TO ASCERTAIN THE VIEWS OF HAMER H. BUDGE, S-YAM -A COMMITTEE ON BANKING AND CURRENCY JOHN SPARKMAN, Alabama, Chairman WILLIAM PROXMIRE, Wisconsin WALLACE F. BENNETT, Utah EDMUND S. MUSKIE, Maine EDWARD W. BROOKE, Massachusetts HARRISON A. WILLIAMS, JR., New Jersey JOHN G. TOWER, Texas Administration of Public Law 90-439_. Back office problems and the small investor_- PROBLEMS IN THE SECURITIES INDUSTRY THURSDAY, MARCH 6, 1969 U.S. SENATE, COMMITTEE ON BANKING AND CURRENCY, SUBCOMMITTEE ON SECURITIES, Washington, D.C. The subcommittee met at 10:15 a.m., in room 5302, New Senate Office Building, Senator Harrison A. Williams, Jr., presiding. Present: Senators Sparkman, Williams, McIntyre, Cranston, Bennett, Brooke, and Packwood. Senator WILLIAMS. We certainly welcome the new Chairman of the Securities and Exchange Commission to this meeting of the Subcommittee on Securities of the Senate Banking and Currency Committee. This is not a confirmation hearing but a hearing which will allow the members of this committee to meet and become acquainted with the new Chairman of the SEC. Mr. Budge-the new Chairman of the SEC has been kind enough to voluntarily appear before our subcommittee and talk over some of the aspects of his new responsibilities. Over the past 5 years, the Securities and Exchange Commission has initiated new and innovative steps designed to provide improved investor protection. Mutual fund reform legislation, the regulation of insider trading, full disclosure in corporate takeover bids, volume discounts and elimination of customer directed giveups are but a few of the Commission's constructive actions. Regretfully, however, as soon as tentative solutions to one set of problems are found, new and more serious problems arise. This is due in great measure to the rapid growth and trading activity which is now taking place in our Nation's securities markets. The back office paperwork logjam has resulted in hardships to many small investors-some of whom are unable to find brokers willing to execute their orders. Surely such a situation cannot and should not be tolerated. The recent rapid growth of conglomerate corporations makes it imperative for the SEC to implement regulations requiring divisionby-division financial reporting. Such measures will go a long way toward providing full and complete financial disclosure for all investors. If we can get a man to the moon by 1969, we can certainly devise methods to provide for full disclosure in conglomerate reporting. The growth of institutional investors such as mutual funds and insurance companies is to a point where they now account for 50 percent of the New York Stock Exchange's total volume. (1) |