August 11, 2010 / 2:56 PM / 9 years ago

CORRECTED - US lawmaker seeks repeal of SEC privacy provision

(Corrects to Fox Business Network from Fox Business News in paragraph 7 and congressman name to Towns in bullet point)

* House Oversight Chair Towns proposed legislation

* Frank says legislation may be “broader” than intended

* Follows legislation introduced in Senate

WASHINGTON, Aug 10 (Reuters) - A top Democratic lawmaker on Tuesday proposed to take back disclosure exemptions granted to U.S. securities regulators in new financial reform legislation.

Edolphus Towns, a New York Democrat who chairs the House Oversight and Governance Reform Committee, introduced a bill that would eliminate enhanced privacy measures for the Securities and Exchange Commission included in the Dodd-Frank Act.

His support for such an action adds momentum to a similar measure already introduced in the Senate.

The Dodd-Frank Act, which was signed into law last month, gave the SEC explicit exemptions from having to comply with some Freedom of Information Act requests from press and the public.

The exemption has drawn criticism from some lawmakers, who argue it will shield the SEC from having to be transparent about its dealings with financial companies.

The House Financial Services Committee will hold a hearing in September on the extent to which the legislation exempts the SEC from complying with FOIA requests.

House Financial Services Committee Chairman Barney Frank told Fox Business Network on Tuesday that “the language appeared to be, when you looked at it carefully, broader than it was intended to be.”

A bipartisan group of four senators introduced legislation on Aug. 5 to repeal the SEC exemption. The ranking Republican member of the House Oversight Committee, Darrell Issa, introduced similar legislation on July 29.

The SEC was granted greater assessment and surveillance responsibilities as part of the Dodd-Frank Act.

Lawmakers also gave the SEC a privacy mandate similar to that enjoyed by bank regulators, who do not have to disclose the results of examinations of specific companies.

SEC Chairman Mary Schapiro has told Frank that the new law “does not provide a blanket SEC exemption from FOIA and is not designed to protect the SEC as an agency from public oversight and accountability.”

She called assertions that the law exempts the SEC from complying with the Freedom of Information Act false.

The Dodd-Frank Act says the SEC does not have to disclose any records related to “surveillance, risk assessments, or other regulatory and oversight activities.” Previous laws exempted the SEC from disclosing “internal compliance or audit records.” (Reporting by Emma Ashburn; Editing by Steve Orlofsky)

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