U.S. Chamber: Proxy Access Would Undermine Economic Growth; Should Be Determined by the States

Urges House Financial Services Committee to Reject Waters Amendment

WASHINGTON, D.C.—The U.S. Chamber of Commerce today called on members of the House Financial Services Committee to reject the Waters Amendment to the Investor Protection Act, H.R. 3817, being voted on in the committee today.

"The U.S. Chamber supports efforts to improve investor protections and enhance the effectiveness of financial regulators," said David Hirschmann, president & CEO of the U.S. Chamber's Center for Capital Markets Competitiveness. "However, we have serious concerns that the Waters Amendment will lead to unintended consequences which will inhibit job creation and endanger economic recovery."

As written, the Waters Amendment will create a right to proxy access that will federalize corporate law, overturning 150 years of state corporate law and endangering the free enterprise model that bred the most productive economy in world history. The Chamber supports the states taking the lead on investor choice and has opposed a federal, one-size-fits-all approach on proxy access, arguing that it would:

• Reverse the longstanding history of state corporate law;
• Distract the SEC from regulating financial markets and further strain its resources;
• Hamstring Main Street while trying to correct the problems of Wall Street;
• Be unnecessary since states have already been enhancing shareholder rights; and
• Disenfranchise individual investors and empower special interests.

Last week the Chamber, the American Insurance Association, the Competitive Enterprise Institute, Financial Services Roundtable, and the National Association of Wholesale Distributors sent a letter to Representatives Frank and Bachus opposing the amendment.

"The Waters Amendment will place select special interests that likely are not in the best interests of the company and its shareholders at the front of the line," said Hirschmann. "Allowing special interests to hijack the management of a business could seriously impair the competitiveness of America's best companies, and undermine economic growth and job creation."

The U.S. Chamber is the world's largest business federation representing more than 3 million businesses and organizations of every size, sector, and region.

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