For Release: Thursday, April 14, 2005
Contact: SIA Corporate Communications (202) 216-2000
SIA WELCOMES HOUSE PASSAGE OF BANKRUPTCY REFORM, APPLAUDS SENSENBRENNER'S EFFORTS IN SECURING APPROVAL
WASHINGTON, D.C., April 14, 2005 - The Securities Industry Association today praised House Judiciary Chairman James Sensenbrenner (R-WI) for his outstanding leadership in securing final passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (S.256).The bill, approved by the Senate last month, passed the House by an overwhelming, bipartisan vote of 302 to 126.
"This bill addresses serious problems in the bankruptcy system and corrects a long-standing inequity in the law by eliminating a 'per se' ban on investment banks acting as financial advisers in bankruptcy cases," said Rachel Robinson, SIA vice president, government affairs."This important change will significantly improve the entire process. We congratulate Chairman Sensenbrenner for his excellent work in winning approval of this key piece of legislation."
"We are very pleased with today's strong bipartisan vote in support of bankruptcy reform," said Steve Judge, SIA senior vice president, government affairs."The provision ending the automatic exclusion of investment banks will benefit all parties involved by broadening the pool of candidates eligible to act as advisers, thereby increasing competition and lowering the cost of advisory services."
Once the bill is signed into law, bankruptcy judges will be allowed to consider criteria for investment banks currently applied for the banking, accounting, and legal sectors in determining candidates to act as advisers to bankrupt companies.The bill in no way changes the "disinterestedness test," and does not preclude a judge from finding, based on specific facts, that an investment bank is not an appropriate choice to act as an adviser in a particular case on the basis of "material adverse interest."
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The Securities Industry Association brings together the shared interests of nearly 600 securities firms to accomplish common goals. SIA's primary mission is to build and maintain public trust and confidence in the securities markets. At its core: Commitment to Clarity, a commitment to openness and understanding as the guiding principles for all interactions between investors and the firms that serve them.SIA members (including investment banks, broker-dealers, and mutual fund companies) are active in all U.S. and foreign markets and in all phases of corporate and public finance. According to the Bureau of Labor Statistics, the U.S. securities industry employs nearly 800,000 individuals, and its personnel manage the accounts of nearly 93-million investors directly and indirectly through corporate, thrift, and pension plans. In 2004, the industry generated an estimated $227.5 billion in domestic revenue and $305 billion in global revenues. (More information about SIA is available at: www.sia.com.)
