[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2497 Introduced in Senate (IS)]

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114th CONGRESS
  2d Session
                                S. 2497

To amend the Securities Exchange Act of 1934 to provide protections for 
               retail customers, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            February 4, 2016

 Mr. Blunt (for himself, Mr. Crapo, Mr. Daines, Mr. Kirk, Mr. Isakson, 
 and Mrs. Capito) introduced the following bill; which was read twice 
  and referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To amend the Securities Exchange Act of 1934 to provide protections for 
               retail customers, 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. SHORT TITLE.

    This Act may be cited as the ``Retail Investor Protection Act of 
2016''.

SEC. 2. STAY ON RULES DEFINING CERTAIN FIDUCIARIES.

    During the period beginning on the date of enactment of this Act 
and ending on the date that is 60 days after the date on which the 
Securities and Exchange Commission issues a final rule relating to 
standards of conduct for brokers and dealers under section 15(m) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o(m)), as redesignated by 
section 3 of this Act, the Secretary of Labor may not issue any 
proposed or final 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 with 
respect to standards of conduct for brokers and dealers.

SEC. 3. AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.

    Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) 
is amended--
            (1) by redesignating the second subsection (k) (relating to 
        standard of conduct) through subsection (o) as subsections (m) 
        through (q), respectively; and
            (2) in subsection (m), as so redesignated, by adding at the 
        end the following:
            ``(3) Requirements before rulemaking.--The Commission may 
        not promulgate a rule under paragraph (1) before providing a 
        report to the Committee on Financial Services of the House of 
        Representatives and the Committee on Banking, Housing, and 
        Urban Affairs of the Senate describing whether--
                    ``(A) retail investors (and other customers that 
                the Commission may provide) are being harmed by brokers 
                or dealers operating under different standards of 
                conduct than the standards that apply to investment 
                advisers under section 211 of the Investment Advisers 
                Act of 1940 (15 U.S.C. 80b-11);
                    ``(B) alternative remedies will reduce any 
                confusion or harm to retail investors due to brokers or 
                dealers operating under different standards of conduct 
                than the standards that apply to investment advisers 
                under section 211 of the Investment Advisers Act of 
                1940 (15 U.S.C. 80b-11), including--
                            ``(i) simplifying the titles used by 
                        brokers, dealers, and investment advisers; and
                            ``(ii) enhancing disclosure surrounding the 
                        different standards of conduct applicable to 
                        brokers, dealers, and investment advisers;
                    ``(C) the adoption of a uniform fiduciary standard 
                of conduct for brokers, dealers, and investment 
                advisers would adversely impact the--
                            ``(i) commissions of brokers and dealers;
                            ``(ii) availability of proprietary products 
                        offered by brokers and dealers; and
                            ``(iii) ability of brokers and dealers to 
                        engage in principal transactions with 
                        customers; and
                    ``(D) the adoption of a uniform fiduciary standard 
                of conduct for brokers or dealers and investment 
                advisers would adversely impact retail investor access 
                to--
                            ``(i) personalized and cost-effective 
                        investment advice;
                            ``(ii) recommendations about securities; or
                            ``(iii) the availability of the advice and 
                        recommendations described in clauses (i) and 
                        (ii).
            ``(4) Economic analysis.--The conclusions of the Commission 
        contained in the report described in paragraph (3) shall be 
        supported by economic analysis.
            ``(5) Requirements for promulgating a rule.--The Commission 
        shall publish in the Federal Register, with the rule 
        promulgated under paragraph (1), formal findings that the rule 
        would reduce confusion or harm to retail customers (and other 
        customers that the Commission may by rule provide) due to 
        different standards of conduct applicable to brokers, dealers, 
        and investment advisers.
            ``(6) 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 advisers.''.
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