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> Please, let's talk about the actual bill. It's at http://banking.senate.gov/public/_files/AYO09D44_xml.pdf http://banking.senate.gov/public/_files/AYO09D44_xm

by anamax 17y ago

> Please, let's talk about the actual bill. It's at http://banking.senate.gov/public/_files/AYO09D44_xml.pdf http://banking.senate.gov/public/_files/AYO09D44_xml.pdf and the relevant regulation is in Sec. 412. Yes, let's do that. > It says that the Securities & exchance commission should raise the threshold, using its existing authority, as the Commission determines is appropriate and in the public interest, in light of price inflation since those figures were determined; Actually, it says "shall". Should is a request. Shall is a mandate. There's some wiggle room in "determines is appropriate and in the public interest" but the marching orders are pretty clear. Do you really think that they're going to come in significantly lower than where the inflation numbers come out? I'm serious - the inflation numbers give us $2.3M. What's your "I was wrong" number? Is it anything over $2M? How about $1.5M? Note that Section 412 has two parts. The second "(2) adjust that threshold not less frequently than once every 5 years, to reflect the percentage in crease in the cost of living." doesn't have any discretion.

hristov 17y ago
There are no requirements that the increase follow inflation numbers. It only says that the SEC should increase the rates as "the Commission determines is appropriate and in the public interest, in light of price inflation." I guarantee you the SEC will not double the standards over night. They will have a long rule making session will ask for comments from the public as they are required, and will slowly increase the standards while studying the effects. So yes every article that says "The Dodd bill also raises the net worth and income thresholds to $2.3 million and $450,000, respectively" like this WSJ article is dead wrong. The Dodd bill does no such thing.
- anamax 17y ago
  > There are no requirements that the increase follow inflation numbers. There's some discretion in the intial bump but, as I quoted, there's no discretion for subsequent and regular increases. > It only says that the SEC should increase the rates as "the Commission determines is appropriate and in the public interest, in light of price inflation." That's only for the initial bump. > I guarantee you the SEC will not double the standards over night. "Guarantee" implies that money will be changing hands if you're wrong.... Yes, they'll probably have hearings, but they've been told how they "shall" compute the new number. That's why I asked what you're "I was wrong" number is. I'm asking again.
  - anigbrowl 17y ago
    I'm asking again. I apologize, I thought that was a rhetorical question. I'll be surprised if it goes over $1.25m.
anigbrowl 17y ago
I know you're serious. But consider that the SEC has been responsive to input on this very subject after previous consultation - and I really don't think a policy review is inappropriate, in the wake of a financial meltdown. And while 412 does indeed have 2 parts, it's clearly a placeholder directive, pending a year long review of both accreditation and regulation of private capital by the Comptroller's office mandated in 413. Now here's how I look at it: Goldman and other large institutions are politically radioactive right now. We could debate whether or not that's fair, but there it is. Public support for Wall Street is at a low ebb, and Congressional Republicans have decided to debate financial reform rather than fight the tide. The big issues are bank liquidation, derivatives markets, and who will regulate consumer finance - neither the GOP nor the White House are too hot on creating a new agency that might get into fights with existing ones. this investor accreditation issue is way down the list. You should certainly call your senator to express opposition if that's how you feel, but: a) for the many tech startups & VCs in California, that's Dianne Feinstein who is unlikely to empathize; and b) it's easier for Congress to delegate the nitty-gritty details to the agencies. Frankly, I'm surprised the bill isn't more prescriptive on this issue. So suppose it passes. Two new factors come into play. One is that the SEC will hold their public consultation as discussed, and we can predict a negative reaction from startups, angels and VCs. Given the parallel review and the weak recovery so far, it's possible - I think likely - that the SEC will prefer not to introduce job-killing rule changes that would block access to capital in the short term, but wait on the other agency. ---- EDIT: I mixed myself up royally earlier, talking about the 'Comptroller of the Currency' when what I should have written was 'Comptroller General' - part of the GAO. I then looked back to my own text for further reference, perpetuating the mistake through two more paragraphs to no meaningful purpose. Sorry. I do still think that the year-long review of accreditation and fund regulation is important to HN readers. New factor two is that in August, John C Dugan will finish his term as head of the OCC (main commercial bank regulator [... EPIC ACCURACY FAIL....] small business is something that's easy to sell for both Democrats and Republicans. ---- So again, I respect your skepticism about the bill as a whole; but passage of it could increase opportunity rather than just cost.

