Statement of Administration Policy: H.R. 3657 - Securities Markets Stabilization Act of 1990

FINAL

(House)
(Markey (D) Massachusetts and 5 others)

The Administration supports House passage of H.R. 3657 but will seek amendments in the Senate to delete section 5. Section 5 would give the Securities and Exchange Commission sweeping powers to prohibit temporarily any practice that has "previously contributed to extraordinary levels of volatility" and that is "reasonably likely to engender" such volatility. In the Administration's view, these provisions are overly broad and potentially harmful.

The Administration shares concerns that have been expressed about problems associated with major market disruptions. However, the Administration strongly opposes attempts to restrict particular trading strategies, including computer trading. The Administration is instead focusing on the mechanisms of the individual markets and inconsistent intermarket regulation that may cause major market disruptions.