[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 5139 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
2d Session
S. 5139
To amend the Securities Act of 1933 to address emerging growth
companies, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
September 23, 2024
Mr. Scott of South Carolina (for himself, Mr. Crapo, Mr. Rounds, Mr.
Tillis, Mr. Kennedy, Mr. Hagerty, Ms. Lummis, Mrs. Britt, Mr. Cramer,
Mr. Daines, and Mr. Moran) introduced the following bill; which was
read twice and referred to the Committee on Banking, Housing, and Urban
Affairs
_______________________________________________________________________
A BILL
To amend the Securities Act of 1933 to address emerging growth
companies, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Empowering Main
Street in America Act of 2024''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definition.
TITLE I--PROMOTING GREATER CAPITAL FORMATION IN U.S. PUBLIC AND PRIVATE
MARKETS
Sec. 101. Helping startups continue to grow.
Sec. 102. Micro-offering exemption.
Sec. 103. Investment companies.
Sec. 104. Public float.
Sec. 105. Crowdfunding.
Sec. 106. Regulatory definition of venture capital fund.
Sec. 107. Unlocking capital for small businesses.
Sec. 108. Rural job creators.
Sec. 109. Studies, reports, and rules regarding small entities.
TITLE II--RESPONSIBLY EXPANDING INVESTMENT OPPORTUNITIES FOR RETAIL
INVESTORS
Sec. 201. Equal opportunity for all investors.
Sec. 202. Encouraging investments in Main Street.
Sec. 203. Main Street investor confidence.
Sec. 204. Increasing investor opportunities.
Sec. 205. Enhancement of 403(b) plans.
TITLE III--FOSTERING INVESTOR CONFIDENCE IN MARKET INTEGRITY, FAIRNESS,
AND TRANSPARENCY
Sec. 301. Study regarding retail investor readability of financial
statements.
Sec. 302. Duties of Ombudsman relating to Regulation Crowdfunding.
Sec. 303. Publication on economic data on securities markets.
Sec. 304. Study on IPO fees.
Sec. 305. Exclusions available regardless of significant social policy
issue.
TITLE IV--HOLDING REGULATORS ACCOUNTABLE THROUGH INCREASED OVERSIGHT
Sec. 401. Required testimony.
Sec. 402. Semiannual report.
Sec. 403. Rulemaking requirements.
Sec. 404. Senate confirmation of Inspector General of the Securities
and Exchange Commission.
SEC. 2. DEFINITION.
In this Act, the term ``Commission'' means the Securities and
Exchange Commission.
TITLE I--PROMOTING GREATER CAPITAL FORMATION IN U.S. PUBLIC AND PRIVATE
MARKETS
SEC. 101. HELPING STARTUPS CONTINUE TO GROW.
(a) Definition of Term.--
(1) Securities act of 1933.--Section 2(a) of the Securities
Act of 1933 (15 U.S.C. 77b(a)) is amended by striking paragraph
(19) and inserting the following:
``(19)(A) The term `emerging growth company' means an
issuer that had total annual gross revenues of less than
$2,000,000,000 (as such amount is indexed for inflation every 5
years by the Commission to reflect the change in the Consumer
Price Index for All Urban Consumers published by the Bureau of
Labor Statistics, setting the threshold to the nearest
1,000,000) during its most recently completed fiscal year.
