[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1212 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 1212

    To amend the Sarbanes-Oxley Act of 2002 to provide oversight of 
   auditors of brokers and dealers by the Public Company Accounting 
                Oversight Board, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 26, 2009

Mr. Kanjorski introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
    To amend the Sarbanes-Oxley Act of 2002 to provide oversight of 
   auditors of brokers and dealers by the Public Company Accounting 
                Oversight Board, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. OVERSIGHT OF BROKERS AND DEALERS.

    (a) Definitions.--Title I of the Sarbanes-Oxley Act of 2002 is 
amended by adding at the end the following new section:

``SEC. 110. DEFINITIONS.

    ``For the purposes of this title, and notwithstanding section 2:
            ``(1) Audit.--The term `audit' means an examination of the 
        financial statements of any issuer, broker, or dealer by an 
        independent public accounting firm in accordance with the rules 
        of the Board or the Commission (or, for the period preceding 
        the adoption of applicable rules of the Board under section 
        103, in accordance with then-applicable generally accepted 
        auditing and related standards for such purposes), for the 
        purpose of expressing an opinion on such statements.
            ``(2) Audit report.--The term `audit report' means a 
        document or other record--
                    ``(A) prepared following an audit performed for 
                purposes of compliance by an issuer, broker, or dealer 
                with the requirements of the securities laws; and
                    ``(B) in which a public accounting firm either--
                            ``(i) sets forth the opinion of that firm 
                        regarding a financial statement, report, or 
                        other document; or
                            ``(ii) asserts that no such opinion can be 
                        expressed.
            ``(3) Professional standards.--The term `professional 
        standards' means--
                    ``(A) accounting principles that are--
                            ``(i) established by the standard setting 
                        body described in section 19(b) of the 
                        Securities Act of 1933, as amended by this Act, 
                        or prescribed by the Commission under section 
                        19(a) of that Act (15 U.S.C. 17a(s)) or section 
                        13(b) of the Securities Exchange Act of 1934 
                        (15 U.S.C. 78a(m)); and
                            ``(ii) relevant to audit reports for 
                        particular issuers, brokers, or dealers, or 
                        dealt with in the quality control system of a 
                        particular registered public accounting firm; 
                        and
                    ``(B) auditing standards, standards for attestation 
                engagements, quality control policies and procedures, 
                ethical and competency standards, and independence 
                standards (including rules implementing title II) that 
                the Board or the Commission determines--
                            ``(i) relate to the preparation or issuance 
                        of audit reports for issuers, brokers, or 
                        dealers; and
                            ``(ii) are established or adopted by the 
                        Board under section 103(a), or are promulgated 
                        as rules of the Commission.
            ``(4) Broker.--The term `broker' means a broker (as such 
        term is defined in section 3(a)(4) of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78c(a)(4))) that is required to file a 
        balance sheet, income statement, or other financial statement 
        under section 17(e)(1)(A) of such Act (15 U.S.C. 78q(e)(1)(A)), 
        where such balance sheet, income statement, or financial 
        statement is required to be certified by a registered public 
        accounting firm.
            ``(5) Dealer.--The term `dealer' means a dealer (as such 
        term is defined in section 3(a)(5) of the Securities Exchange 
        Act of 1934 (15 U.S.C. 78c(a)(5))) that is required to file a 
        balance sheet, income statement, or other financial statement 
        under section 17(e)(1)(A) of such Act (15 U.S.C. 78q(e)(1)(A)), 
        where such balance sheet, income statement, or financial 
        statement is required to be certified by a registered public 
        accounting firm.
            ``(6) Self-regulatory organization.--The term `self-
        regulatory organization' has the same meaning as in section 
        3(a)(26) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78c(a)(26)).''.
    (b) Establishment and Administration of the Public Company 
Accounting Oversight Board.--Section 101 of such Act is amended--
            (1) by striking ``issuers'' each place it appears and 
        inserting ``issuers, brokers, and dealers'';
            (2) in subsection (a), by striking ``public companies'' and 
        inserting ``companies''; and
            (3) in subsection (a), by striking ``for companies the 
        securities of which are sold to, and held by and for, public 
