Hal S. Scott Testifies Before the Senate Banking Committee on the Treasury/Federal Reserve Main Street Lending Program

Written testimony of Hal S. Scott, Emeritus Professor, Harvard Law School; President of the Committee on Capital Markets Regulation, before the Committee on Banking, Housing and Urban Affairs, United States Senate. “Thank you, Chairman Crapo, Ranking Member Brown, and members of this Committee for inviting me to testify before you today on the Treasury/Federal Reserve […]

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Making Main Street Work

The Committee on Capital Markets Regulation (the “Committee”) believes that small and medium sized businesses (“SMEs”) will need continued financial support for a prolonged period to recover from the impact of the COVID-19 pandemic. A key part of this support should come from the Treasury-Federal Reserve’s Main Street Lending Program (“MSLP”) authorized by the Coronavirus […]

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The Impact of Private Equity Buyouts on Productivity and Jobs

Over the past two decades, the role of private equity in the real economy has dramatically increased. For example, private equity-backed U.S. companies numbered approximately 4,000 in 2006, but by 2018, that figure had doubled to about 8,000. Meanwhile, the number of publicly traded firms in the United States fell by 14 percent, from 5,113 […]

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The Rising Cost of Exchange Market Data Services

On July 30, 2020, the Committee released an updated statement expressing concern that U.S. stock exchanges are charging excessive fees for core market data services that are unnecessarily increasing the cost of trading stocks for U.S. investors. The Committee statement again examines the revenues that BATS, NASDAQ and NYSE report from all market data services […]

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Reforming U.S. Capital Markets to Promote Economic Growth

Vibrant and well-functioning U.S. capital markets create jobs, bolster investment, promote innovation, and enhance retirement savings. Capital markets function best when regulations allow for the efficient allocation of capital while protecting investors. In this report, we evaluate major trends and developments in U.S. capital markets and assess whether existing regulations are continuing to serve U.S. […]

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An Analysis of Investment Stewardship: Mutual Funds and ETFs

Investment stewardship refers to shareholder engagement with public companies, including voting and other direct communications between investors and public companies. This report focuses on investment stewardship by investment advisers on behalf of mutual funds and ETFs with a focus on index funds. We begin by reviewing the existing regulatory requirements and the voluntary investment stewardship […]

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The Rise of Index Investing: Price Efficiency and Financial Stability

Index investing is based upon a set of predefined, mechanical rules for choosing a publicly known set of stocks. The strategy of index investors is to gain exposure to the performance of the market as a whole or a particular segment of the market. Given its mechanical, rules-based nature, index investing does not require investment […]

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Wall Street Journal Op-Ed: Who’s Looking Out for Main Street? Treasury and the Fed seem more concerned about not losing money than getting relief to small businesses.

Originally Appeared in the Wall Street Journal Small and midsize businesses have been hit hard by the pandemic, but they aren’t getting the help they need. Why, when the Cares Act provides direct assistance to the Treasury to assist these firms? Congress now has a chance to get to the bottom of it. On Tuesday […]

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Committee Submits Comment Letter on SEC’s Market Data Infrastructure Proposal

On April 23, the Committee submitted a comment letter to the Securities and Exchange Commission (the “SEC”) regarding its proposal to introduce competition among providers of consolidated equity market data for national market system stocks (the “Competition Proposal”). The Committee supports the Competition Proposal, because we believe it will improve the quality and decrease the […]

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Committee Submits Comment Letter on IEX Proposal to Add a New Discretionary Limit Order Type

On April 23, the Committee submitted a comment letter to the Securities and Exchange Commission (the “SEC”) regarding a proposed rule change by the Investors Exchange LLC (“IEX”). IEX’s proposal would create “discretionary limit orders” that are effectively exempt from its existing speed bump.  It would thereby potentially establish an asymmetric speed bump. The Committee […]

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