``(B) An issuer that is an emerging growth company as of
the first day of its most recently completed fiscal year shall,
after submitting a draft registration statement or publicly
filing an initial registration statement under this title,
continue to be deemed an emerging growth company until the
earliest of--
``(i) the date that is 1 fiscal year after the last
day of the fiscal year of the issuer during which it
had total annual gross revenues of $2,000,000,000 (as
such amount is indexed for inflation every 5 years by
the Commission to reflect the change in the Consumer
Price Index for All Urban Consumers published by the
Bureau of Labor Statistics, setting the threshold to
the nearest 1,000,000) or more;
``(ii) the last day of the fiscal year of the
issuer following the tenth anniversary of the date of
the first primary sale of common equity securities of
the issuer for cash pursuant to an effective
registration statement under this title; or
``(iii) the date that is 1 fiscal year after the
last day of the fiscal year of the issuer in which such
issuer has more than $2,000,000,000 (as such amount is
indexed for inflation every 5 years by the Commission
to reflect the change in the Consumer Price Index for
All Urban Consumers published by the Bureau of Labor
Statistics, setting the threshold to the nearest
1,000,000) in non-convertible debt securities
outstanding.''.
(2) Securities exchange act of 1934.--Section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended--
(A) by striking the first paragraph (80) (relating
to emerging growth companies);
(B) by transferring paragraph (79) (relating to
asset-backed securities) to appear after paragraph
(78); and
(C) by adding at the end the following:
``(81) Emerging growth company.--The term `emerging growth
company' has the meaning given the term in section 2(a) of the
Securities Act of 1933 (15 U.S.C. 77b(a)).''.
(3) Rule of application.--The amendments made by this
subsection shall apply with respect to an issuer that--
(A) qualifies as an emerging growth company, as
defined in section 2(a) of the Securities Act of 1933
(15 U.S.C. 77b(a)) or the first paragraph (80) of
section 3(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)), as applicable, on the day before the
date of enactment of this Act; or
(B) first qualifies as an emerging growth company,
as defined in such section 2(a) or paragraph (81) of
such section 3(a) (as added by paragraph (2) of this
subsection), as applicable, on or after the date of
enactment of this Act.
(b) Registration.--Section 6(e)(1) of the Securities Act of 1933
(15 U.S.C. 77f(e)(1)) is amended by striking the second sentence.
SEC. 102. MICRO-OFFERING EXEMPTION.
(a) In General.--Section 4 of the Securities Act of 1933 (15 U.S.C.
77d) is amended--
(1) in subsection (a), by adding at the end the following:
``(8) transactions meeting the requirements of subsection
(f).''; and
(2) by adding at the end the following:
``(f) Micro-Offerings.--
``(1) In general.--The transactions referred to in
subsection (a)(8) are transactions involving the sale of
securities by an issuer (including all entities controlled by
or under common control with the issuer) where the aggregate
amount of all securities sold by the issuer, including any
amount sold in reliance on the exemption provided under
subsection (a)(8), during the 12-month period preceding such
transaction, does not exceed $500,000.
``(2) Adjustment.--The dollar amount in paragraph (1) shall
be adjusted by the Commission not less frequently than once
every 5 years and at the same time as the adjustments made
under section 4A(h), by notice published in the Federal
Register to reflect any change in the Consumer Price Index for
All Urban Consumers published by the Bureau of Labor
Statistics, setting the threshold to the nearest $10,000.
``(3) Bad actor prohibition.--The exemption under this
subsection shall not apply to any person subject to--
``(A) an event that would disqualify an issuer or
other covered person under section 230.506(d)(1) of
title 17, Code of Federal Regulations, or any successor
regulation; or
``(B) a statutory disqualification, as defined in
section 3(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)).''.
(b) Exemption Under State Regulations.--Section 18(b)(4) of the
Securities Act of 1933 (15 U.S.C. 77r(b)(4)) is amended--
(1) in subparagraph (F), by striking ``or'' at the end;
(2) in subparagraph (G), by striking the period and
inserting ``; or''; and
(3) by adding at the end the following:
``(H) section 4(a)(8).''.
SEC. 103. INVESTMENT COMPANIES.
Section 3(c)(1) of the Investment Company Act of 1940 (15 U.S.C.
