The U.S. Treasury Department is fighting back against claims from Republican congressmen that it failed to heed the SEC’s input in issuing a report critical of the asset management industry.
In a letter revealed publicly today, the Treasury Dept flatly rejects claims by Republican representatives that a research report pointing out risks in the asset management industry did not include feedback from the Securities and Exchange Commission.
The Treasury wrote a detailed 11-page letter in reply to questions and concerns from Republican Congressman Darrell Issa, which was reviewed by Reuters. In the letter, the Treasury reaffirmed that its independent research office “engaged extensively” with the SEC on a variety of issues before publishing the study in September 2013.
Report called large firms systemic risks
The Treasury report released back in September of last year argued for designating large asset management firms as “systemic risks“. Critics of the report point out that this recommendation was not considered necessary by the SEC, and the systemic risk designation was really no more than an excuse to try and burden the industry with more regulation.
“In addition to written comments, there were at least 13 telephonic and in-person meetings,” wrote Alastair Fitzpayne, an assistant secretary for legislative affairs at Treasury in the letter. “Throughout this collaborative, eight-month process, the study was refined, resulting in a stronger, clearer, more concise draft.”
In addition to reaffirming that OFR and SEC worked closely together on the report, the Treasury’s letter also refuted criticism that the asset management study was written to justify imposing additional regulation on firms.
Report “paid lip service” to SEC
According to documents obtained by the House of Representatives’ oversight committee, the SEC and the OFR had major disagreements about the report, and the SEC was lobbying for major changes before the study’s release.
Issa and fellow Republican Congressman Jim Jordan of Ohio co-wrote a letter to Treasury Secretary Jack Lew in March, wanting to know why the OFR “paid lip service” to the SEC suggestions regarding revising the report.