[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6613 Introduced in House (IH)]
112th CONGRESS
2d Session
H. R. 6613
To establish the Securities and Derivatives Commission in order to
combine the functions of the Commodity Futures Trading Commission and
the Securities and Exchange Commission in a single independent
regulatory commission.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
November 29, 2012
Mr. Frank of Massachusetts (for himself and Mr. Capuano) introduced the
following bill; which was referred to the Committee on Financial
Services, and in addition to the Committee on Agriculture, for a period
to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the
committee concerned
_______________________________________________________________________
A BILL
To establish the Securities and Derivatives Commission in order to
combine the functions of the Commodity Futures Trading Commission and
the Securities and Exchange Commission in a single independent
regulatory commission.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Markets and
Trading Reorganization Act''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Purposes.
Sec. 3. Definition.
TITLE I--ESTABLISHMENT OF COMMISSION
Sec. 101. Establishment.
Sec. 102. Members; appointment; terms.
Sec. 103. Organization of Commission.
TITLE II--TRANSFERS OF FUNCTIONS
Sec. 201. Commodity futures trading commission functions.
Sec. 202. Securities and exchange commission functions.
TITLE III--ADMINISTRATIVE PROVISIONS
Sec. 301. Personnel provisions.
Sec. 302. General administrative provisions.
TITLE IV--FEE AND FUNDING AUTHORITY
Sec. 401. Fees to cover costs of the Commission.
Sec. 402. Funding Authority of the Commission.
TITLE V--TRANSITIONAL, SAVINGS, AND CONFORMING PROVISIONS
Sec. 501. Savings provisions.
Sec. 502. Reference.
Sec. 503. Amendments.
TITLE VI--EFFECTIVE DATE
Sec. 601. Effective date.
SEC. 2. PURPOSES.
The purposes of this Act are--
(1) to establish a single Federal regulatory body with
jurisdiction over securities, derivatives, options, futures,
and related markets and instruments;
(2) to coordinate the regulation of relevant financial
markets;
(3) to strengthen investor confidence in United States
financial markets; and
(4) to ensure the efficiency and competitiveness of those
markets.
SEC. 3. DEFINITION.
As used in this Act, the term ``Commission'', other than where
expressly referring to the Securities and Exchange Commission or the
Commodity Futures Trading Commission, means the Securities and
Derivatives Commission established by section 101 of this Act.
TITLE I--ESTABLISHMENT OF COMMISSION
SEC. 101. ESTABLISHMENT.
There is established an independent regulatory commission to be
known as the Securities and Derivatives Commission.
SEC. 102. MEMBERS; APPOINTMENT; TERMS.
(a) Composition of Commission.--The Commission shall be composed of
5 commissioners appointed by the President, by and with the advice and
consent of the Senate. One of the commissioners shall be designated by
the President as chairperson. Not more than three of such commissioners
shall be members of the same political party. Each commissioner shall
be selected solely on the basis of integrity and demonstrated knowledge
of the operations of the markets subject to the jurisdiction of the
Commission.
(b) Qualifications.--In appointing commissioners under subsection
(a), the President shall--
(1) select persons who each have demonstrated knowledge of
securities, futures, swaps, or other derivatives, the
regulation of such instruments, or the markets for agricultural
or other types of commodities underlying transactions subject
to the oversight of the Commission under this Act; and
(2) seek to ensure that the demonstrated knowledge of the
commissioners is balanced with respect to such areas, with at
least one commissioner having knowledge of the agricultural
commodities market.
(c) Terms.--Each commissioner shall be appointed for a term of 5
years, except that a commissioner may continue to serve after the
expiration of such term until a successor is appointed and has
qualified.
(1) The terms of office of the commissioners first taking
office after the enactment of this Act shall expire, as
designated by the President at the time of their appointment--
(A) one at the end of 1 year;
(B) two at the end of 3 years; and
(C) two at the end of 5 years.
(2) Any commissioner appointed to fill a vacancy occurring
prior to the expiration of the term for which the predecessor
was appointed shall be appointed for the remainder of such
term.
SEC. 103. ORGANIZATION OF COMMISSION.