80a-3(c)(1)) is amended--
(1) in the matter preceding subparagraph (A), in the first
sentence, by striking ``250 persons'' and inserting ``500
persons''; and
(2) in subparagraph (C)(i)--
(A) by striking ``$10,000,000'' and inserting
``$50,000,000''; and
(B) by striking ``with such dollar amount to be
indexed for inflation once every 5 years by the
Commission, beginning from a measurement made by the
Commission on a date selected by the Commission,
rounded to the nearest $1,000,000'' and inserting the
following: ``which the Commission shall adjust not less
frequently than once every 5 years by notice published
in the Federal Register to reflect any change in the
Consumer Price Index for All Urban Consumers published
by the Bureau of Labor Statistics, setting the
threshold to the nearest $10,000''.
SEC. 104. PUBLIC FLOAT.
Not later than 180 days after the date of enactment of this Act,
the Commission shall amend section 229.10(f)(1)(i) of title 17, Code of
Federal Regulations, or any successor regulation, to provide that the
threshold in that provision shall be a 12-month rolling average of
$700,000,000 (which the Commission shall index for inflation once every
5 years to reflect the change in the Consumer Price Index for All Urban
Consumers published by the Bureau of Labor Statistics, setting the
threshold to the nearest $100,000).
SEC. 105. CROWDFUNDING.
Notwithstanding any other provision of law or regulation, with
respect to a transaction described in section 4(a)(6) of the Securities
Act of 1933 (15 U.S.C. 77d(a)(6)), the following shall apply:
(1) If the transaction involves an offer or sale of
securities by an issuer that is not more than $500,000, the
issuer--
(A) shall not be required to submit a review report
of a public accountant that is independent of the
issuer; and
(B) may provide financial statements and certain
other information that is based on information reported
on the Federal income tax return of the issuer for the
most recently completed year (if any), if--
(i) reviewed or audited financial
statements are not available; and
(ii) those financial statements, and that
other information, is certified by the
principal executive officer of the issuer to be
true and complete in all material respects.
(2) A person described in subsection (b) or (c) of section
3 of the Investment Company Act of 1940 (15 U.S.C. 80a-3) may
purchase the securities that are offered or sold in that
transaction.
SEC. 106. REGULATORY DEFINITION OF VENTURE CAPITAL FUND.
Not later than 180 days after the date of enactment of this Act,
the Commission shall--
(1) amend the definition of a qualifying investment under
paragraph (c) of section 275.203(l)-1 of title 17, Code of
Federal Regulations, or any successor regulation--
(A) to include an equity security issued by a
qualifying portfolio company, whether acquired directly
from the company or in a secondary acquisition; and
(B) to specify that an investment in another
venture capital fund is a qualifying investment under
that definition; and
(2) amend paragraph (a) of section 275.203(l)-1 of title
17, Code of Federal Regulations, or any successor regulation,
to require, as a condition of a private fund qualifying as a
venture capital fund under that paragraph, that the qualifying
investments of the private fund are--
(A) predominantly qualifying investments that were
acquired directly from a qualifying portfolio company;
or
(B) predominantly qualifying investments in another
venture capital fund or other venture capital funds.
SEC. 107. UNLOCKING CAPITAL FOR SMALL BUSINESSES.
(a) Safe Harbors for Finders and Private Placement Brokers.--
(1) In general.--Section 15 of the Securities Exchange Act
of 1934 (15 U.S.C. 78o) is amended by adding at the end the
following:
``(p) Finder Safe Harbor.--
``(1) Disclosures required.--Before the consummation of a
transaction effecting a private placement, a finder shall
disclose clearly and conspicuously, in writing, to all parties
to the transaction as a result of the activities of the
finder--
``(A) that the finder is acting as a finder;
``(B) the amount of any compensation or anticipated
compensation in any form for services rendered as a
finder in connection with such transaction;
``(C) the person entitled to receive any
compensation described in subparagraph (B); and
``(D) any beneficial interest in the issuer, direct
or indirect, of the finder, of a member of the
immediate family of the finder, of an associated person
of the finder, or of a member of the immediate family
of such associated person before the consummation of
the transaction effecting the private placement or
anticipated to be held following the consummation of
the transaction.
