[House Report 115-886]
[From the U.S. Government Publishing Office]


115th Congress    }                                 {         Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                 {         115-886

======================================================================



 
            NATIONAL SENIOR INVESTOR INITIATIVE ACT OF 2018

                                _______
                                

 August 3, 2018.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Hensarling, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 6323]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 6323) to create an interdivisional taskforce at 
the Securities and Exchange Commission for senior investors, 
having considered the same, report favorably thereon with an 
amendment and recommend that the bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``National Senior Investor Initiative 
Act of 2018'' or the ``Senior Security Act of 2018''.

SEC. 2. SENIOR INVESTOR TASKFORCE.

  Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is 
amended by adding at the end the following:
  ``(k) Senior Investor Taskforce.--
          ``(1) Establishment.--There is established within the 
        Commission the Senior Investor Taskforce (in this subsection 
        referred to as the `Taskforce').
          ``(2) Director of the taskforce.--The head of the Taskforce 
        shall be the Director, who shall--
                  ``(A) report directly to the Chairman; and
                  ``(B) be appointed by the Chairman, in consultation 
                with the Commission, from among individuals--
                          ``(i) currently employed by the Commission or 
                        from outside of the Commission; and
                          ``(ii) having experience in advocating for 
                        the interests of senior investors.
          ``(3) Staffing.--The Chairman shall ensure that--
                  ``(A) the Taskforce is staffed sufficiently to carry 
                out fully the requirements of this subsection; and
                  ``(B) such staff shall include individuals from the 
                Division of Enforcement, Office of Compliance 
                Inspections and Examinations, and Office of Investor 
                Education and Advocacy.
          ``(4) Minimizing duplication of efforts.--In organizing and 
        staffing the Taskforce, the Chairman shall take such actions as 
        may be necessary to minimize the duplication of efforts within 
        the divisions and offices described under paragraph (3)(B) and 
        any other divisions, offices, or taskforces of the Commission.
          ``(5) Functions of the taskforce.--The Taskforce shall--
                  ``(A) identify challenges that senior investors 
                encounter, including problems associated with financial 
                exploitation and cognitive decline;
                  ``(B) identify areas in which senior investors would 
                benefit from changes in the regulations of the 
                Commission or the rules of self-regulatory 
                organizations;
                  ``(C) coordinate, as appropriate, with other offices 
                within the Commission, other taskforces that may be 
                established within the Commission, self-regulatory 
                organizations, and the Elder Justice Coordinating 
                Council; and
                  ``(D) consult, as appropriate, with State securities 
                and law enforcement authorities, State insurance 
                regulators, and other Federal agencies.
          ``(6) Report.--The Taskforce, in coordination, as 
        appropriate, with the Office of the Investor Advocate and self-
        regulatory organizations, and in consultation, as appropriate, 
        with State securities and law enforcement authorities, State 
        insurance regulators, and Federal agencies, shall issue a 
        report every 2 years to the Committee on Banking, Housing, and 
        Urban Affairs of the Senate and the Committee on Financial 
        Services of the House of Representatives, the first of which 
        shall not be issued until after the report described in section 
        3 of the National Senior Investor Initiative Act of 2018 has 
        been issued and considered by the Taskforce, containing--
                  ``(A) appropriate statistical information and full 
                and substantive analysis;
                  ``(B) a summary of recent trends and innovations that 
                have impacted the investment landscape for senior 
                investors;
                  ``(C) a summary of regulatory initiatives that have 
                concentrated on senior investors and industry practices 
                related to senior investors;
                  ``(D) key observations, best practices, and areas 
                needing improvement, involving senior investors 
                identified during examinations, enforcement actions, 
                and investor education outreach;
                  ``(E) a summary of the most serious issues 
                encountered by senior investors, including issues 
                involving financial products and services;
                  ``(F) an analysis with regard to existing policies 
                and procedures of brokers, dealers, investment 
                advisers, and other market participants related to 
                senior investors and senior investor-related topics and 
                whether these policies and procedures need to be 
                further developed or refined;
                  ``(G) recommendations for such changes to the 
                regulations, guidance, and orders of the Commission and 
                self-regulatory organizations and such legislative 
                actions as may be appropriate to resolve problems 
                encountered by senior investors; and
                  ``(H) any other information, as determined 
                appropriate by the Director of the Taskforce.
          ``(7) Sunset.--The Taskforce shall terminate after the end of 
        the 10-year period beginning on the date of the enactment of 
        this subsection, but may be reestablished by the Chairman.
          ``(8) Senior investor defined.--For purposes of this 
        subsection, the term `senior investor' means an investor over 
        the age of 65.''.

SEC. 3. GAO STUDY.

