Among other things, the GLB Act

• Eliminated the Glass-Stegall restrictions on affiliations between commercial banks and investment banks;
• Repealed Section 32 of the Glass-Steagall Act, which prohibited commercial banks and investment banks from having overlapping officers, directors, or employees.
• Amended Section 16 of the Glass-Steagall Act, which defines the corporate powers of national banks, so that well-capitalized banks may underwrite, deal, or purchase municipal revenue bonds, limited obligation bonds and other debt instruments issued by a state or a political sub-division of a state.

The GLB Act made corresponding changes to the federal securities laws.

The GLB Act also amended the Bank Holding Company Act of 1956 by providing for the creation of financial holding companies. A financial holding company is a bank holding company that may engage in any activity or hold the shares of any company that engages in any

Investment Company Act of 1940

The Investment Company Act of 1940 (“1940 Act”) regulates companies, that engage primarily in investing in securities of other companies.  A mutual fund, one type of investment company, is a corporation (or business trust) that invests in other companies. Investors buy shares in the mutual fund, which in turn, invests in other securities, called “portfolio securities.”.  An investment adviser, discussed below, makes day-to-day decisions about which portfolio securities the mutual fund should buy or sell.  Congress enacted the 1940 Act to address abuses in the investment company industry and is designed to help minimize conflicts of interest that arise in the operation of these companies. 

The 1940 Act seeks to prevent abuses through mandating disclosure regarding the investment company’s structure, operations, financial condition, and investment policies when shares of the investment company are initia

Overview:
The current authorization for the Commodity Futures Trading Commission (CFTC) expired on September 30, 2005. Congress has often used the CFTC reauthorization process to consider changes to the operations of the futures exchanges and the oversight authority of the CFTC.

Position:
SIFMA opposes any substantive changes to the provisions of the Commodity Exchange Act applicable to over-the-counter (OTC) derivatives.

Status:
The House Agriculture Committee approved the Commodity Futures Trading Commission Reauthorization Act of 2007.  SIFMA joined the International Swaps and Derivative Association (ISDA), the Futures Industry Association (FIA), and the Managed Funds Association (MFA) in a letter of support for the bill.  CFTC reauthorization language was included in the Senate-approved farm bill (H.R.2419).  It is expected the House and Senate will work to reconcile differ