``(2) Definitions.--In this subsection:
``(A) Finder.--The term `finder' means a person
that--
``(i) receives transaction-based
compensation--
``(I) for effecting a transaction
by--
``(aa) introducing an
issuer or owner of securities
and a buyer of such securities
in connection with the sale of
a business effected as the sale
of securities; or
``(bb) introducing an
issuer or owner of securities
and a buyer of those securities
in connection with the
placement of securities in
transactions that are exempt
from the registration
requirements under the
Securities Act of 1933 (15
U.S.C. 77a et seq.); and
``(II) that is not with respect
to--
``(aa) a class of publicly
traded securities;
``(bb) the securities of an
investment company, as defined
in section 3 of the Investment
Company Act of 1940 (15 U.S.C.
80a-3); or
``(cc) a variable or
equity-indexed annuity or other
variable or equity-indexed life
insurance product;
``(ii) with respect to a transaction for
which such transaction-based compensation is
received--
``(I) does not handle or take
possession of the funds or securities;
``(II) does not engage in an
activity that requires registration as
an investment adviser under State or
Federal law; and
``(III) is not subject to a
statutory disqualification; and
``(iii) is not a private placement broker,
as defined in subsection (q)(3).
``(B) Private placement.--The term `private
placement' means a transaction described in section
4(a)(2) of the Securities Act of 1933 (15 U.S.C.
77d(a)(2)).
``(q) Private Placement Broker Safe Harbor.--
``(1) Registration requirements.--
``(A) In general.--Not later than 270 days after
the date of enactment of this subsection, the
Commission shall propose regulations with respect to
private placement brokers.
``(B) Restriction.--The regulations proposed under
subparagraph (A) may not require a private placement
broker to comply with any net capital requirement, have
a financial principal, or have or produce for
examination by any regulatory authority audited
financial statements of the private placement broker.
``(C) Final regulations.--Not later than 270 days
after the date on which the Commission publishes in the
Federal Register the proposed regulations under
subparagraph (A), the Commission shall promulgate final
versions of those regulations.
``(2) National securities associations.--
``(A) In general.--Not later than 270 days after
the date of enactment of this subsection, the
Commission shall promulgate regulations that require
the rules of any national securities association to
allow a private placement broker to become a member of
that national securities association, subject to
reduced membership requirements consistent with this
subsection.
``(B) Final regulations.--Not later than 270 days
after the publication of the proposed regulations in
the Federal Register, the Commission shall promulgate
final versions of the regulations described in
subparagraph (A).
``(3) Definition.--
``(A) In general.--In this subsection, the term
`private placement broker' means a person that--
``(i) receives transaction-based
compensation in connection with the sale of a
business effected as the sale of securities or
in connection with the placement of securities
in transactions that are exempt from the
registration requirements under the Securities
Act of 1933 (15 U.S.C. 77a et seq.) with
respect to a transaction for which transaction-
based compensation is received; and
``(ii) with respect to the transaction-
based compensation described in clause (i),
receives that compensation--
``(I) in an amount that is not more
than $500,000 in any calendar year;
``(II) in connection with
transactions that result in a single
issuer selling securities valued at not
more than $15,000,000 in any calendar
year;
``(III) in connection with
transactions that result in any
combination of issuers selling
securities valued at not more than
$30,000,000 in any calendar year; or
``(IV) in connection with fewer
than 16 transactions that are not part
of the same offering or are otherwise
unrelated in any calendar year.
``(B) Adjustment for inflation.--The amounts
described in subparagraph (A)(ii) shall be increased
each year by an amount equal to the percentage
increase, if any, in the Consumer Price Index, as
determined by the Department of Labor or its
successor.''.