  (a) In General.--Not later than 1 year after the date of enactment of 
this Act, the Comptroller General of the United States shall submit to 
Congress and the Senior Investor Taskforce the results of a study on 
the economic costs of the financial exploitation of senior citizens.
  (b) Contents.--The study required under subsection (a) shall include 
information with respect to--
          (1) costs--
                  (A) associated with losses by victims that were 
                incurred as a result of the financial exploitation of 
                senior citizens;
                  (B) incurred by State and Federal agencies, law 
                enforcement and investigatory agencies, public benefit 
                programs, public health programs, and other public 
                programs as a result of the financial exploitation of 
                senior citizens; and
                  (C) incurred by the private sector as a result of the 
                financial exploitation of senior citizens; and
          (2) any other relevant costs that--
                  (A) result from the financial exploitation of senior 
                citizens; and
                  (B) the Comptroller General determines are necessary 
                and appropriate to include in order to provide Congress 
                and the public with a full and accurate understanding 
                of the economic costs resulting from the financial 
                exploitation of senior citizens in the United States.
  (c) Senior Citizen Defined.--For purposes of this section, the term 
``senior citizen'' means an individual over the age of 65.

                          Purpose and Summary

    On July 10, 2018, Representative Gottheimer introduced H.R. 
6323, the ``National Senior Investor Initiative Act of 2018''. 
As modified by an amendment in the nature of a substitute, H.R. 
6323 creates an interdivisional task force at the U.S. 
Securities and Exchange Commission (``SEC'')--composed of staff 
from the Division of Enforcement, Office of Compliance, 
Inspections and Examinations, and the Office of Investor 
Education and Advocacy--to examine and identify challenges 
facing senior investors (the ``Task Force''). Every two years, 
in consultation with other SEC offices, State securities and 
law enforcement authorities, State insurance regulators, and 
Federal agencies, the Task Force is to report to Congress and 
recommend any regulatory or statutory changes that it believes 
are necessary. Further, within one year of enactment, the U.S. 
Government Accountability Office (``GAO'') shall study and 
report on the economic costs of the financial exploitation of 
senior citizens.

                  Background and Need for Legislation

    The goal of H.R. 6323 is to help the SEC ensure it 
continues to identify and correct financial challenges facing 
senior investors. The SEC recently has focused attention on 
these issues through the Retail Strategy Task Force established 
under Chairman Jay Clayton's leadership and the white paper on 
elder financial exploitation issued by the Office of the 
Investor Advocate in July 2018. H.R. 6323 will provide a 
statutory framework to ensure that the various SEC offices 
continue to work together to address these issues.
    According to a 2015 report, older Americans lose 
approximately $36.5 billion each year to financial scams and 
abuse. These numbers are increasing as technology makes it 
easier for scammers to target older Americans. For example, in 
New York, the state reported that in twelve months seniors lost 
as much as $1.5 billion from misappropriation of funds. 
Further, a 2016 survey from the Investor Protection Trust found 
that almost 1-in-5 seniors, approximately 7 million Americans, 
have reported being victims of exploitation. Even more 
troubling is that the majority of financial exploitation 
against seniors goes unreported. According to the National 
Adult Protective Services Association, only one in 44 cases of 
financial abuse may be reported.
    On May the President signed into law the ``Economic Growth, 
Regulatory Relief and Consumer Protection Act'' (P.L. 115-174) 
(EGRRCPA). Section 303 of the law, entitled ``Immunity from 
suit for disclosure of financial exploitation of senior 
citizens'', or more commonly known as the Senior Safe Act 
provides immunity to depository institutions, credit unions, 
investment advisers, broker-dealers, insurance companies, 
insurance agency, or transfer agents, and their employees from 
civil or administrative liability, as long as employees at 
these specified institutions receive training in how to 
identify and report predatory activity and reports are made 
``in good faith'' and ``with reasonable care.'' Current bank 
privacy laws make it difficult for these entities to report any 
potentially fraudulent activity. Maine's Senior$afe program 
served as the basis for the Senior Safe Act and Section 303 of 
the EGRRCPA. Sadly, financial exploitation of seniors often is 
committed by those closest to seniors, such as friends, 
neighbors, family members, caregivers, or other trusted 
individuals. Maine designed its program to train financial 
professionals to detect and report senior financial abuse.
    At a time when the population of senior investors is 
increasing rapidly, H.R. 6323 will help to ensure that the SEC 
can marshal its resources across the agency to identify and 
work to reduce financial abuse against senior investors. The 
legislation empowers the SEC Chairman to appoint a director of 
the Task Force, who can be a current SEC employee, and to 
ensure the Task Force is operated in coordination with other 
offices and initiatives to reduce bureaucratic redundancies. 
The Task Force will report to Congress every two years on key 
observations, best practices, and areas for improvement 
identified throughout its work. Additionally, the GAO will 
conduct a study on the economic costs of the financial 
exploitation of elder investors--which will provide much needed 
recent data on financial exploitation; and the Task Force must 
consider this report in connection with its own first report to 
Congress.

                                Hearings

    The Committee on Financial Services held no hearings 
examining matters relating to H.R. 6323.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
July 11, 2018, and ordered H.R. 6323 to be reported favorably 
to the House, as amended, by voice vote.