by anamax 17y ago

hristov 17y ago

There are no requirements that the increase follow inflation numbers. It only says that the SEC should increase the rates as "the Commission determines is appropriate and in the public interest, in light of price inflation." I guarantee you the SEC will not double the standards over night. They will have a long rule making session will ask for comments from the public as they are required, and will slowly increase the standards while studying the effects. So yes every article that says "The Dodd bill also raises the net worth and income thresholds to $2.3 million and $450,000, respectively" like this WSJ article is dead wrong. The Dodd bill does no such thing.

anamax 17y ago
> There are no requirements that the increase follow inflation numbers. There's some discretion in the intial bump but, as I quoted, there's no discretion for subsequent and regular increases. > It only says that the SEC should increase the rates as "the Commission determines is appropriate and in the public interest, in light of price inflation." That's only for the initial bump. > I guarantee you the SEC will not double the standards over night. "Guarantee" implies that money will be changing hands if you're wrong.... Yes, they'll probably have hearings, but they've been told how they "shall" compute the new number. That's why I asked what you're "I was wrong" number is. I'm asking again.
- anigbrowl 17y ago
  I'm asking again. I apologize, I thought that was a rhetorical question. I'll be surprised if it goes over $1.25m.

anigbrowl 17y ago

I know you're serious. But consider that the SEC has been responsive to input on this very subject after previous consultation - and I really don't think a policy review is inappropriate, in the wake of a financial meltdown. And while 412 does indeed have 2 parts, it's clearly a placeholder directive, pending a year long review of both accreditation and regulation of private capital by the Comptroller's office mandated in 413. Now here's how I look at it: Goldman and other large institutions are politically radioactive right now. We could debate whether or not that's fair, but there it is. Public support for Wall Street is at a low ebb, and Congressional Republicans have decided to debate financial reform rather than fight the tide. The big issues are bank liquidation, derivatives markets, and who will regulate consumer finance - neither the GOP nor the White House are too hot on creating a new agency that might get into fights with existing ones. this investor accreditation issue is way down the list. You should certainly call your senator to express opposition if that's how you feel, but: a) for the many tech startups & VCs in California, that's Dianne Feinstein who is unlikely to empathize; and b) it's easier for Congress to delegate the nitty-gritty details to the agencies. Frankly, I'm surprised the bill isn't more prescriptive on this issue. So suppose it passes. Two new factors come into play. One is that the SEC will hold their public consultation as discussed, and we can predict a negative reaction from startups, angels and VCs. Given the parallel review and the weak recovery so far, it's possible - I think likely - that the SEC will prefer not to introduce job-killing rule changes that would block access to capital in the short term, but wait on the other agency. ---- EDIT: I mixed myself up royally earlier, talking about the 'Comptroller of the Currency' when what I should have written was 'Comptroller General' - part of the GAO. I then looked back to my own text for further reference, perpetuating the mistake through two more paragraphs to no meaningful purpose. Sorry. I do still think that the year-long review of accreditation and fund regulation is important to HN readers. New factor two is that in August, John C Dugan will finish his term as head of the OCC (main commercial bank regulator [... EPIC ACCURACY FAIL....] small business is something that's easy to sell for both Democrats and Republicans. ---- So again, I respect your skepticism about the bill as a whole; but passage of it could increase opportunity rather than just cost.