Industry Oversight Given to House Financial Services Committee
At a time when a new Financial Accounting Standards Board (FASB) stock option rule faces continued opposition, sole oversight over accounting, standard setting and electronic trading companies has been quietly given to the House Financial Services Committee, Dow Jones Newswires reported.
The move by House Republicans ends a 2001 deal that called for shared oversight with the Energy and Commerce Committee.
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House Speaker Dennis Hastert, R-Ill., announced the move Tuesday with little fanfare, saying that based on discussions with the two committees, the 2001 agreement "shall no longer provide jurisdictional guidance," Dow Jones reported, quoting the congressional record.
The shared oversight came from a January 2001 memorandum of understanding between Financial Services Committee Chairman Michael Oxley, R-Ohio, and Rep. W.J. "Billy" Tauzin, R-La., then chairman of the Energy and Commerce Committee, who retired last year, Dow Jones reported.
The 2001 agreement arose from a turf battle that erupted when House Republicans revamped the former Banking Committee into the Financial Services Committee, giving it oversight of stock markets, the Securities and Exchange Commission and accounting.
At that time, Tauzin insisted his committee retain authority over ECNs, or electronic communication networks, and the Financial Accounting Standards Board, the private Connecticut-based accounting standard-setter, Dow Jones reported.
"It's a welcome clarification of the jurisdiction of the Financial Services Committee," committee spokeswoman Peggy Peterson said Thursday of the move to give oversight to a single committee.
Spokesmen for the Energy and Commerce Committee and the FASB weren't immediately available to comment.
Financial Services Committee members tried last year to block stricter FASB rules on employee stock options, which will force companies to treat option grants as a business expense. The stock-option bill was adopted by the House with little input from the Energy and Commerce Committee. The Senate has yet to act on companion legislation and Oxley hasn't announced whether he will revisit the issue this year, Dow Jones reported.
The FASB's new stock-option accounting rule is slated to take effect later this year and faces continued opposition from technology companies that say expensing stock options will make it harder for them to attract and retain employees, Dow Jones reported.