House Passes Securities Technical Corrections Legislation

By a voice vote, the House has passed legislation making technical corrections to the federal securities laws and conforming amendments related to the repeal of the Public Utility Holding Company Act. The Securities Law Technical Corrections Act of 2009, HR 2947, is nearly identical to a bill, HR 3505, that passed the House during the 110th Congress. That earlier bill died in the Senate. The SEC supports the legislation.

The legislation would effectively exclude companies that were subject to regulation under the Public Utility Holding Company Act, which was repealed in 2005, from the definition of investment company. Congress repealed the Public Utility Holding Company Act by attaching the repeal provisions to the Energy Policy Act of 2005. The repeal of PUHCA took effective six months after enactment of the Energy Policy Act. The Act transferred authority over public utility holding companies from the SEC to the Federal Energy Regulatory Commission and various state agencies.

HR 2947 also makes about 50 necessary technical corrections to the federal securities laws, including punctuation errors, spelling inaccuracies, and references to statutes which Congress previously repealed. The technical corrections are to the Securities Act, the Exchange Act, the Trust Indenture Act, the Investment Company Act, and the Investment Advisers Act.

The legislation is part of Congress’ responsibility to review laws that it passes to ensure that they are current. Most importantly, Congress needs to clarify that these laws are well-crafted so that agencies such as the SEC that administer and enforce them are able to do so without causing unnecessary confusion to investors, to market participants and the courts.

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