By Sarah N. Lynch
WASHINGTON Jan 16 There is not enough support
among top U.S. Securities and Exchange Commission officials to
advance a proposal that would require companies to disclose
their political spending, a Republican commissioner said on
Daniel Gallagher said the agency had other priorities, and
said the two Republican commissioners would not back such a
With the SEC currently divided between two Democrats and two
Republicans, the lack of support effectively kills for now the
measure which has been pushed by disclosure activists.
"That should not be one of our priorities," Gallagher told
the U.S. Chamber of Commerce. "That is just a political wish
In his first public speech of 2013, Gallagher said he sees
other issues as more important, including money-market fund
reforms, Dodd-Frank Act rules, and capital-raising regulations
required by the 2012 Jumpstart our Business Startups, or JOBS,
Gallagher's comments will be a blow to supporters of
political spending disclosure, who had been heartened by a
federal notice in December saying a rule was under
The call by some for more disclosure on campaign spending
comes after the Supreme Court's "Citizens United" ruling in 2010
that found independent expenditures by corporations are
That decision paved the way for a dramatic increase in
political action committees known as Super PACs, which played a
major role in the 2012 presidential campaign.
ALL EYES ON MONEY FUNDS
While Gallagher was not enthused about the idea of a
political spending disclosure rule, he was more optimistic on a
proposal to reduce the risk of runs on money market funds.
Former SEC Chairman Mary Schapiro last year had sought to
propose a series of potential reforms. But she could not muster
the votes from Gallagher, his fellow Republican commissioner
Troy Paredes, or Democratic commissioner Luis Aguilar.
She also faced staunch opposition from the $2.6 trillion
Schapiro said more reforms were needed to prevent a repeat
of the Reserve Primary Fund incident during the financial
crisis. Heavy exposure to collapsed investment bank Lehman
Brothers caused the net asset value (NAV) of the Reserve Primary
Fund, a large money market fund, to fall below $1 per share, or
"break the buck" in industry parlance.
That had a ripple effect that destabilized global markets.
Schapiro, who retired in December, had suggested capital
buffers coupled with redemption hold-backs. Another option
involved moving from a stable $1 per share net asset value to a
floating NAV, so that investors would not get spooked by the
prospect of funds breaking the buck.
After the SEC hit a stalemate, the newly created Financial
Stability Oversight Council stepped in late last year and issued
a similar proposal in an attempt to pressure the SEC to act.
Gallagher has previously said he could be open to the idea
of floating the NAV, as long as the tax and accounting issues
were properly addressed.
On Wednesday, he told the Chamber he is optimistic the tax
and accounting issues can be resolved, saying the SEC has
authority over accounting standards and hopefully can "figure
something out there."
(To watch Gallagher's remarks, go to)
VOLCKER RULE, SWAPS
Gallagher on Wednesday also blasted the proposed Volcker
rule, a Dodd-Frank requirement that would ban banks from
He said the rule, which was jointly proposed by the SEC and
banking regulators, needs to be scrapped and re-drafted. He also
lamented that the SEC is "playing second fiddle" to the banking
regulators in how it is crafted.
The SEC has been far behind in completing many of the rules
required by the Dodd-Frank Wall Street oversight law to regulate
the roughly $640 trillion over-the-counter derivatives market.
However, Gallagher told reporters on the sidelines of the
event that a critical proposal on how derivatives regulations
will be applied overseas could be unveiled as early as next