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
sole vote was a motion by Chairman Hensarling to report the 
bill favorably to the House as amended. The motion was agreed 
to by voice vote, a quorum being present.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee states that H.R. 6323 
will help the SEC to eliminate the increasing number of 
financial exploitation cases against senior citizens by 
creating an interdivisional task force at the SEC to examine 
and identify challenges facing senior investors and will help 
Congress and the public, through a report by the GAO, to better 
understand the economic costs of the exploitation of seniors.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                 Congressional Budget Office Estimates

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 17, 2018.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3555, H.R. 6177, 
H.R. 6319, H.R. 6320, H.R. 6321, H.R. 6322, H.R. 6323, and H.R. 
6324.
    If you wish further details on these estimates, we will be 
pleased to provide them. The CBO staff contact is Stephen 
Rabent.
            Sincerely,
                                             Mark P. Hadley
                                        (For Keith Hall, Director).
    Enclosure.

Securities and Exchange Commission Legislation

    On July 11, the House Committee on Financial Services 
ordered eight bills to be reported related to the rules, 
regulations, and operations of the Securities and Exchange 
Commission (SEC). The bills are:
           H.R. 3555, the Exchange Regulatory 
        Improvement Act, would require the Securities and 
        Exchange Commission (SEC) to issue regulations 
        regarding its definition of what constitutes a facility 
        used by a national securities exchange;
           H.R. 6177, the Developing and Empowering our 
        Aspiring Leaders Act of 2018, would direct the SEC to 
        conduct a rulemaking to expand what types of asset 
        acquisitions are considered qualifying investments for 
        a venture capital fund;
           H.R. 6319, the Expanding Investment in Small 
        Business Act, would require the SEC to conduct a study 
        on the limitation on the amount of outstanding 
        securities a closed-end fund may hold from a single 
        issuer and still be classified as diversified;
           H.R. 6320, the Promoting Transparent 
        Standards for Corporate Insiders Act, would require the 
        SEC to conduct a study of various proposals to change 
        agency rules regarding the use of written trading plans 
        by certain securities traders;
           H.R. 6321, the Investment Adviser Regulatory 
        Flexibility Improvement Act, would require the SEC to 
        revise the definitions of a small business and small 
        organization applicable for assessing the effect of the 
        agency's rulemakings under the Investment Advisers Act 
        of 1940 on those entities;
           H.R. 6322, the Enhancing Multi-Class Share 
        Disclosures Act, would direct the SEC to issue a rule 
        requiring securities issuers with multi-class stock 
        structures to make disclosures regarding the voting 
        power of certain individuals;
           H.R. 6323, the National Senior Investor 
        Initiative Act of 2018, would direct the SEC to 
        establish a taskforce to identify challenges that 
        senior investors face and to report on its findings 
        every two years; and
           H.R. 6324, the Middle Market IPO 
        Underwriting Cost Act, would direct the SEC to study 
        the costs associated with small and medium-sized 
        companies undertaking an initial public offering and to 
        report on its findings.
    Using information from the SEC regarding the costs of 
similar activities, CBO estimates that implementing seven of 
those bills--H.R. 3555, H.R. 6177, H.R. 6319, H.R. 6320, H.R. 
6321, H.R. 6322, and H.R. 6324--would each have a gross cost of 
about $1 million for the agency to conduct the required studies 
and rulemakings and to issue reports. CBO estimates that 
implementing the eighth bill--H.R. 6323--would have a gross 
cost of $7 million over the 2019-2023 period for the SEC to 
establish and carry out the functions of the taskforce 
established under the bill.
    However, the SEC is authorized to collect fees sufficient 
to offset its annual appropriation; therefore, CBO estimates 
that the net effect on discretionary spending of implementing 
each of those bills would be negligible, assuming appropriation 
actions consistent with that authority. H.R. 6323 also would 
require the Government Accountability Office (GAO) to conduct a 
study on the economic costs of the financial exploitation of 
senior citizens and CBO estimates that implementing that 
section would cost GAO less than $500,000; such spending would 
be subject to the availability of appropriated funds.
    None of the bills would affect direct spending or revenues; 
therefore, pay-as-you-go procedures do not apply for any of the 
eight bills.
    None of the bills would increase net direct spending or on-
budget deficits in any of the four consecutive 10-year periods 
beginning in 2029, CBO estimates.
    None of the bills contain intergovernmental mandates as 
defined in the Unfunded Mandate Reform Act (UMRA) and would not 
affect the budgets of state, local, or tribal governments. All 
of them would require the SEC to take actions that could raise 
the agency's administrative costs and the fees it collects to 
offset those costs. If the SEC increased fees, it would 
increase the cost of an existing mandate on private entities 
required to pay those fees. CBO estimates that none of the 
bills would increase fees in an amount that would exceed the 
annual threshold for private-sector mandates established in 
UMRA ($160 million in 2018, adjusted annually for inflation).
    The CBO staff contacts for this estimate are Stephen Rabent 
(for federal costs) and Rachel Austin (for mandates). The 
estimate was reviewed by H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995.
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of the section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    Duplication of Federal Programs

    In compliance with clause 3(c)(5) of rule XIII of the Rules 
of the House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program; (2) a program included in any report 
from the Government Accountability Office to Congress pursuant 
to section 21 of Public Law 111-139; or (3) a program related 
to a program identified in the most recent Catalog of Federal 
Domestic Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, (115th Congress), 
the following statement is made concerning directed rule 
makings: The Committee estimates that the bill requires no 
directed rule makings within the meaning of such section.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section cites H.R. 6323 as the ``National Senior 
Investor Initiative Act of 2018'' or the ``Senior Security Act 
of 2018.''