(a) Required Divisions.--The Commission shall establish the
principal divisions and subdivisions of the Commission, including, at a
minimum, the following three divisions:
(1) A Markets and Trading Division with oversight of market
conduct and utilities, the conduct of market professionals, and
self-regulatory organizations with regard to such market
professionals, including related examination functions.
(2) An Issuers and Financial Disclosures Division with
oversight of the issuance of securities, including investment
companies and related rules and examinations.
(3) An Enforcement Division responsible for the enforcement
of all rules of the Commission.
(b) Other Offices.--The Commission may establish such other offices
as it determines useful in the conduct of the Commission's affairs.
TITLE II--TRANSFERS OF FUNCTIONS
SEC. 201. COMMODITY FUTURES TRADING COMMISSION FUNCTIONS.
There are transferred to the Commission all functions of the
Commodity Futures Trading Commission and of any officer or component of
the Commodity Futures Trading Commission.
SEC. 202. SECURITIES AND EXCHANGE COMMISSION FUNCTIONS.
There are transferred to the Commission all functions of the
Securities and Exchange Commission and of any officer or component of
the Securities and Exchange Commission.
TITLE III--ADMINISTRATIVE PROVISIONS
SEC. 301. PERSONNEL PROVISIONS.
(a) Appointment and Compensation.--The Commission may appoint and
fix the compensation of such officers and employees as may be necessary
to carry out the functions of the Commission. Except as otherwise
provided by law, such officers and employees shall be appointed in
accordance with the civil service laws and the compensation of such
employees shall be fixed in accordance with section 4802 of title 5,
United States Code. The Commission shall, in accordance with such
section, adjust the compensation of employees so that the compensation
of employees transferred from the Commodity Futures Trading Commission
pursuant to subsection (b) and the compensation of employees
transferred from the Securities and Exchange Commission under such
subsection are aligned. In making such an adjustment, the Commission
shall not reduce the compensation of any employee.
(b) Transfer of Employees.--
(1) In general.--All employees of the Commodity Futures
Trading Commission and the Securities and Exchange Commission
shall be transferred to the Commission. Each employee to be
transferred under this subsection shall be transferred not
later than 90 days after the effective date set forth in
section 601.
(2) Employee status and functions.--
(A) Status.--The transfer of employees under this
section shall not affect the status of the transferred
employees as employees of an agency of the United
States under any provision of law. Each transferred
employee shall be placed in a position at the
Commission with the same status and tenure as the
transferred employee held on the day before the date on
which the employee was transferred.
(B) Functions.--To the extent practicable, each
transferred employee shall be placed in a position at
the Commission responsible for the same functions and
duties as the transferred employee had on the day
before the date on which the employee was transferred,
in accordance with the expertise and preferences of the
transferred employee.
(3) Personnel actions limited.--
(A) Protection.--Except as provided in subparagraph
(B), each transferred employee shall not, during the 3-
year period beginning on the transfer date, be
involuntarily separated, or involuntarily reassigned
outside his or her locality pay area.
(B) Exceptions.--Subparagraph (A) does not limit
the right of the Commission to--
(i) separate an employee for cause or for
unacceptable performance;
(ii) terminate an appointment to a position
excepted from the competitive service because
of its confidential policy-making, policy-
determining, or policy-advocating character; or
(iii) reassign an employee outside such
employee's locality pay area when the
Commission determines that the reassignment is
necessary for the efficient operation of the
Commission.
(4) Pay.--
(A) Protection.--
(i) In general.--Except as provided in
clause (ii), each transferred employee shall,
during the 3-year period beginning on the
designated transfer date, receive pay at a rate
equal to not less than the basic rate of pay
(including any geographic differential) that
the employee received during the pay period
immediately preceding the date of transfer.
(ii) Limitation.--Notwithstanding clause
(i), if the employee was receiving a higher
rate of basic pay on a temporary basis (because
of a temporary assignment, temporary promotion,
or other temporary action) immediately before
the date of transfer, the Commission may reduce
the rate of basic pay on the date on which the
rate would have been reduced but for the
transfer, and the protected rate for the
remainder of the 3-year period shall be the
reduced rate that would have applied, but for
the transfer.
(B) Exceptions.--Subparagraph (A) does not limit
the right of the Commission to reduce the rate of basic
pay of a transferred employee--
(i) for cause or for unacceptable
performance; or
(ii) with the consent of the employee.