        investors''.
    (c) Registration With the Board.--Section 102 of such Act is 
amended--
            (1) by striking ``Beginning 180 days after the date of the 
        determination of the Commission under section 101(d), it'' and 
        inserting ``It'';
            (2) in subsections (a) and (b)(2)(G), by striking 
        ``issuer'' each place it appears and inserting ``issuer, 
        broker, or dealer''; and
            (3) by striking ``issuers'' and inserting ``issuers, 
        brokers, and dealers''.
    (d) Auditing and Independence.--Section 103(a) of such Act is 
amended--
            (1) in paragraph (1), by striking ``and such ethics 
        standards'' and inserting ``such ethics standards, and such 
        independence standards'';
            (2) in paragraph (2)(A)(iii), by striking ``describe in 
        each audit report'' and inserting ``in each audit report for an 
        issuer, describe''; and
            (3) in paragraph (2)(B)(i), by striking ``issuers'' and 
        inserting ``issuers, brokers, and dealers''.
    (e) Inspections of Registered Public Accounting Firms.--Section 104 
of such Act is amended--
            (1) in subsection (a), by striking ``issuers'' and 
        inserting ``issuers, brokers, and dealers'';
            (2) in subsection (b)(1)(A), by inserting before the 
        semicolon the following ``or more than 100 brokers and 
        dealers''; and
            (3) in subsection (b)(1)(B), by striking ``100 or fewer 
        issuers'' and inserting ``issuers, brokers, or dealers, but is 
        not described in subparagraph (A)''.
    (f) Investigations and Disciplinary Proceedings.--Section 
105(c)(7)(B) of such Act is amended--
            (1) by striking ``any issuer'' each place it appears and 
        inserting ``any issuer, broker, or dealer''; and
            (2) by striking ``an issuer under this subsection'' and 
        inserting ``a registered public accounting firm under this 
        subsection''.
    (g) Foreign Public Accounting Firms.--Section 106 of such Act is 
amended--
            (1) by striking ``issuer'' and inserting ``issuer, broker, 
        or dealer''; and
            (2) by striking ``issuers'' and inserting ``issuers, 
        brokers, or dealers''.
    (h) Funding.--Section 109 of such Act is amended--
            (1) in subsection (c)(2), by striking ``subsection (i)'' 
        and inserting ``subsection (j)'';
            (2) in subsection (d)(2), by striking ``allowing for 
        differentiation among classes of issuers, as appropriate'' and 
        inserting ``and among brokers and dealers that are not issuers, 
        in accordance with subsection (h), and allowing for 
        differentiation among classes of issuers and brokers and 
        dealers, as appropriate'';
            (3) by redesignating subsections (h), (i), and (j) as 
        subsections (i), (j), and (k), respectively; and
            (4) by inserting after subsection (g) the following new 
        subsection:
    ``(h) Allocation of Accounting Support Fees Among Brokers and 
Dealers.--
            ``(1) In general.--Any amount due from brokers and dealers 
        that are not issuers (or a particular class of such brokers and 
        dealers) under this section to fund the budget of the Board 
        shall be allocated among and payable by such brokers and 
        dealers (or such brokers and dealers in a particular class, as 
        applicable). A broker or dealer's allocation shall be in 
        proportion to the broker or dealer's net capital compared to 
        the total net capital of all brokers and dealers that are not 
        issuers, in accordance with the rules of the Board.
            ``(2) Obligation to pay.--Every broker or dealer shall pay 
        the share of a reasonable annual accounting support fee or fees 
        allocated to such broker or dealer under this section.''.
    (i) Referral of Investigations to a Self-Regulatory Organization.--
Section 105(b)(4)(B) of the Sarbanes-Oxley Act of 2002 is amended--
            (1) by redesignating clauses (ii) and (iii) as clauses 
        (iii) and (iv), respectively; and
            (2) by inserting after clause (i) the following new clause:
                            ``(ii) to a self-regulatory organization, 
                        in the case of an investigation that concerns 
                        an audit report for a broker or dealer that is 
                        subject to the jurisdiction of such self-
                        regulatory organization;''.
    (j) Use of Documents Related to an Inspection or Investigation.--
Section 105(b)(5)(B)(ii) of such Act is amended--
            (1) in subclause (III), by striking ``and'';
            (2) in subclause (IV), by striking the comma and inserting 
        ``; and''; and
            (3) by inserting after subclause (IV) the following new 
        subclause:
                                    ``(V) a self-regulatory 
                                organization, with respect to an audit 
                                report for a broker or dealer that is 
                                subject to the jurisdiction of such 
                                self-regulatory organization,''.

SEC. 2. EFFECTIVE DATE.

    The amendments made by this Act shall take effect 180 days after 
the date of the enactment of this Act.
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