Section 2. Senior Investors Taskforce

    This section amends Section 4 of the Securities Exchange 
Act of 1934 to establish an interdivisional Senior Investors 
Task Force within the Commission, composed of staff from the 
Division of Enforcement, Office of Compliance, Inspections and 
Examinations, and Office of Investor Education and Advocacy, to 
examine and identify challenges facing senior investors. Senior 
investors are defined as investors over the age of 65.
    The task force will issue a report every two years on its 
findings to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Financial Services 
of the House of Representatives. The Task Force will terminate 
at the end of the 10-year period after enactment.
    The SEC is empowered to establish and run the Task Force in 
a manner that compliments initiatives and activities of other 
divisions, offices, and task forces and to reduce bureaucratic 
redundancies.

Section 3. GAO study

    This section cites that GAO is ordered to conduct a study 
within one year after enactment as to the economic costs 
associated with the financial exploitation of senior citizens. 
The section also requires the GAO study to include certain 
information.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                    SECURITIES EXCHANGE ACT OF 1934


TITLE I--REGULATION OF SECURITIES EXCHANGES

           *       *       *       *       *       *       *



                   securities and exchange commission

  Sec. 4. (a) There is hereby established a Securities and 
Exchange Commission (hereinafter referred to as the 
``Commission'') to be composed of five commissioners to be 
appointed by the President by and with the advice and consent 
of the Senate. Not more than three of such commissioners shall 
be members of the same political party, and in making 
appointments members of different political parties shall be 
appointed alternately as nearly as may be practicable. No 
commissioner shall engage in any other business, vocation, or 
employment than that of serving as commissioner, nor shall any 
commissioner participate, directly or indirectly, in any stock-
market operations or transactions of a character subject to 
regulation by the Commission pursuant to this title. Each 
commissioner shall hold office for a term of five years and 
until his successor is appointed and has qualified, except that 
he shall not so continue to serve beyond the expiration of the 
next session of Congress subsequent to the expiration of said 
fixed term of office, and except (1) any commissioner appointed 
to fill a vacancy occurring prior to the expiration of the term 
for which his predecessor was appointed shall be appointed for 
the remainder of such term, and (2) the terms of office of the 
commissioners first taking office after the enactment of this 
title shall expire as designated by the President at the time 
of nomination, one at the end of one year, one at the end of 
two years, one at the end of three years, one at the end of 
four years, and one at the end of five years, after the date of 
the enactment of this title.
  (b) Appointment and Compensation of Staff and Leasing 
Authority.--
          (1) Appointment and compensation.--The Commission 
        shall appoint and compensate officers, attorneys, 
        economists, examiners, and other employees in 
        accordance with section 4802 of title 5, United States 
        Code.
          (2) Reporting of information.--In establishing and 
        adjusting schedules of compensation and benefits for 
        officers, attorneys, economists, examiners, and other 
        employees of the Commission under applicable provisions 
        of law, the Commission shall inform the heads of the 
        agencies referred to under section 1206 of the 
        Financial Institutions Reform, Recovery, and 
        Enforcement Act of 1989 (12 U.S.C. 1833b) and Congress 
        of such compensation and benefits and shall seek to 
        maintain comparability with such agencies regarding 
        compensation and benefits.
          (3) Leasing authority.--Nothwithstanding any other 
        provision of law, the Commission is authorized to enter 
        directly into leases for real property for office, 
        meeting, storage, and such other space as is necessary 
        to carry out its functions, and shall be exempt from 
        any General Services Administration space management 
        regulations or directives.
  (c) Notwithstanding any other provision of law, in accordance 
with regulations which the Commission shall prescribe to 
prevent conflicts of interest, the Commission may accept 
payment and reimbursement, in cash or in kind, from non-Federal 
agencies, organizations, and individuals for travel, 
subsistence, and other necessary expenses incurred by 
Commission members and employees in attending meetings and 
conferences concerning the functions or activities of the 
Commission. Any payment or reimbursement accepted shall be 
credited to the appropriated funds of the Commission. The 
amount of travel, subsistence, and other necessary expenses for 
members and employees paid or reimbursed under this subsection 
may exceed per diem amounts established in official travel 
regulations, but the Commission may include in its regulations 
under this subsection a limitation on such amounts.
  (d) Notwithstanding any other provision of law, former 
employers of participants in the Commission's professional 
fellows programs may pay such participants their actual 
expenses for relocation to Washington, District of Columbia, to 
facilitate their participation in such programs, and program 
participants may accept such payments.
  (e) Notwithstanding any other provision of law, whenever any 
fee is required to be paid to the Commission pursuant to any 
provision of the securities laws or any other law, the 
Commission may provide by rule that such fee shall be paid in a 
manner other than in cash and the Commission may also specify 
the time that such fee shall be determined and paid relative to 
the filing of any statement or document with the Commission.
  (f) Reimbursement of Expenses for Assisting Foreign 
Securities Authorities.--Notwithstanding any other provision of 
law, the Commission may accept payment and reimbursement, in 
cash or in kind, from a foreign securities authority, or made 
on behalf of such authority, for necessary expenses incurred by 
the Commission, its members, and employees in carrying out any 
investigation pursuant to section 21(a)(2) of this title or in 
providing any other assistance to a foreign securities 
authority. Any payment or reimbursement accepted shall be 
considered a reimbursement to the appropriated funds of the 
Commission.
  (g) Office of the Investor Advocate.--
          (1) Office established.--There is established within 
        the Commission the Office of the Investor Advocate (in 
        this subsection referred to as the ``Office'').
          (2) Investor advocate.--
                  (A) In general.--The head of the Office shall 
                be the Investor Advocate, who shall--
                          (i) report directly to the Chairman; 
                        and
                          (ii) be appointed by the Chairman, in 
                        consultation with the Commission, from 
                        among individuals having experience in 