(C) Protection only while employed.--Subparagraph
(A) applies to a transferred employee only while that
employee remains employed by the Commission.
(D) Pay increases permitted.--Subparagraph (A) does
not limit the authority of the Commission to increase
the pay of a transferred employee.
SEC. 302. GENERAL ADMINISTRATIVE PROVISIONS.
(a) General Authority.--In carrying out any function transferred by
this Act, the Commission, or any officer or employee of the Commission,
may exercise any authority available by law with respect to such
function to the official or agency from which such function is
transferred, and the actions of the Commission, or any officer or
employee of the Commission in exercising such authority shall have the
same force and effect as when exercised by such official or agency.
(b) Rules.--The Commission may prescribe such rules and regulations
as the Commission determines necessary or appropriate to administer and
manage the functions of the Commission.
(c) Contracts.--The Commission may make, enter into, and perform
such contracts, grants, leases, cooperative agreements, or other
similar transactions with Federal or other public agencies (including
State and local governments) and private organizations and persons, and
make such payments, by way of advance or reimbursement, as the
Commission may determine necessary or appropriate to carry out
functions of the Commission.
(d) Regional and Field Offices.--The Commission may establish,
alter, discontinue, or maintain such regional or other field offices as
the Commission may find necessary or appropriate to perform functions
of the Commission.
(e) Reserve Fund.--The Commission may obligate amounts in the
Reserve Fund established under section 4(i) of the Securities Exchange
Act of 1934 (15 U.S.C. 78d(i)), 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, including those transferred
by title II of this Act. 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 subsection, the
Commission shall notify Congress of the date, amount, and purpose of
the obligation.
TITLE IV--FEE AND FUNDING AUTHORITY
SEC. 401. FEES TO COVER COSTS OF THE COMMISSION.
(a) Imposition of Fees.--
(1) In general.--The Commission shall, by order, impose a
fee on each agreement, contract, or transaction that is a
contract of sale of a commodity for future delivery, an option
on such a contract, or a swap or securities-based swap, so that
the total of the fees so imposed during each fiscal year is
sufficient to cover the costs of the regulatory activities of
the Commission related to such instruments for each fiscal
year.
(2) Limitation.--The fees imposed under this subsection on
all transactions of the same kind shall be determined in a
uniform manner.
(3) Mid-year adjustment.--
(A) In general.--By March 1 of each fiscal year,
the Commission shall determine whether, based on the
fees collected under this subsection during the first 5
months of the fiscal year, the total of the amounts
collected and to be collected under this section for
the fiscal year is reasonably likely to be 10 percent
(or more) greater or less than the costs described in
paragraph (1) for the fiscal year. If the Commission so
determines, the Commission shall by order, no later
than March 1 of the fiscal year, adjust the fee rates
otherwise applicable under this subsection for the
fiscal year so that the total of the amounts so
collected and to be collected is reasonably likely to
equal to the costs so described.
(B) Effective date.--An adjusted rate prescribed
under subparagraph (A) of this paragraph in a fiscal
year shall take effect on the 1st day of the fiscal
year to which the rate applies.
(4) Publication.--The Commission shall publish in the
Federal Register notices of the fee rates applicable under this
subsection for a fiscal year not later than 30 days after such
rates are set, together with any estimates or projections on
which the fee rates are based.
(5) Inapplicability of rulemaking requirements.--In
exercising its authority under this subsection, the Commission
shall not be required to comply with section 553 of title 5,
United States Code.
(6) No judicial review.--A fee rate prescribed under this
subsection and published in accordance with paragraph (4) shall
not be subject to judicial review.
(b) Payment and Collection of Fees.--
(1) Cleared transactions; uncleared swaps reported to swap
data repositories.--
(A) Payment of fees.--
(i) Cleared transactions.--In the case of a
contract of sale of a commodity for future
delivery, an option on such a contract, or a
swap or securities-based swap that is cleared
by a derivatives clearing organization
registered or exempt from registration under
the Commodity Exchange Act or by a clearing
agency registered or exempt from registration
under the Securities Exchange Act of 1934, as
applicable, each party to the agreement,
contract, or transaction shall pay the fee
determined under subsection (a) to the
derivatives clearing organization or clearing
agency, as applicable.