(2) Validity of contracts with registered finders and
private placement brokers.--Section 29 of the Securities
Exchange Act of 1934 (15 U.S.C. 78cc) is amended by adding at
the end the following:
``(d) Subsection (b) shall not apply to a contract made for a
transaction if--
``(1) the transaction is one in which the issuer engaged
the services of a finder (as defined in section 15(p)(2)) that
is not registered under this title or a private placement
broker (as defined in section 15(q)(3)) with respect to that
transaction;
``(2) the issuer received a self-certification from a
finder or private placement broker described in paragraph (1)
certifying that such finder or private placement broker is a
finder under section 15(p) or a registered private placement
broker under section 15(q); and
``(3) the issuer--
``(A) did not know that the self-certification
described in paragraph (2) was false; or
``(B) did not have a reasonable basis to believe
that the self-certification described in paragraph (2)
was false.''.
(3) Removal of finders from definitions of broker.--
(A) Records and reports on monetary instruments
transactions.--Section 5312(a)(2)(G) of title 31,
United States Code, is amended by inserting ``with the
exception of a finder, as defined in subsection (p)(2)
of section 15 of that Act (15 U.S.C. 78o)'' before the
semicolon at the end.
(B) Securities exchange act of 1934.--Section
3(a)(4) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)(4)) is amended by adding at the end the
following:
``(G) Finders.--A finder, as defined in section
15(p)(2), is not a broker for the purposes of this
Act.''.
(b) Limitations on State Law.--Section 15(i) of the Securities
Exchange Act of 1934 (15 U.S.C. 78o(i)) is amended--
(1) in paragraph (3), in the matter preceding subparagraph
(A), by striking ``paragraph (3)'' and inserting ``paragraph
(5)'';
(2) by redesignating paragraph (4) as paragraph (5); and
(3) by inserting after paragraph (3) the following:
``(4) Finders and private placement brokers.--
``(A) In general.--No State or political
subdivision thereof may enforce any law, rule,
regulation, or other administrative action that imposes
greater registration, audit, financial recordkeeping,
or reporting requirements on a finder or private
placement broker than those that are required under
subsections (p) and (q), respectively.
``(B) Electronic access.--Each State--
``(i) shall have electronic access to any
registration filed with the Commission by a
private placement broker; and
``(ii) may require a written notice from a
finder operating from within that State, or
communicating with potential investors that are
citizens or residents of that State, that
provides the name, principal place of business,
telephone number, and email address of the
finder, which shall be transmitted to the State
before the consummation of a transaction--
``(I) in the finder's State of
residence; or
``(II) involving a party to the
transaction that is a citizen or
resident of the State described in
subclause (I).
``(C) Definitions.--In this paragraph, the terms
`finder' and `private placement broker' have the
meanings given those terms in subsections (p)(2) and
(q)(3) of section 15, respectively.''.
SEC. 108. RURAL JOB CREATORS.
Section 4(j) of the Securities Exchange Act of 1934 (15 U.S.C.
78d(j)) is amended--
(1) in paragraph (4)(C), by inserting ``rural-area small
businesses,'' after ``women-owned small businesses,''; and
(2) in paragraph (6)(B)(iii), by inserting ``rural-area
small businesses,'' after ``women-owned small businesses,''.
SEC. 109. STUDIES, REPORTS, AND RULES REGARDING SMALL ENTITIES.
(a) Definition.--In this section, the term ``small entity''--
(1) has the meaning given the term in section 601 of title
5, United States Code, with respect to the activities of the
Commission; and
(2) includes any definition established by the Commission
of the term ``small business'', ``small organization'', or
``small governmental jurisdiction'' under paragraph (3), (4),
or (5), respectively, of section 601 of title 5, United States
Code, with respect to the activities of the Commission.
