Former three-term Republican U.S. Senator Judd Gregg, the Securities Industry and Financial Markets Association’s new chief executive officer, said Monday that he wants to improve the image of the industry and make sure Dodd-Frank rules are focused and not overly burdensome.
Gregg and Ken Bentsen, who has become SIFMA president, said that tax reform is “very much in the embryonic stages” and that they do not think it will be pushed forward on the agenda because of the current controversy over the Internal Revenue Service targeting right wing groups for queries about tax-exempt status.
“This is going to be extremely fluid for the next six to eight months,” Gregg said about tax reform, noting that House and Senate tax-writing committee chairmen Max Baucus, D-Mont., and Dave Camp, R-Mich., are both committed to moving a major tax reform package.
“In the end if we get a tax law, which causes people to invest for the purposes of returns rather than for the purpose of avoiding taxes, it will be good for the county and good for the industry,” Gregg said.
“We would like to see a more efficient tax system, particularly on the corporate side, but also on the individual side,” said Bentsen. SIFMA is on record as supporting maintaining the tax-exempt status of municipal bonds. The group also opposes President Obama’s proposal to cap the value of tax exemption at 28% “because we believe that would be retroactive and punish existing bondholders [as well as] add a premium to issuers on an ongoing basis,” he said.
Gregg said the nation is “on the verge of a massive economic expansion” and that he believes there will be more and more pressure to replace the sequester with tax reform and entitlement reform.
Formerly governor of New Hampshire and a four-term member of the U.S. House of Representatives, Gregg served on the National Commission on Fiscal Responsibility and currently co-chairs the bipartisan Campaign to Fix the Debt group.
In the Senate, he was the top Democrat on the Budget Committee and was a conferee negotiator of the final version of the Dodd-Frank Act. He told reporters Monday during a conference call that the act was hastily drafted, is “very complex” and contains “philosophical and academic ideas” that “weren’t really flushed out” and threaten to have “unintended consequences.”
SIFMA is lobbying to make sure that muni rules to be implemented under Dodd-Frank do not cause underwriters and other muni market participants already regulated to also become regulated as municipal advisors who are subject to a fiduciary duty to put issuer clients’ interests first.
Gregg said regulators have been given a “difficult task by Dodd-Frank.”
He said SIFMA wants to be an “asset” and “constructive force at the table” in advising the SEC and other regulators, as well as lawmakers, on Dodd-Frank issues.
“In the end I believe we’ll get it right,” he said. “We’ll make sure that too-big-to-fail does become the law of the land and that taxpayers’ dollars aren’t put at risk for private activity. But we’ll also make sure that we have the best and most competitive capital markets in the world and that’s what our goal is.”
Asked if SIFMA members aren’t seen as a liability in this post-financial crisis period, Gregg said no, “they are a huge positive force on Main Street for creating jobs” and “are obviously a highly-regulated industry.”
He said he wants to re-orient the image of SIFMA members, which includes almost 600 broker-dealers, asset managers and others that represent both the buy and the sell side, to show they “really supply the capital that makes it possible for Americans to be prosperous.”
Gregg also said he “made a mistake” agreeing to be President Obama’s nominee for head of the Commerce Dept. and withdrew his name once he realized he could not support Obama’s stimulus proposals.