113 HR 2374 RH: Retail Investor Protection Act U.S. House of Representatives 2013-09-25 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
IB Union Calendar No. 168 113th CONGRESS 1st Session H. R. 2374 [Report No. 113–228, Part I] IN THE HOUSE OF REPRESENTATIVES June 14, 2013 Mrs. Wagner introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned September 25, 2013 Additional sponsor: Mr. Murphy of Florida September 25, 2013 Reported from the Committee on Financial Services with an amendment Strike out all after the enacting clause and insert the part printed in italic September 25, 2013 The Committee on Education and the Workforce discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printed A BILL To amend the Securities Exchange Act of 1934 to provide protections for retail customers, and for other purposes.
1.
Short title
This Act may be cited as the Retail Investor Protection Act.
2.
Stay on rules defining certain fiduciaries
After the date of enactment of this Act, the Secretary of Labor shall not prescribe any regulation under the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et seq.) defining the circumstances under which an individual is considered a fiduciary until the date that is 60 days after the Securities and Exchange Commission issues a final rule relating to standards of conduct for brokers and dealers pursuant to the second subsection (k) of section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o(k)).
3.
Amendments to the Securities Exchange Act of 1934
The second subsection (k) of section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o(k)), as added by section 913(g)(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301 et seq.), is amended by adding at the end the following: (3)
Requirements prior to rulemaking
The Commission shall not promulgate a rule pursuant to paragraph (1) before— (A)identifying if retail customers (and such other customers as the Commission may by rule provide) are being systematically harmed or disadvantaged due to brokers or dealers operating under different standards of conduct than those standards that apply to investment advisors under section 211 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–11); (B)identifying whether the adoption of a uniform fiduciary standard of care for brokers or dealers and investment advisors would adversely impact retail investor access to personalized investment advice, recommendations about securities, or the availability of such advice and recommendations; (C)conducting an assessment by the chief economist of the Commission that assesses the qualitative and quantitative costs and benefits of the rule; and (D)the Commission, based on the assessment described in subparagraph (B)— (i)determines that the benefits of the rule justify its costs; (ii)identifies and assesses available alternatives to the rule that were considered, including modification of an existing regulation, simplification of disclosures regarding standards of care that apply to brokers or dealers and those that apply to investment advisors, together with an explanation of why the rule meets the regulatory objectives more effectively than the alternatives; and (iii)ensures that the rule is accessible, consistent, written in plain language, and easy to understand, and that the rule shall measure and seek to improve the actual results of regulatory requirements. (4)
Requirements for promulgating a rule
The Commission shall publish in the Federal Register alongside the rule promulgated pursuant to paragraph (1) formal findings that such rule would reduce the confusion of a retail customer (and such other customers as the Commission may by rule provide) about standards of conduct applicable to brokers, dealers, and investment advisors. (5)
Requirements under Investment Advisers Act of 1940
In proposing rules under paragraph (1) for brokers or dealers, the Commission shall consider the differences in the registration, supervision, and examination requirements applicable to brokers, dealers, and investment advisors. .
1.
Short title
This Act may be cited as the Retail Investor Protection Act.
2.
Stay on rules defining certain fiduciaries
After the date of enactment of this Act, the Secretary of Labor shall not prescribe any regulation under the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1001 et seq.) defining the circumstances under which an individual is considered a fiduciary until the date that is 60 days after the Securities and Exchange Commission issues a final rule relating to standards of conduct for brokers and dealers pursuant to the second subsection (k) of section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o(k)).
3.
Amendments to the Securities Exchange Act of 1934
The second subsection (k) of section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o(k)), as added by section 913(g)(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301 et seq.), is amended by adding at the end the following: (3)
Requirements prior to rulemaking
The Commission shall not promulgate a rule pursuant to paragraph (1) before— (A)identifying if retail customers (and such other customers as the Commission may by rule provide) are being systematically harmed or disadvantaged due to brokers or dealers operating under different standards of conduct than those standards that apply to investment advisors under section 211 of the Investment Advisers Act of 1940 (15 U.S.C. 80b-11); and (B)identifying whether the adoption of a uniform fiduciary standard of care for brokers or dealers and investment advisors would adversely impact retail investor access to personalized investment advice, recommendations about securities, or the availability of such advice and recommendations. (4)
Requirements for promulgating a rule
The Commission shall publish in the Federal Register alongside the rule promulgated pursuant to paragraph (1) formal findings that such rule would reduce the confusion of a retail customer (and such other customers as the Commission may by rule provide) about standards of conduct applicable to brokers, dealers, and investment advisors. (5)
Requirements under Investment Advisers Act of 1940
In proposing rules under paragraph (1) for brokers or dealers, the Commission shall consider the differences in the registration, supervision, and examination requirements applicable to brokers, dealers, and investment advisors. .
 September 25, 2013 Reported from the Committee on Financial Services with an amendment September 25, 2013 The Committee on Education and the Workforce discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printed