(b) Studies and Reports.--Not later than 1 year after the date of
enactment of this Act, and every 5 years thereafter, the Commission
shall--
(1) conduct a study of the definition of the term ``small
entity'' with respect to the activities of the Commission for
the purposes of chapter 6 of title 5, United States Code, which
shall consider--
(A) the extent to which the definition of the term
``small entity'', as in effect during the period in
which the study is conducted, aligns with the findings
and declarations made under section 2(a) of the
Regulatory Flexibility Act (5 U.S.C. 601 note);
(B) the amount by which financial markets in the
United States have grown since the last time the
Commission amended the definition of the term ``small
entity'', if applicable; and
(C) how the Commission should define the term
``small entity'' to ensure that a meaningful number of
entities would fall under that definition; and
(2) submit to Congress a report that includes--
(A) the results of the applicable study conducted
under paragraph (1); and
(B) specific and detailed recommendations on the
ways in which the Commission could amend the definition
of the term ``small entity'' to--
(i) be consistent with the results
described in subparagraph (A); and
(ii) expand the number of entities covered
by that definition.
(c) Rulemaking.--After the completion of each study required under
subsection (b), the Commission shall, subject to public notice and
comment, revise the rules of the Commission consistent with the results
of the study.
(d) Inflation Adjustments.--As soon as practicable following the
date of enactment of this Act, and every 5 years thereafter, the
Commission shall adjust all dollar figures under the definition of
small entity established by the Commission to reflect the change in the
Consumer Price Index for All Urban Consumers published by the Bureau of
Labor Statistics of the Department of Labor.
TITLE II--RESPONSIBLY EXPANDING INVESTMENT OPPORTUNITIES FOR RETAIL
INVESTORS
SEC. 201. EQUAL OPPORTUNITY FOR ALL INVESTORS.
(a) Certification Examinations for Accredited Investors.--
(1) Examination alternative.--Section 2(a)(15) of the
Securities Act of 1933 (15 U.S.C. 77b(a)(15)) is amended--
(A) by redesignating clauses (i) and (ii) as
subparagraphs (A) and (B), respectively;
(B) in subparagraph (A), as so redesignated, by
striking ``adviser; or'' and inserting ``adviser;'';
(C) in subparagraph (B), as so redesignated, by
striking the period at the end and inserting ``; or'';
and
(D) by adding at the end the following:
``(C) any individual who is certified as an
accredited investor through an examination established
or approved by the Commission, the securities
commission (or any agency or office performing like
functions) of any State, or any self-regulatory
organization as defined in the Securities Exchange Act
of 1934 (15 U.S.C. 78c(a)(26)) that--
``(i) measures whether an individual
certified as an accredited investor pursuant to
such examination understands and appreciates
the risks and opportunities of investing in
securities;
``(ii) is designed to ensure that an
individual with financial sophistication or
training would be unlikely to fail; and
``(iii) may be designed or administered by
any other person approved by the Commission,
such securities commission, or such self-
regulatory organization.''.
(2) Effective date.--The amendments made by paragraph (1)
shall take effect on the date of enactment of this Act.
(3) Examination.--The Commission shall establish or approve
an examination that complies with paragraph (1) no later than
18 months after the date of enactment of this Act.
(b) Accredited Investor Self-Certification.--Section 4(b) of the
Securities Act of 1933 (15 U.S.C. 77d(b)) is amended by inserting
``Unless the issuer knows, or has a reckless disregard for whether, the
purchaser is not an accredited investor, obtaining a self-certification
from the purchaser that the purchaser meets the income or net worth
requirements of Rule 501 of Regulation D shall constitute reasonable
steps to verify that purchasers of the securities are accredited
investors.'' after the period at the end.
(c) Modification of Rules.--
(1) In general.--Not later than 270 days after the date of
enactment of this Act, the Commission shall revise section
230.501(a) of title 17, Code of Federal Regulations, or any
successor regulation, to make parallel changes set forth in
subsection (a) of this section, and the amendments made by that
subsection, and to add to the definition of the term
``accredited investor'' the following categories:
(A) Any natural person with at least $500,000 worth
of investments.
