[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 78 Engrossed in House (EH)]

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115th CONGRESS
  1st Session
                                 H. R. 78

_______________________________________________________________________

                                 AN ACT


 
To improve the consideration by the Securities and Exchange Commission 
        of the costs and benefits of its regulations and orders.

    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 ``SEC Regulatory Accountability Act''.

SEC. 2. CONSIDERATION BY THE SECURITIES AND EXCHANGE COMMISSION OF THE 
              COSTS AND BENEFITS OF ITS REGULATIONS AND CERTAIN OTHER 
              AGENCY ACTIONS.

    Section 23 of the Securities Exchange Act of 1934 (15 U.S.C. 78w) 
is amended by adding at the end the following:
    ``(e) Consideration of Costs and Benefits.--
            ``(1) In general.--Before issuing a regulation under the 
        securities laws, as defined in section 3(a), the Commission 
        shall--
                    ``(A) clearly identify the nature and source of the 
                problem that the proposed regulation is designed to 
                address, as well as assess the significance of that 
                problem, to enable assessment of whether any new 
                regulation is warranted;
                    ``(B) utilize the Chief Economist to assess the 
                costs and benefits, both qualitative and quantitative, 
                of the intended regulation and propose or adopt a 
                regulation only on a reasoned determination that the 
                benefits of the intended regulation justify the costs 
                of the regulation;
                    ``(C) identify and assess available alternatives to 
                the regulation that were considered, including 
                modification of an existing regulation, together with 
                an explanation of why the regulation meets the 
                regulatory objectives more effectively than the 
                alternatives; and
                    ``(D) ensure that any regulation is accessible, 
                consistent, written in plain language, and easy to 
                understand and shall measure, and seek to improve, the 
                actual results of regulatory requirements.
            ``(2) Considerations and actions.--
                    ``(A) Required actions.--In deciding whether and 
                how to regulate, the Commission shall assess the costs 
                and benefits of available regulatory alternatives, 
                including the alternative of not regulating, and choose 
                the approach that maximizes net benefits. Specifically, 
                the Commission shall--
                            ``(i) consistent with the requirements of 
                        section 3(f) (15 U.S.C. 78c(f)), section 2(b) 
                        of the Securities Act of 1933 (15 U.S.C. 
                        77b(b)), section 202(c) of the Investment 
                        Advisers Act of 1940 (15 U.S.C. 80b-2(c)), and 
                        section 2(c) of the Investment Company Act of 
                        1940 (15 U.S.C. 80a-2(c)), consider whether the 
                        rulemaking, in addition to being in the 
                        interest of protecting investors, will promote 
                        efficiency, competition, and capital formation;
                            ``(ii) evaluate whether, consistent with 
                        obtaining regulatory objectives, the regulation 
                        is tailored to impose the least burden on 
                        society, including market participants, 
                        individuals, businesses of differing sizes, and 
                        other entities (including State and local 
                        governmental entities), taking into account, to 
                        the extent practicable, the cumulative costs of 
                        regulations; and
                            ``(iii) evaluate whether the regulation is 
                        inconsistent, incompatible, or duplicative of 
                        other Federal regulations.
                    ``(B) Additional considerations.--In addition, in 
                making a reasoned determination of the costs and 
                benefits of a potential regulation, the Commission 
                shall, to the extent that each is relevant to the 
                particular proposed regulation, take into consideration 
                the impact of the regulation on--
                            ``(i) investor choice;
                            ``(ii) market liquidity in the securities 
                        markets; and
                            ``(iii) small businesses.
            ``(3) Explanation and comments.--The Commission shall 
        explain in its final rule the nature of comments that it 
        received, including those from the industry or consumer groups 
        concerning the potential costs or benefits of the proposed rule 
        or proposed rule change, and shall provide a response to those 
        comments in its final rule, including an explanation of any 
        changes that were made in response to those comments and the 
        reasons that the Commission did not incorporate those industry 
        group concerns related to the potential costs or benefits in 
        the final rule.
            ``(4) Review of existing regulations.--Not later than 1 
        year after the date of enactment of the SEC Regulatory 
        Accountability Act, and every 5 years thereafter, the 
        Commission shall review its regulations to determine whether 
        any such regulations are outmoded, ineffective, insufficient, 
        or excessively burdensome, and shall modify, streamline, 
        expand, or repeal them in accordance with such review. Whenever 
        pursuant to this paragraph the Commission is engaged in a 
        review, it shall consider whether an action is necessary or 
        appropriate in the public interest, the protection of 
        investors, and whether the action will promote efficiency, 
        competition, and capital formation. In reviewing any regulation 
        (including, notwithstanding paragraph (6), a regulation issued 
        in accordance with formal rulemaking provisions) that subjects 
        issuers with a public float of $250,000,000 or less to the 
        attestation and reporting requirements of section 404(b) of the 
        Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262(b)), the Commission 
        shall specifically take into account the large burden of such 
        regulation when compared to the benefit of such regulation.
            ``(5) Post-adoption impact assessment.--
                    ``(A) In general.--Whenever the Commission adopts 
                or amends a regulation designated as a `major rule' 
                within the meaning of section 804(2) of title 5, United 
                States Code, it shall state, in its adopting release, 
                the following:
                            ``(i) The purposes and intended 
                        consequences of the regulation.
                            ``(ii) Appropriate post-implementation 
                        quantitative and qualitative metrics to measure 