(ii) Uncleared swaps reported to swap data
repositories.--In the case of a swap or
securities-based swap that is not cleared by a
derivatives clearing organization registered or
exempt from registration under the Commodity
Exchange Act or by a clearing agency registered
or exempt from registration under the
Securities Exchange Act of 1934 and that is
accepted by a swap data repository registered
under section 21 of the Commodity Exchange Act
(7 U.S.C. 24a) or a securities-based swap data
repository registered under section 13n of the
Securities Exchange Act of 1934 (15 U.S.C.
78m(n)), as applicable, each party to the swap
or securities-based swap shall pay the
transaction fee determined under subsection (a)
to the swap data repository or securities-based
swap data repository.
(B) Collection of fees.--The Commission shall
collect the fees paid in accordance with subparagraph
(A) in such manner and within such time as the
Commission determines appropriate.
(2) Uncleared swaps reported to commission.--In the case of
a swap or securities-based swap that is not cleared by a
derivatives clearing organization or a clearing agency
registered or exempt from registration under the Commodity
Exchange Act or the Securities Exchange Act of 1934 and that is
reported to the Commission pursuant to such Acts, each party to
the swap or securities-based swap shall pay the fee determined
under subsection (a) to the Commission in a manner and within
such time as the Commission determines appropriate.
SEC. 402. FUNDING AUTHORITY OF THE COMMISSION.
(a) Commodity Futures Trading Commission.--Section 12 of the
Commodity Exchange Act (7 U.S.C. 16) is amended--
(1) in subsection (b)(1), by striking ``and as may be from
time to time appropriated for by Congress'';
(2) by striking subsection (d); and
(3) in subsection (f)(3), by striking ``Any payment or
reimbursement accepted shall be considered a reimbursement to
the appropriated funds of the Commission.'' and inserting
``Such payments or reimbursements shall be available to the
Commission without further appropriation.''.
(b) Securities Exchange Commission.--Section 31 of the Securities
Exchange Act of 1934 (15 U.S.C. 78ee) is amended--
(1) in subsection (a)--
(A) in the heading for such subsection, by striking
``Recovery of Costs of Annual Appropriation'' and
inserting ``In General''; and
(B) by striking ``recover the costs to the
Government of the annual appropriation to the
Commission by Congress'' and inserting ``cover the
costs to the Commission for the supervision and
regulation of securities markets and securities
professionals, and use such fees and assessments
without further appropriation'';
(2) by striking subsection (i);
(3) in subsection (j)--
(A) by striking ``regular appropriation to the
Commission by Congress'' each place such term appears
and inserting ``target offsetting collection amount'';
and
(B) by amending paragraph (4)(A) to read as
follows:
``(A) Annual adjustment.--An adjusted rate
prescribed under paragraph (1) shall take effect on the
first day of the fiscal year to which such rate
applies.''; and
(4) by striking subsection (k).
TITLE V--TRANSITIONAL, SAVINGS, AND CONFORMING PROVISIONS
SEC. 501. SAVINGS PROVISIONS.
(a) Continuity of Legal Instruments.--All orders, determinations,
rules, regulations, permits, grants, contracts, certificates, licenses,
and privileges--
(1) which have been issued, made, granted, or allowed to
become effective by the President, the Securities and Exchange
Commission, or the Commodity Futures Trading Commission, or any
component thereof, or by a court of competent jurisdiction, in
the performance of functions which are transferred under this
Act to the Commission, and
(2) which are in effect at the time this Act takes effect,
shall continue in effect according to their terms until modified,
terminated, superseded, set aside, or revoked in accordance with the
law by the President, the Commission, or other authorized official, a
court of competent jurisdiction, or by operation of law.
(b) Continuity of Proceedings.--
(1) In general.--The provisions of this Act shall not
affect any proceedings, including notices of proposed
rulemaking, or any application for any license, permit,
certificate, or financial assistance pending on the effective
date of this Act before either the Securities and Exchange
Commission or the Commodity Futures Trading Commission, or any
component thereof, functions of which are transferred by this
Act. Such proceedings and applications, to the extent that they
relate to functions so transferred, shall be continued. Orders
shall be issued in such proceedings, appeals shall be taken
therefrom, and payments shall be made pursuant to such orders,
as if this Act had not been enacted and orders issued in any
such proceedings shall continue in effect until modified,
terminated, superseded, or revoked by the Commission, by a
court of competent jurisdiction, or by operation of law.