(B) Any natural person with total transactions
during a 12-month period under section 230.506 of title
17, Code of Federal Regulations, and under section
4(a)(6) of the Securities Act of 1933 (15 U.S.C.
77d(a)(6)) that are not greater than the highest amount
of the following:
(i) 10 percent of the total investments of
the person.
(ii) 10 percent of the annual income of the
person or 10 percent of the annual combined
income with that person's spouse.
(iii) 10 percent of the net worth of the
person excluding the value of the person's
principal place of residence.
(2) Definitions.--
(A) Definitions.--In this subsection:
(i) Cash and cash equivalents.--The term
``cash and cash equivalents'' includes--
(I) bank deposits, certificates of
deposit, bankers acceptances and
similar bank instruments held for
investment purposes; and
(II) the net cash surrender value
of an insurance policy.
(ii) Commodity interests.--The term
``commodity interests'' means commodity futures
contracts, options on commodity futures
contracts, and options on physical commodities
traded on or subject to the rules of--
(I) any contract market designated
for trading such transactions under the
Commodity Exchange Act (7 U.S.C. 1 et
seq.) and the rules issued under that
Act; or
(II) any board of trade or exchange
outside the United States, as described
in part 30 of title 17, Code of Federal
Regulations.
(iii) Digital assets.--The term ``digital
assets''--
(I) means a digital representation
of value that--
(aa) is used as a medium of
exchange, unit of account, or
store of value; and
(bb) is not legal tender,
whether or not denominated in
legal tender; and
(II) does not include--
(aa) a transaction in which
a merchant grants, as part of
an affinity or rewards program,
value that cannot be taken from
or exchanged with the merchant
for legal tender, bank credit,
or virtual currency; or
(bb) a digital
representation of value issued
by or on behalf of a publisher
and used solely within an
online game, game platform, or
family of games sold by the
same publisher or offered on
the same game platform.
(iv) Investment purposes.--The term
``investment purposes''--
(I) includes--
(aa) real estate owned by a
prospective purchaser who is
engaged primarily in the
business of investing, trading,
or developing real estate in
connection with such business;
and
(bb) a commodity interest
or physical commodity owned, or
a financial contract entered
into, by the prospective
purchaser who is engaged
primarily in the business of
investing, reinvesting, or
trading in commodity interests,
physical commodities, or
financial contracts in
connection with such business;
and
(II) does not include real estate
held for investment purposes by a
prospective purchaser if the real
estate is used by the prospective
purchaser, a sibling, spouse or former
spouse, a direct lineal descendant by
birth or adoption, or spouse of such
lineal descendant or ancestor for
personal purposes or as a place of
business, or in connection with the
conduct of the trade or business of the
prospective purchaser or such related
person.
(v) Investments.--The term ``investments''
means--
(I) securities, as defined in
section 2(a) of the Securities Act of
1933 (15 U.S.C. 77b(a)), other than
securities issued by an issuer that is
controlled by the prospective purchaser
that owns such securities;
(II) real estate held for
investment purposes;
(III) commodity interests held for
investment purposes;
(IV) physical commodities held for
investment purposes;
(V) digital assets held for
investment purposes;
(VI) to the extent not securities,
financial contracts (as such term is
defined in section 3(c)(2)(B)(ii) of
the Investment Company Act of 1940 (15
U.S.C. 80a-3(c)(2)(B)(ii))) entered
into for investment purposes; and
(VII) cash and cash equivalents
(including foreign currencies) held for
investment purposes.
(vi) Personal purposes.--The term
``personal purposes'' does not include
residential real estate if deductions with
respect to such real estate are not disallowed
by section 280A of the Internal Revenue Code of
1986.
(vii) Physical commodities.--The term
``physical commodities'' means any physical
commodity with respect to which a commodity
interest is traded on a market described in
clause (ii)(I).