                        advocating for the interests of 
                        investors in securities and investor 
                        protection issues, from the perspective 
                        of investors.
                  (B) Compensation.--The annual rate of pay for 
                the Investor Advocate shall be equal to the 
                highest rate of annual pay for other senior 
                executives who report to the Chairman of the 
                Commission.
                  (C) Limitation on service.--An individual who 
                serves as the Investor Advocate may not be 
                employed by the Commission--
                          (i) during the 2-year period ending 
                        on the date of appointment as Investor 
                        Advocate; or
                          (ii) during the 5-year period 
                        beginning on the date on which the 
                        person ceases to serve as the Investor 
                        Advocate.
          (3) Staff of office.--The Investor Advocate, after 
        consultation with the Chairman of the Commission, may 
        retain or employ independent counsel, research staff, 
        and service staff, as the Investor Advocate deems 
        necessary to carry out the functions, powers, and 
        duties of the Office.
          (4) Functions of the investor advocate.--The Investor 
        Advocate shall--
                  (A) assist retail investors in resolving 
                significant problems such investors may have 
                with the Commission or with self-regulatory 
                organizations;
                  (B) identify areas in which investors would 
                benefit from changes in the regulations of the 
                Commission or the rules of self-regulatory 
                organizations;
                  (C) identify problems that investors have 
                with financial service providers and investment 
                products;
                  (D) analyze the potential impact on investors 
                of--
                          (i) proposed regulations of the 
                        Commission; and
                          (ii) proposed rules of self-
                        regulatory organizations registered 
                        under this title; and
                  (E) to the extent practicable, propose to the 
                Commission changes in the regulations or orders 
                of the Commission and to Congress any 
                legislative, administrative, or personnel 
                changes that may be appropriate to mitigate 
                problems identified under this paragraph and to 
                promote the interests of investors.
          (5) Access to documents.--The Commission shall ensure 
        that the Investor Advocate has full access to the 
        documents of the Commission and any self-regulatory 
        organization, as necessary to carry out the functions 
        of the Office.
          (6) Annual reports.--
                  (A) Report on objectives.--
                          (i) In general.--Not later than June 
                        30 of each year after 2010, the 
                        Investor Advocate 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 on 
                        the objectives of the Investor Advocate 
                        for the following fiscal year.
                          (ii) Contents.--Each report required 
                        under clause (i) shall contain full and 
                        substantive analysis and explanation.
                  (B) Report on activities.--
                          (i) In general.--Not later than 
                        December 31 of each year after 2010, 
                        the Investor Advocate 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 on 
                        the activities of the Investor Advocate 
                        during the immediately preceding fiscal 
                        year.
                          (ii) Contents.--Each report required 
                        under clause (i) shall include--
                                  (I) appropriate statistical 
                                information and full and 
                                substantive analysis;
                                  (II) information on steps 
                                that the Investor Advocate has 
                                taken during the reporting 
                                period to improve investor 
                                services and the responsiveness 
                                of the Commission and self-
                                regulatory organizations to 
                                investor concerns;
                                  (III) a summary of the most 
                                serious problems encountered by 
                                investors during the reporting 
                                period;
                                  (IV) an inventory of the 
                                items described in subclause 
                                (III) that includes--
                                          (aa) identification 
                                        of any action taken by 
                                        the Commission or the 
                                        self-regulatory 
                                        organization and the 
                                        result of such action;
                                          (bb) the length of 
                                        time that each item has 
                                        remained on such 
                                        inventory; and
                                          (cc) for items on 
                                        which no action has 
                                        been taken, the reasons 
                                        for inaction, and an 
                                        identification of any 
                                        official who is 
                                        responsible for such 
                                        action;
                                  (V) recommendations for such 
                                administrative and legislative 
                                actions as may be appropriate 
                                to resolve problems encountered 
                                by investors; and
                                  (VI) any other information, 
                                as determined appropriate by 
                                the Investor Advocate.
                          (iii) Independence.--Each report 
                        required under this paragraph shall be 
                        provided directly to the Committees 
                        listed in clause (i) without any prior 
                        review or comment from the Commission, 
                        any commissioner, any other officer or 
                        employee of the Commission, or the 
                        Office of Management and Budget.
                          (iv) Confidentiality.--No report 
