As the STOCK Act heads to the House Floor for a vote on Thursday, a new piece has been added in the House version to put a halt on the Grassley provision requiring all investment managers running public pension funds, mutual funds and trust funds to file as lobbyists.
The language will call for a study to be done on what is considered to be “political intelligence activities”. According to the bill the Comptroller General of the United States along with the Congressional Research Service have twelve months after the date of the enactment of the Act to submit a report on the role of political intelligence in the financial markets. The committees who will receive the report will be the Committee on Homeland Security and Governmental Affairs of the Senate and the Committee on Oversight and Government Reform and the committee on the Judiciary of the House of Representatives.
But this latest legislative add is not calming the anxiety among those investment managers who are in the crosshairs of this legislation. “Requesting a study is very unsettling. Studies are important but the reverse side of this is inaction. We have seen in the past that the end results of a study is no action,” said Mike Kresh, Managing Member of Creative Wealthy Management and a CFP “ No one should be comforted that in the end Congress will actually have a solid definition of what is “political intelligence activities”. In the last few years congress’ track record on going through on a study recommendation is zero.”
Washington insiders say Republicans have been expected to bring their revised bill up on the suspension calendar which would allow passage with no amendments and a limited debate requiring a three-fifths/ 290-vote threshold for passage. But the passage of this bill is uncertain since some 50 or so Democrats would have to vote for the measure even if all 242 Republicans sign on.
Wall Street policy analysts are watching two possible fronts that could stop the passage of this bill. The anticipated loud protests of Representatives Louise Slaughter (D-NY) and Tim Walz, (D-MN) whose original STOCK Act legislation included the political intelligence provisions but has since been replaced by House GOP leaders with this study. “Democrats can say the bill has been watered down,” explained one analyst.
The other possible roadblock: House Democrats' voting it down in response to an IPO-related provision in the Cantor/GOP bill that would seemingly ding House Minority Leader Nancy Pelosi for having gained profitable shares in San Francisco-based Visa during on the company’s initial offerings. That outcome seems less likely, however after Pelosi tweeted over the noon hour: “I support #STOCKAct- also support “Pelosi provision” & thank @GOPLeader for giving me an amendment but sorry he weakened bill.”
Those on the Hill say that an interesting game of political chicken could be in store, “If the Democrats vote down the bill,” explained another Washington Insider, “the Republicans can say they made it stronger by restoring the study that Lieberman put in their senate bill and expanded the bill’s reach by adding more federal employees under the insider trading umbrella. It would be tough for the Democrats to go back home voting against a measure against insider trading.”
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A Senior Talent Producer at CNBC, and author of "Thriving in the New Economy:Lessons from Today's Top Business Minds."