[Congressional Record Volume 148, Number 2 (Thursday, January 24, 2002)]
[Senate]
[Page S101]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. FITZGERALD:
  S. 1895. A bill to require investment advisers to make prominent 
public disclosures of ties with companies being analyzed by them, and 
for other purposes; to the Committee on Banking, Housing, and Urban 
Affairs.
  Mr. FITZGERALD. Mr. President, I ask unanimous consent that the text 
of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1895

       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 ``Independent Investment 
     Advisers Act of 2002''.

     SEC. 2. FINDINGS.

       Congress finds that, in the decade preceding the date of 
     enactment of this Act--
       (1) events have raised concerns about the independence of 
     the research conducted by investment advisers, particularly 
     those who are affiliated with brokerage houses and investment 
     banking institutions; and
       (2) the number of class-action lawsuits alleging conflicts 
     of interest on the part of investment advisers has increased 
     dramatically.

     SEC. 3. ENHANCED DISCLOSURES BY INVESTMENT ADVISERS.

       The Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et 
     seq.) is amended by inserting after section 204A the 
     following:


                 ``public disclosure of ties to issuers

       ``Sec. 204B. (a) If an investment adviser publishes any 
     analysis or report regarding a company or the securities of a 
     company, the investment adviser shall prominently disclose, 
     in plain language--
       ``(1) the amount of any fees that the investment adviser, 
     or person associated with the investment adviser, has 
     received from that company during the 3-year period preceding 
     the date of publication;
       ``(2) any merger or acquisition transaction handled by the 
     investment adviser during the 5-year period preceding the 
     date of publication that involves any debt or equity 
     instruments of that company, including transactions that are 
     concurrent with the publication;
       ``(3) any personal debt or equity holdings that the 
     investment adviser or person associated with the investment 
     adviser has in the company; and
       ``(4) the extent to which the investment adviser or person 
     associated with the investment adviser has debt or equity 
     holdings in that company.
       ``(b) In this section, the term `publication' has the 
     meaning given that term by regulation of the Commission, and 
     includes--
       ``(1) any written description of the subject company or the 
     securities of that company by the investment adviser; and
       ``(2) to the extent practicable--
       ``(A) any public appearance by the investment adviser or 
     person associated with the investment adviser, such as 
     participation in a seminar or forum regarding the subject 
     company or the securities of that company;
       ``(B) participation by the investment adviser or person 
     associated with the investment adviser in an interactive 
     electronic discussion group by the investment adviser 
     regarding the subject company or the securities of that 
     company; and
       ``(C) any radio or television interview of the investment 
     adviser or person associated with the investment adviser 
     regarding the subject company or the securities of that 
     company.''.
       (b) Commission Regulations.--Not later than 180 days after 
     the date of enactment of this Act, the Securities and 
     Exchange Commission shall issue final regulations to carry 
     out section 204B of the Investment Advisers Act of 1940, as 
     added by this section.
       (c) Effective Date.--Section 204B of the Investment 
     Advisers Act of 1940, as added by this Act, shall become 
     effective on the date of issuance of final regulations under 
     subsection (b).
                                 ______