[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1815 Reported in House (RH)]

<DOC>





                                                  Union Calendar No. 91
116th CONGRESS
  1st Session
                                H. R. 1815

                          [Report No. 116-123]

  To require the Securities and Exchange Commission, when developing 
rules and regulations about disclosures to retail investors, to conduct 
     investor testing, including a survey and interviews of retail 
                   investors, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 18, 2019

    Mr. Casten of Illinois introduced the following bill; which was 
            referred to the Committee on Financial Services

                             June 20, 2019

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
 [For text of introduced bill, see copy of bill as introduced on March 
                               18, 2019]


_______________________________________________________________________

                                 A BILL


 
  To require the Securities and Exchange Commission, when developing 
rules and regulations about disclosures to retail investors, to conduct 
     investor testing, including a survey and interviews of retail 
                   investors, 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 ``SEC Disclosure Effectiveness Testing 
Act''.

SEC. 2. DISCLOSURE TESTING.

    (a) In General.--Section 23(a) of the Securities Exchange Act of 
1934 (15 U.S.C. 78w(a)) is amended by adding at the end the following:
    ``(4) Investor Testing.--
            ``(A) In general.--The Commission shall engage in investor 
        testing prior to issuing any rule or regulation which 
        designates documents or information to be disclosed under the 
        securities laws, if such documents or information--
                    ``(i) are primarily used by retail investors, as 
                determined by the Commission; and
                    ``(ii) are intended to be used by retail investors 
                to make informed investment decisions or to understand 
                the investments held by the retail investor.
            ``(B) Contents.--Investor testing conducted pursuant to 
        subparagraph (A) shall include the following:
                    ``(i) Qualitative testing in the form of one-on-one 
                cognitive interviews of retail investors about 
                documents or information, or samples of such documents 
                or information, to be provided.
                    ``(ii) A nationwide survey of retail investors, 
                designed to complement the interviews under clause (i), 
                on--
                            ``(I) the usefulness of such documents or 
                        information, or samples of such documents or 
                        information;
                            ``(II) the proposed format of such 
                        documents or information, or samples of such 
                        documents or information; and
                            ``(III) delivery preferences of such 
                        documents or information, or samples of such 
                        documents or information.
                    ``(iii) Analysis and publication in the Federal 
                Register of the results of the survey and interviews.
                    ``(iv) An opportunity for the public to comment on 
                such results published in the Federal Register.
            ``(C) Substantive changes.--If the Commission, in the 
        period between engaging in investor testing and publishing a 
        final rule, makes substantive changes to such rule that the 
        Commission determines would have a significant impact on retail 
        investors, the Commission shall again engage in investor 
        testing.
            ``(D) Public availability of retail testing results.--The 
        Commission shall make the data and results of any investor 
        testing performed pursuant to this paragraph available to the 
        public.''.
    (b) Participation of Investor Advocate.--Section 4(g) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78d(g)) is amended--
            (1) in paragraph (4)--
                    (A) in subparagraph (D)(ii), by striking ``and'' at 
                the end;
                    (B) by redesignating subparagraph (E) as 
                subparagraph (F); and
                    (C) by inserting after subparagraph (D) the 
                following:
                    ``(E) engage in investor testing--
                            ``(i) as necessary to carry out the 
                        functions of the Office; and
                            ``(ii) under section 23(a)(4), if the 
                        Commission determines it appropriate; and''; 
                        and
            (2) by adding at the end the following:
            ``(9) Publication of data and results of investor 
        testing.--With respect to any investor testing carried out by 
        the Investor Advocate pursuant to paragraph (4)(E), the 
        Investor Advocate may make the data and results of such 
        investor testing available to the public, and without further 
        review or editing by the Commission.''.
    (c) Prior Rules.--
            (1) In general.--For any final rule or regulation issued by 
        the Securities and Exchange Commission (in this subsection 
        referred to as the ``Commission'') before the date of the 
        enactment of this Act that would be subject to investor testing 
        under section 23(a)(4) of the Securities Exchange Act of 1934, 
        had such rule been issued on or after the date of enactment of 
        this Act, the Commission shall perform investor testing with 
        respect to such rule or regulation that includes the contents 
        described in such section 23(a)(4).
            (2) Schedule.--The Commission shall, not later than 6 
        months after the date of the enactment of this Act, establish a 
        schedule for completing any investor testing required under 
        paragraph (1) that prioritizes testing of any final rules and 
        regulations that designate documents or information central to 
        retail investor decision making.
            (3) Report.--The Commission shall issue a report to 
        Congress each year containing the following:
                    (A) The status of any investor testing required 
                under paragraph (1).
                    (B) The results of any investor testing completed 
                under paragraph (1).
                    (C) Any priorities the Commission has, based on 
                results of investor testing required by paragraph (1), 
                for--
                            (i) revising or eliminating any final rule 
                        or regulation designating documents or 
                        information to be provided to retail investors; 
                        and
                            (ii) revising any other final rule or 
                        regulation to supplement revised or eliminated 
                        rules designating documents or information to 
                        be provided to retail investors.
                                                  Union Calendar No. 91

116th CONGRESS

  1st Session

                               H. R. 1815

                          [Report No. 116-123]

_______________________________________________________________________

                                 A BILL

  To require the Securities and Exchange Commission, when developing 
rules and regulations about disclosures to retail investors, to conduct 
     investor testing, including a survey and interviews of retail 
                   investors, and for other purposes.

_______________________________________________________________________

                             June 20, 2019

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed