Aligning SEC Regulations for the World Bank’s International Development Association Act
Summary
H.R. 1764, the "Aligning SEC Regulations for the World Bank's International Development Association Act," seeks to exempt securities issued by the International Development Association (IDA) from certain securities laws. This exemption would align the IDA's securities regulations with those of other multilateral development banks in which the United States is a member.
The bill grants the Securities and Exchange Commission (SEC) the authority to suspend this exemption under specific conditions, particularly if the IDA provides financial assistance to countries supporting international terrorism. The SEC is also required to report to Congress on the operations and effects of this section.
Expected Effects
The primary effect of this bill would be to ease the process for the IDA to issue and guarantee securities in the US market. This could potentially lower costs and increase the IDA's access to capital. However, the SEC retains the power to suspend the exemption, providing a safeguard against potential misuse of funds.
Potential Benefits
- Simplifies securities issuance for the International Development Association.
- Potentially lowers borrowing costs for the IDA, freeing up funds for development projects.
- Aligns US regulations with international norms for multilateral development banks.
- Includes a safeguard allowing the SEC to suspend the exemption if the IDA supports countries involved in terrorism.
- Could lead to increased investment in developing countries through the IDA.
Potential Disadvantages
- Could increase risk to US investors if the SEC's oversight is insufficient.
- May indirectly support governments with questionable human rights records if the terrorism clause is not strictly enforced.
- Potential for the SEC to overreach in suspending the exemption, hindering the IDA's operations.
- The exemption could create a loophole that allows the IDA to bypass important regulatory checks.
- Possible negative perception if the US is seen as lowering its standards for international financial institutions.
Constitutional Alignment
The bill appears to align with the Constitution, particularly Article I, Section 8, which grants Congress the power to borrow money on the credit of the United States and to regulate commerce with foreign nations. The bill does not infringe upon individual rights or liberties protected by the Bill of Rights. The delegation of authority to the SEC is consistent with established practices of regulatory agencies.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).