President Bush has signed legislation that will give the nation’s top securities regulator needed resources to carry out the landmark corporate accountability reforms enacted by Congress and the White House last July.

The Accountant, Compliance, and Enforcement Staffing Act, H.R. 658, sponsored by House Financial Services Committee Chairman Michael G. Oxley (OH) and Capital Markets Subcommittee Chairman Richard H. Baker (LA) will strengthen the U.S. capital markets by enhancing the ability of the Securities and Exchange Commission to protect investors.

The bill, which was introduced on Feb. 11 by Chairmen Oxley and Baker, addresses a staffing crisis at the SEC by enabling the Commission to more easily hire the professionals it needs to police the books of corporate America, inspect the operations of Wall Street firms and assess the costs and benefits of proposed securities regulations.

Michael G. Oxley (R-OH)
House Financial Services Committee Chairman
“This bill delivers on the promise that Congress and the President made last year to rebuild investor confidence in the U.S. markets by enacting far-reaching corporate reforms that will restore faith in the system,” said Chairman Oxley.

The Commission is currently lagging in the hiring of accountants and compliance examiners which were authorized and funded last year. Because the Commission needs to hire hundreds of professionals to carry out the reforms mandated in Sarbanes-Oxley, there is an urgent need to improve its ability to quickly and efficiently process applications.

“Reforms and new penalties to deter wrongdoing don’t mean anything unless you have the ability to implement and enforce them. We’re helping to get more cops on the street, to protect and to serve America’s average investors,” Baker said.

Specifically, the legislation would give the Commission the authority to except accountants, economists and securities compliance examiners from civil service hiring requirements, which include lengthy and burdensome procedures. The SEC has long had similar authority for hiring agency attorneys.

In a letter to Committee members, SEC Chairman William H. Donaldson and National Treasury Employees Union President Colleen M. Kelley wrote, “Without this expedited hiring authority, the Commission will not be able to hire the additional staff it needs – and which the Sarbanes-Oxley Act of 2002 contemplates – in any responsive time frame to aid in the protection of America’s investors and to help restore the integrity of our capital markets.”

The House unanimously approved the measure on June 17 by a vote of 423-0. Two days later the Senate took up and unanimously passed the Baker-Oxley bill clearing the way for the President’s signature.