                        required under clause (i) may contain 
                        confidential information.
          (7) Regulations.--The Commission shall, by 
        regulation, establish procedures requiring a formal 
        response to all recommendations submitted to the 
        Commission by the Investor Advocate, not later than 3 
        months after the date of such submission.
          (8) Ombudsman.--
                  (A) Appointment.--Not later than 180 days 
                after the date on which the first Investor 
                Advocate is appointed under paragraph 
                (2)(A)(i), the Investor Advocate shall appoint 
                an Ombudsman, who shall report directly to the 
                Investor Advocate.
                  (B) Duties.--The Ombudsman appointed under 
                subparagraph (A) shall--
                          (i) act as a liaison between the 
                        Commission and any retail investor in 
                        resolving problems that retail 
                        investors may have with the Commission 
                        or with self-regulatory organizations;
                          (ii) review and make recommendations 
                        regarding policies and procedures to 
                        encourage persons to present questions 
                        to the Investor Advocate regarding 
                        compliance with the securities laws; 
                        and
                          (iii) establish safeguards to 
                        maintain the confidentiality of 
                        communications between the persons 
                        described in clause (ii) and the 
                        Ombudsman.
                  (C) Limitation.--In carrying out the duties 
                of the Ombudsman under subparagraph (B), the 
                Ombudsman shall utilize personnel of the 
                Commission to the extent practicable. Nothing 
                in this paragraph shall be construed as 
                replacing, altering, or diminishing the 
                activities of any ombudsman or similar office 
                of any other agency.
                  (D) Report.--The Ombudsman shall submit a 
                semiannual report to the Investor Advocate that 
                describes the activities and evaluates the 
                effectiveness of the Ombudsman during the 
                preceding year. The Investor Advocate shall 
                include the reports required under this section 
                in the reports required to be submitted by the 
                Inspector Advocate under paragraph (6).
  (h) Examiners.--
          (1) Division of trading and markets.--The Division of 
        Trading and Markets of the Commission, or any successor 
        organizational unit, shall have a staff of examiners 
        who shall--
                  (A) perform compliance inspections and 
                examinations of entities under the jurisdiction 
                of that Division; and
                  (B) report to the Director of that Division.
          (2) Division of investment management.--The Division 
        of Investment Management of the Commission, or any 
        successor organizational unit, shall have a staff of 
        examiners who shall--
                  (A) perform compliance inspections and 
                examinations of entities under the jurisdiction 
                of that Division; and
                  (B) report to the Director of that Division.
  (i) Securities and Exchange Commission Reserve Fund.--
          (1) Reserve fund established.--There is established 
        in the Treasury of the United States a separate fund, 
        to be known as the ``Securities and Exchange Commission 
        Reserve Fund'' (referred to in this subsection as the 
        ``Reserve Fund'').
          (2) Reserve fund amounts.--
                  (A) In general.--Except as provided in 
                subparagraph (B), any registration fees 
                collected by the Commission under section 6(b) 
                of the Securities Act of 1933 (15 U.S.C. 
                77f(b)) or section 24(f) of the Investment 
                Company Act of 1940 (15 U.S.C. 80a-24(f)) shall 
                be deposited into the Reserve Fund.
                  (B) Limitations.--For any 1 fiscal year--
                          (i) the amount deposited in the Fund 
                        may not exceed $50,000,000; and
                          (ii) the balance in the Fund may not 
                        exceed $100,000,000.
                  (C) Excess fees.--Any amounts in excess of 
                the limitations described in subparagraph (B) 
                that the Commission collects from registration 
                fees under section 6(b) of the Securities Act 
                of 1933 (15 U.S.C. 77f(b)) or section 24(f) of 
                the Investment Company Act of 1940 (15 U.S.C. 
                80a-24(f)) shall be deposited in the General 
                Fund of the Treasury of the United States and 
                shall not be available for obligation by the 
                Commission.
          (3) Use of amounts in reserve fund.--The Commission 
        may obligate amounts in the Reserve Fund, not to exceed 
        a total of $100,000,000 in any 1 fiscal year, as the 
        Commission determines is necessary to carry out the 
        functions of the Commission. Any amounts in the reserve 
        fund shall remain available until expended. Not later 
        than 10 days after the date on which the Commission 
        obligates amounts under this paragraph, the Commission 
        shall notify Congress of the date, amount, and purpose 
        of the obligation.
          (4) Rule of construction.--Amounts collected and 
        deposited in the Reserve Fund shall not be construed to 
        be Government funds or appropriated monies and shall 
        not be subject to apportionment for the purpose of 
        chapter 15 of title 31, United States Code, or under 
        any other authority.
  (j) Office of the Advocate for Small Business Capital 
Formation.--
          (1) Office established.--There is established within 
        the Commission the Office of the Advocate for Small 
        Business Capital Formation (hereafter in this 
        subsection referred to as the ``Office'').
          (2) Advocate for small business capital formation.--
                  (A) In general.--The head of the Office shall 
                be the Advocate for Small Business Capital 
                Formation, who shall--
                          (i) report directly to the 
                        Commission; and
                          (ii) be appointed by the Commission, 
                        from among individuals having 
                        experience in advocating for the 
                        interests of small businesses and 
                        encouraging small business capital 
                        formation.
                  (B) Compensation.--The annual rate of pay for 
                the Advocate for Small Business Capital 
                Formation shall be equal to the highest rate of 
                annual pay for other senior executives who 
                report directly to the Commission.