Nothing in this subsection shall be construed to prohibit the
discontinuance or modification of any such proceeding under the
same terms and conditions and to the same extent that such
proceeding could have been discontinued or modified if this Act
had not been enacted.
(2) Regulations concerning transfers.--The Commission may
prescribe regulations providing for the orderly transfer of
proceedings continued under paragraph (1) to the Commission.
(c) Pending Litigation.--Except as provided in subsection (e)--
(1) the provisions of this Act shall not affect suits
commenced prior to the effective date of this Act; and
(2) in all such suits, proceedings shall be had, appeals
taken, and judgments rendered in the same manner and effect as
if this Act had not been enacted.
(d) Nonabatement.--No suit, action, or other proceeding commenced
by or against any officer in the official capacity of such individual
as an officer of the Securities and Exchange Commission or the
Commodity Futures Trading Commission, or any component thereof,
functions of which are transferred by this Act, shall abate by reason
of the enactment of this Act. No cause of action by or against any
department or agency, functions of which are transferred by this Act,
or by or against any officer thereof in the official capacity of such
officer shall abate by reason of the enactment of this Act.
(e) Substitution of Parties.--If, before the date on which this Act
takes effect, the Securities and Exchange Commission or the Commodity
Futures Trading Commission, or any component thereof, or officer
thereof in the official capacity of such officer, is a party to a suit,
and under this Act any function of such department, agency, or officer
is transferred to the Commission or any other official of the
Commission, then such suit shall be continued with the Commission or
other appropriate official of the Commission substituted or added as a
party.
(f) Judicial Review as Required by Existing Law.--Orders and
actions of the Commission in the exercise of functions transferred
under this Act shall be subject to judicial review to the same extent
and in the same manner as if such orders and actions had been by the
agency or office, or part thereof, exercising such functions
immediately preceding their transfer. Any statutory requirements
relating to notice, hearings, action upon the record, or administrative
review that apply to any function transferred by this Act shall apply
to the exercise of such function by the Commission.
SEC. 502. REFERENCE.
Any reference in any other Federal law to the Securities and
Exchange Commission or the Commodity Futures Trading Commission shall
be deemed a reference to the Securities and Derivatives Commission
established by this Act.
SEC. 503. AMENDMENTS.
(a) Executive Schedule Salaries.--
(1) Chairperson.--Section 5314 of title 5, United States
Code, is amended--
(A) by striking ``Chairman, Securities and Exchange
Commission.'' and inserting ``Chairperson, Securities
and Derivatives Commission.''; and
(B) by striking ``Chairman, Commodity Futures
Trading Commission.''.
(2) Members.--Section 5315 of title 5, United States Code,
is amended--
(A) by striking ``Members, Securities and Exchange
Commission'' and inserting ``Members, Securities and
Derivatives Commission''; and
(B) by striking ``Members, Commodity Futures
Trading Commission.''.
(b) Conforming Amendments.--
(1) Securities exchange act.--Sections 4(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78d(a)) is amended--
(A) by striking ``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.''; and
(B) by striking ``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.''.
(2) Commodity exchange act.--Section 2(a) of the Commodity
Exchange Act (7 U.S.C. 2a) is amended by striking paragraphs
(2), (3), and (4).
(3) Dodd-frank.--Section 111(b)(1) of the Dodd-Frank Wall
Street Reform and Consumer Protection Act (12 U.S.C.
5321(b)(1)) is amended--
(A) by amending subparagraph (E) to read as
follows:
``(E) the Chairperson of the Securities and
Derivatives Commission;'';
(B) by striking subparagraph (G); and
(C) by redesignating subparagraphs (H), (I), and
(J) as subparagraphs (G), (H), and (I), respectively.
TITLE VI--EFFECTIVE DATE
SEC. 601. EFFECTIVE DATE.
The provisions of this Act shall take effect 1 year after the date
of enactment of this Act, except that the President may nominate and
the Senate confirm Commissioners prior to such date.
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