An estimated 7.8 million people are trading online with 200 brokerage firms.
Many online customers are new to the markets, the SEC said, and online companies also should provide clear explanations of trading terms, such as the difference between market and limit orders.
Among other persistent complaints were duplicate orders that were placed inadvertently by customers when the first trade was delayed, resulting in unintended short sales or more buying than they could afford.
The SEC suggested brokerage houses take steps to prevent those duplicate orders.
About one-third of the online brokers examined did not provide any information about risky margin trading, the SEC found.
An adviser site
gets financing
* EAInvest.com, a soon-to-be introduced online financial services company designed for financial advisers, has secured $8.3 million in first-round financing from Ironweed Capital, a venture capital company in Palo Alto, Calif.
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