                  (C) No current employee of the commission.--
                An individual may not be appointed as the 
                Advocate for Small Business Capital Formation 
                if the individual is currently employed by the 
                Commission.
          (3) Staff of office.--The Advocate for Small Business 
        Capital Formation, after consultation with the 
        Commission, may retain or employ independent counsel, 
        research staff, and service staff, as the Advocate for 
        Small Business Capital Formation determines to be 
        necessary to carry out the functions of the Office.
          (4) Functions of the advocate for small business 
        capital formation.--The Advocate for Small Business 
        Capital Formation shall--
                  (A) assist small businesses and small 
                business investors in resolving significant 
                problems such businesses and investors may have 
                with the Commission or with self-regulatory 
                organizations;
                  (B) identify areas in which small businesses 
                and small business investors would benefit from 
                changes in the regulations of the Commission or 
                the rules of self-regulatory organizations;
                  (C) identify problems that small businesses 
                have with securing access to capital, including 
                any unique challenges to minority-owned small 
                businesses, women-owned small businesses, and 
                small businesses affected by hurricanes or 
                other natural disasters;
                  (D) analyze the potential impact on small 
                businesses and small business investors of--
                          (i) proposed regulations of the 
                        Commission that are likely to have a 
                        significant economic impact on small 
                        businesses and small business capital 
                        formation; and
                          (ii) proposed rules that are likely 
                        to have a significant economic impact 
                        on small businesses and small business 
                        capital formation of self-regulatory 
                        organizations registered under this 
                        title;
                  (E) conduct outreach to small businesses and 
                small business investors, including through 
                regional roundtables, in order to solicit views 
                on relevant capital formation issues;
                  (F) to the extent practicable, propose to the 
                Commission changes in the regulations or orders 
                of the Commission and to Congress any 
                legislative, administrative, or personnel 
                changes that may be appropriate to mitigate 
                problems identified under this paragraph and to 
                promote the interests of small businesses and 
                small business investors;
                  (G) consult with the Investor Advocate on 
                proposed recommendations made under 
                subparagraph (F); and
                  (H) advise the Investor Advocate on issues 
                related to small businesses and small business 
                investors.
          (5) Access to documents.--The Commission shall ensure 
        that the Advocate for Small Business Capital Formation 
        has full access to the documents and information of the 
        Commission and any self-regulatory organization, as 
        necessary to carry out the functions of the Office.
          (6) Annual report on activities.--
                  (A) In general.--Not later than December 31 
                of each year after 2015, the Advocate for Small 
                Business Capital Formation 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 on the activities of 
                the Advocate for Small Business Capital 
                Formation during the immediately preceding 
                fiscal year.
                  (B) Contents.--Each report required under 
                subparagraph (A) shall include--
                          (i) appropriate statistical 
                        information and full and substantive 
                        analysis;
                          (ii) information on steps that the 
                        Advocate for Small Business Capital 
                        Formation has taken during the 
                        reporting period to improve small 
                        business services and the 
                        responsiveness of the Commission and 
                        self-regulatory organizations to small 
                        business and small business investor 
                        concerns;
                          (iii) a summary of the most serious 
                        issues encountered by small businesses 
                        and small business investors, including 
                        any unique issues encountered by 
                        minority-owned small businesses, women-
                        owned small businesses, and small 
                        businesses affected by hurricanes or 
                        other natural disasters and their 
                        investors, during the reporting period;
                          (iv) an inventory of the items 
                        summarized under clause (iii) 
                        (including items summarized under such 
                        clause for any prior reporting period 
                        on which no action has been taken or 
                        that have not been resolved to the 
                        satisfaction of the Advocate for Small 
                        Business Capital Formation as of the 
                        beginning of the reporting period 
                        covered by the report) that includes--
                                  (I) identification of any 
                                action taken by the Commission 
                                or the self-regulatory 
                                organization and the result of 
                                such action;
                                  (II) the length of time that 
                                each item has remained on such 
                                inventory; and
                                  (III) for items on which no 
                                action has been taken, the 
                                reasons for inaction, and an 
                                identification of any official 
                                who is responsible for such 
                                action;
                          (v) recommendations for such changes 
                        to the regulations, guidance and orders 
                        of the Commission and such legislative 
                        actions as may be appropriate to 
                        resolve problems with the Commission 
                        and self-regulatory organizations 
                        encountered by small businesses and 
                        small business investors and to 
