H.R.1764 - Aligning SEC Regulations for the World Bank’s International Development Association Act (119th Congress)
Summary
H.R.1764, the "Aligning SEC Regulations for the World Bank's International Development Association Act," seeks to provide securities issued by the International Development Association (IDA) the same exemptions from securities laws as other multilateral development banks where the U.S. is a member. This bill amends the International Development Association Act to include a section exempting IDA securities from certain provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. The Securities and Exchange Commission (SEC) retains the authority to suspend this exemption and must report to Congress on the operations and effects of this section.
Expected Effects
The primary effect of this bill would be to streamline the process by which the IDA can issue and guarantee securities in the U.S. market. This could potentially lower costs and increase the efficiency of IDA's operations. However, the bill also includes a provision allowing the SEC to suspend the exemption if the IDA provides financial assistance to countries supporting international terrorism, providing a safeguard.
Potential Benefits
- Potentially lowers the cost of capital for the International Development Association.
- Streamlines regulatory processes for IDA securities in the U.S.
- May lead to increased investment in development projects supported by the IDA.
- The SEC retains oversight and can suspend exemptions under certain conditions.
- Promotes international cooperation and development.
Most Benefited Areas:
Potential Disadvantages
- Exempting IDA securities from certain regulations could increase risk for investors.
- The SEC's oversight may not be sufficient to fully mitigate potential risks.
- There is a potential for the IDA to indirectly support countries with questionable human rights records or those that support terrorism, although safeguards are in place.
- The benefits to the American people are indirect, primarily through international development efforts.
- The bill could be perceived as prioritizing international interests over domestic concerns.
Constitutional Alignment
The bill appears to align with the Constitution, particularly Article I, Section 8, which grants Congress the power to regulate commerce with foreign nations and to borrow money on the credit of the United States. The bill's provisions for SEC oversight and reporting to Congress also support the principle of checks and balances. However, the Constitution does not explicitly address the exemption of international organizations from securities laws, leaving room for interpretation.
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).