[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4600 Introduced in House (IH)]

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118th CONGRESS
  1st Session
                                H. R. 4600

 To amend the Investment Advisers Act of 1940 to specify requirements 
concerning the consideration of pecuniary and non-pecuniary factors, to 
 require the Securities and Exchange Commission to conduct a study on 
  climate change and other environmental disclosures in the municipal 
 bond market, and to require the Securities and Exchange Commission to 
 conduct a study on the solicitation of municipal securities business.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 13, 2023

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

_______________________________________________________________________

                                 A BILL


 
 To amend the Investment Advisers Act of 1940 to specify requirements 
concerning the consideration of pecuniary and non-pecuniary factors, to 
 require the Securities and Exchange Commission to conduct a study on 
  climate change and other environmental disclosures in the municipal 
 bond market, and to require the Securities and Exchange Commission to 
 conduct a study on the solicitation of municipal securities business.

    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 ``Protecting Retail Investors' Savings 
Act''.

SEC. 2. BEST INTEREST BASED ON PECUNIARY FACTORS.

    (a) In General.--Section 211(g) of the Investment Advisers Act of 
1940 (15 U.S.C. 80b-11(g)) is amended by adding at the end the 
following:
            ``(3) Best interest based on pecuniary factors.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the best interest of a customer shall be determined 
                using pecuniary factors, which may not be subordinated 
                to or limited by non-pecuniary factors, unless the 
                customer provides informed consent, in writing, that 
                such non-pecuniary factors be considered.
                    ``(B) Disclosure of pecuniary factors.--If a 
                customer provides a broker, dealer, or investment 
                adviser with the informed consent to consider non-
                pecuniary factors described under subparagraph (A), the 
                broker, dealer, or investment adviser shall--
                            ``(i) disclose the expected pecuniary 
                        effects to the customer over a time period 
                        selected by the customer and not to exceed 
                        three years; and
                            ``(ii) at the end of the time period 
                        described in clause (i), disclose, by 
                        comparison to a reasonably comparable index or 
                        basket of securities selected by the customer, 
                        the actual pecuniary effects of that time 
                        period, including all fees, costs, and other 
                        expenses incurred to consider non-pecuniary 
                        factors.
                    ``(C) Pecuniary factor defined.--In this paragraph, 
                the term `pecuniary factor' means a factor that a 
                fiduciary prudently determines is expected to have a 
                material effect on the risk or return of an investment 
                based on appropriate investment horizons.''.
    (b) Rulemaking.--Not later than the end of the 12-month period 
beginning on the date of enactment of this Act, the Securities and 
Exchange Commission shall revise or issue such rules as may be 
necessary to implement the amendment made by subsection (a).
    (c) Applicability.--The amendment made by subsection (a) shall 
apply to actions taken by a broker, dealer, or investment adviser 
beginning on the date that is 12 months after the date of enactment of 
this Act.

SEC. 3. STUDY ON CLIMATE CHANGE AND OTHER ENVIRONMENTAL DISCLOSURES IN 
              MUNICIPAL BOND MARKET.

    (a) In General.--The Securities and Exchange Commission shall--
            (1) conduct a study to determine the extent to which 
        issuers of municipal securities (as such term is defined in 
        section 3(a)(29) of the Securities Exchange Act of 1934 (15 
        U.S.C. 78c(a)(29)) make disclosures to investors regarding 
        climate change and other environmental matters; and
            (2) solicit public comment with respect to such study.
    (b) Contents.--The study required under subsection (a) shall 
consider and analyze--
            (1) the frequency with which disclosures described in 
        subsection (a)(1) are made;
            (2) whether such disclosures made by issuers of municipal 
        securities in connection with offerings of securities align 
        with such disclosures made by issuers of municipal securities 
        in other contexts or to audiences other than investors;
            (3) any voluntary or mandatory disclosure standards 
        observed by issuers of municipal securities in the course of 
        making such disclosures;
            (4) the degree to which investors consider such disclosures 
        in connection with making an investment decision; and
            (5) such other information as the Securities and Exchange 
        Commission determines appropriate.
    (c) Report.--Not later than 1 year after the date of the enactment 
of this Act, the Securities and Exchange Commission shall submit to the 
Committee on Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of Representatives a 
report that includes--
            (1) the results of the study required under this section;
            (2) a detailed discussion of the financial risks to 
        investors from investments in municipal securities;
            (3) whether such risks are adequately disclosed to 
        investors; and
            (4) recommended regulatory or legislative steps to address 
        any concerns identified in the study.

SEC. 4. STUDY ON SOLICITATION OF MUNICIPAL SECURITIES BUSINESS.

    (a) In General.--The Securities and Exchange Commission shall--
            (1) conduct a study on the effectiveness of each covered 
        rule in preventing the payment of funds to elected officials or 
        candidates for elected office in exchange for the receipt of 
        government business in connection with the offer or sale of 
        municipal securities; and
            (2) solicit public comment with respect to such study.
    (b) Contents.--The study required under subsection (a) shall 
consider and analyze--
            (1) the effectiveness of each covered rule, including 
        whether each covered rule accomplishes the intended effect of 
        such covered rule and has any unintended adverse effects;
            (2) the frequency and scope of enforcement actions 
        undertaken pursuant to each covered rule;
            (3) the degree to which--
                    (A) persons subject to each covered rule--
                            (i) have in effect policies and procedures 
                        intended to ensure compliance with each such 
                        covered rule; and
                            (ii) are disadvantaged from participating 
                        in the political process generally and in 
                        relation to persons who solicit or receive 
                        government business or government licenses, 
                        permits, and approvals other than in connection 
                        with the offer or sale of municipal securities; 
                        and
                    (B) other State and Federal laws and regulations 
                impact the solicitation of municipal securities 
                business; and
            (4) such other information as the Securities and Exchange 
        Commission determines appropriate.
    (c) Report.--Not later than 1 year after the date of the enactment 
of this Act, the Securities and Exchange Commission shall submit to the 
Committee on Banking, Housing, and Urban Affairs of the Senate and the 
Committee on Financial Services of the House of Representatives a 
report that includes--
            (1) the results of the study required under this section;
            (2) an analysis of the extent to which persons affiliated 
        with small businesses, as well as persons affiliated with 
        minority and women opened businesses, have been affected by the 
        covered rules; and
            (3) recommended regulatory or legislative steps to address 
        any concerns identified in the study.
    (d) Definitions.--In this section:
            (1) Covered rule.--The term ``covered rule'' means--
                    (A) Rule G-38 of the Municipal Securities 
                Rulemaking Board; and
                    (B) Rule 206(4)-5 (17 CFR 275.206(4)-5).
            (2) Municipal securities.--The term ``municipal 
        securities'' has the meaning given the term in section 3(a)(29) 
        of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(29)).
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