                        encourage small business capital 
                        formation; and
                          (vi) any other information, as 
                        determined appropriate by the Advocate 
                        for Small Business Capital Formation.
                  (C) Confidentiality.--No report required by 
                subparagraph (A) may contain confidential 
                information.
                  (D) Independence.--Each report required under 
                subparagraph (A) shall be provided directly to 
                the committees of Congress listed in such 
                subparagraph without any prior review or 
                comment from the Commission, any commissioner, 
                any other officer or employee of the 
                Commission, or the Office of Management and 
                Budget.
          (7) Regulations.--The Commission shall establish 
        procedures requiring a formal response to all 
        recommendations submitted to the Commission by the 
        Advocate for Small Business Capital Formation, not 
        later than 3 months after the date of such submission.
          (8) Government-business forum on small business 
        capital formation.--The Advocate for Small Business 
        Capital Formation shall be responsible for planning, 
        organizing, and executing the annual Government-
        Business Forum on Small Business Capital Formation 
        described in section 503 of the Small Business 
        Investment Incentive Act of 1980 (15 U.S.C. 80c-1).
          (9) Rule of construction.--Nothing in this subsection 
        may be construed as replacing or reducing the 
        responsibilities of the Investor Advocate with respect 
        to small business investors.
  (k) Senior Investor Taskforce.--
          (1) Establishment.--There is established within the 
        Commission the Senior Investor Taskforce (in this 
        subsection referred to as the ``Taskforce'').
          (2) Director of the taskforce.--The head of the 
        Taskforce shall be the Director, who shall--
                  (A) report directly to the Chairman; and
                  (B) be appointed by the Chairman, in 
                consultation with the Commission, from among 
                individuals--
                          (i) currently employed by the 
                        Commission or from outside of the 
                        Commission; and
                          (ii) having experience in advocating 
                        for the interests of senior investors.
          (3) Staffing.--The Chairman shall ensure that--
                  (A) the Taskforce is staffed sufficiently to 
                carry out fully the requirements of this 
                subsection; and
                  (B) such staff shall include individuals from 
                the Division of Enforcement, Office of 
                Compliance Inspections and Examinations, and 
                Office of Investor Education and Advocacy.
          (4) Minimizing duplication of efforts.--In organizing 
        and staffing the Taskforce, the Chairman shall take 
        such actions as may be necessary to minimize the 
        duplication of efforts within the divisions and offices 
        described under paragraph (3)(B) and any other 
        divisions, offices, or taskforces of the Commission.
          (5) Functions of the taskforce.--The Taskforce 
        shall--
                  (A) identify challenges that senior investors 
                encounter, including problems associated with 
                financial exploitation and cognitive decline;
                  (B) identify areas in which senior investors 
                would benefit from changes in the regulations 
                of the Commission or the rules of self-
                regulatory organizations;
                  (C) coordinate, as appropriate, with other 
                offices within the Commission, other taskforces 
                that may be established within the Commission, 
                self-regulatory organizations, and the Elder 
                Justice Coordinating Council; and
                  (D) consult, as appropriate, with State 
                securities and law enforcement authorities, 
                State insurance regulators, and other Federal 
                agencies.
          (6) Report.--The Taskforce, in coordination, as 
        appropriate, with the Office of the Investor Advocate 
        and self-regulatory organizations, and in consultation, 
        as appropriate, with State securities and law 
        enforcement authorities, State insurance regulators, 
        and Federal agencies, shall issue a report every 2 
        years to the Committee on Banking, Housing, and Urban 
        Affairs of the Senate and the Committee on Financial 
        Services of the House of Representatives, the first of 
        which shall not be issued until after the report 
        described in section 3 of the National Senior Investor 
        Initiative Act of 2018 has been issued and considered 
        by the Taskforce, containing--
                  (A) appropriate statistical information and 
                full and substantive analysis;
                  (B) a summary of recent trends and 
                innovations that have impacted the investment 
                landscape for senior investors;
                  (C) a summary of regulatory initiatives that 
                have concentrated on senior investors and 
                industry practices related to senior investors;
                  (D) key observations, best practices, and 
                areas needing improvement, involving senior 
                investors identified during examinations, 
                enforcement actions, and investor education 
                outreach;
                  (E) a summary of the most serious issues 
                encountered by senior investors, including 
                issues involving financial products and 
                services;
                  (F) an analysis with regard to existing 
                policies and procedures of brokers, dealers, 
                investment advisers, and other market 
                participants related to senior investors and 
                senior investor-related topics and whether 
                these policies and procedures need to be 
                further developed or refined;
                  (G) recommendations for such changes to the 
                regulations, guidance, and orders of the 
                Commission and self-regulatory organizations 
                and such legislative actions as may be 
                appropriate to resolve problems encountered by 
                senior investors; and
                  (H) any other information, as determined 
                appropriate by the Director of the Taskforce.
          (7) Sunset.--The Taskforce shall terminate after the 
        end of the 10-year period beginning on the date of the 
        enactment of this subsection, but may be reestablished 
        by the Chairman.
          (8) Senior investor defined.--For purposes of this 
        subsection, the term ``senior investor'' means an 
        investor over the age of 65.

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