                        the economic impact of the regulation and to 
                        measure the extent to which the regulation has 
                        accomplished the stated purposes.
                            ``(iii) The assessment plan that will be 
                        used, consistent with the requirements of 
                        subparagraph (B) and under the supervision of 
                        the Chief Economist of the Commission, to 
                        assess whether the regulation has achieved the 
                        stated purposes.
                            ``(iv) Any unintended or negative 
                        consequences that the Commission foresees may 
                        result from the regulation.
                    ``(B) Requirements of assessment plan and report.--
                            ``(i) Requirements of plan.--The assessment 
                        plan required under this paragraph shall 
                        consider the costs, benefits, and intended and 
                        unintended consequences of the regulation. The 
                        plan shall specify the data to be collected, 
                        the methods for collection and analysis of the 
                        data and a date for completion of the 
                        assessment. The assessment plan shall include 
                        an analysis of any jobs added or lost as a 
                        result of the regulation, differentiating 
                        between public and private sector jobs.
                            ``(ii) Submission and publication of 
                        report.--The Chief Economist shall submit the 
                        completed assessment report to the Commission 
                        no later than 2 years after the publication of 
                        the adopting release, unless the Commission, at 
                        the request of the Chief Economist, has 
                        published at least 90 days before such date a 
                        notice in the Federal Register extending the 
                        date and providing specific reasons why an 
                        extension is necessary. Within 7 days after 
                        submission to the Commission of the final 
                        assessment report, it shall be published in the 
                        Federal Register for notice and comment. Any 
                        material modification of the plan, as necessary 
                        to assess unforeseen aspects or consequences of 
                        the regulation, shall be promptly published in 
                        the Federal Register for notice and comment.
                            ``(iii) Data collection not subject to 
                        notice and comment requirements.--If the 
                        Commission has published its assessment plan 
                        for notice and comment, specifying the data to 
                        be collected and method of collection, at least 
                        30 days prior to adoption of a final regulation 
                        or amendment, such collection of data shall not 
                        be subject to the notice and comment 
                        requirements in section 3506(c) of title 44, 
                        United States Code (commonly referred to as the 
                        Paperwork Reduction Act). Any material 
                        modifications of the plan that require 
                        collection of data not previously published for 
                        notice and comment shall also be exempt from 
                        such requirements if the Commission has 
                        published notice for comment in the Federal 
                        Register of the additional data to be 
                        collected, at least 30 days prior to initiation 
                        of data collection.
                            ``(iv) Final action.--Not later than 180 
                        days after publication of the assessment report 
                        in the Federal Register, the Commission shall 
                        issue for notice and comment a proposal to 
                        amend or rescind the regulation, or publish a 
                        notice that the Commission has determined that 
                        no action will be taken on the regulation. Such 
                        a notice will be deemed a final agency action.
            ``(6) Covered regulations and other agency actions.--Solely 
        as used in this subsection, the term `regulation'--
                    ``(A) means an agency statement of general 
                applicability and future effect that is designed to 
                implement, interpret, or prescribe law or policy or to 
                describe the procedure or practice requirements of an 
                agency, including rules, orders of general 
                applicability, interpretive releases, and other 
                statements of general applicability that the agency 
                intends to have the force and effect of law; and
                    ``(B) does not include--
                            ``(i) a regulation issued in accordance 
                        with the formal rulemaking provisions of 
                        section 556 or 557 of title 5, United States 
                        Code;
                            ``(ii) a regulation that is limited to 
                        agency organization, management, or personnel 
                        matters;
                            ``(iii) a regulation promulgated pursuant 
                        to statutory authority that expressly prohibits 
                        compliance with this provision; and
                            ``(iv) a regulation that is certified by 
                        the agency to be an emergency action, if such 
                        certification is published in the Federal 
                        Register.''.

SEC. 3. SENSE OF CONGRESS RELATING TO OTHER REGULATORY ENTITIES.

    It is the sense of the Congress that the Public Company Accounting 
Oversight Board should also follow the requirements of section 23(e) of 
such Act, as added by this title.

SEC. 4. ACCOUNTABILITY PROVISION RELATING TO OTHER REGULATORY ENTITIES.

    A rule adopted by the Municipal Securities Rulemaking Board or any 
national securities association registered under section 15A of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o-3) shall not take effect 
unless the Securities and Exchange Commission determines that, in 
adopting such rule, the Board or association has complied with the 
requirements of section 23(e) of such Act, as added by section 2, in 
the same manner as is required by the Commission under such section 
23(e).

            Passed the House of Representatives January 12, 2017.

            Attest:

                                                                 Clerk.
115th CONGRESS

  1st Session

                                H. R. 78

_______________________________________________________________________

                                 AN ACT

To improve the consideration by the Securities and Exchange Commission 
        of the costs and benefits of its regulations and orders.