(B) Self-execution.--If the Commission does not
revise its rules in accordance with the deadline set
forth in paragraph (1), then any person described in
paragraph (2) shall be deemed to be an accredited
investor for all purposes under the Federal securities
laws (including regulations).
(d) Adjusting the Accredited Investor Standard.--Section 413 of the
Private Fund Investment Advisers Registration Act of 2010 (15 U.S.C.
77b note) is amended by striking subsection (b) and inserting the
following:
``(b) Review and Adjustment.--
``(1) In general.--The Commission may undertake a review of
the definition of the term `accredited investor', as such term
applies to natural persons, to determine whether the
requirements of the definition, excluding the requirement
relating to the net worth standard described in subsection (a),
should be adjusted or modified for the protection of investors,
in the public interest, and in light of the economy.
``(2) Adjustment or modification.--Upon completion of a
review under paragraph (1), the Commission may, by notice and
comment rulemaking, make such adjustments to the definition of
the term `accredited investor', excluding adjusting or
modifying the requirement relating to the net worth standard
described in subsection (a), as such term applies to natural
persons, as the Commission may deem appropriate for the
protection of investors, in the public interest, and in light
of the economy.''.
SEC. 202. ENCOURAGING INVESTMENTS IN MAIN STREET.
(a) In General.--Not later than 180 days after the date of
enactment of this Act, the Commission, in consultation with the
Secretary of Labor, shall conduct a study that examines the impact of
limiting retail investors and defined contribution plans (as defined in
section 3 of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1002)) from investing in private placements, which shall
consider--
(1) the growth of private markets;
(2) the overall decline in the number of issuers, the
securities of which are listed on national securities
exchanges;
(3) the impact of retail investors having fewer investment
opportunities;
(4) the benefits of fiduciary management; and
(5) the benefits of investment diversification and improve
investment growth opportunities for long-term investors.
(b) Report.--Not later than 1 year after the date of enactment of
this Act, the Commission shall submit to the Committee on Banking,
Housing, and Urban Affairs of the Senate, the Committee on Finance of
the Senate, the Committee on Financial Services of the House of
Representatives, and the Committee on Ways and Means of the House of
Representatives a report containing the results of the study conducted
under subsection (a).
SEC. 203. MAIN STREET INVESTOR CONFIDENCE.
The Financial Literacy and Education Commission of the Department
of the Treasury, in coordination with the Office of Investor Education
and Advocacy and the Office of the Investor Advocate of the Commission,
shall--
(1) conduct a study, after providing notice and an
opportunity for public comment, including from retail investors
in the United States, on the levels of inclusion and
participation, education in, and confidence of the people of
the United States in the capital market system of the United
States; and
(2) not later than 1 year after the date of enactment of
this Act, submit to the Committee on Banking, Housing, and
Urban Affairs, the Committee on Health, Education, Labor, and
Pensions, and the Committee on Finance of the Senate and the
Committee on Financial Services and the Committee on Education
and the Workforce of the House of Representatives
recommendations to enhance Federal financial literacy programs,
inclusion, and market confidence for the average retail
investors.
SEC. 204. INCREASING INVESTOR OPPORTUNITIES.
(a) In General.--Section 5 of the Investment Company Act of 1940
(15 U.S.C. 80a-5) is amended by adding at the end the following:
``(d) Closed-End Company Authority To Invest in Private Funds.--
``(1) In general.--Except as otherwise prohibited or
restricted by this Act (or any rule issued under this Act), the
Commission may not prohibit or otherwise limit a closed-end
company from investing any or all of the assets of the closed-
end company in securities issued by private funds.
``(2) Other restrictions on commission authority.--
``(A) In general.--Except as otherwise prohibited
or restricted by this Act (or any rule issued under
this Act), or to the extent permitted by subparagraph
(B), the Commission may not impose any condition on,
restrict, or otherwise limit--
``(i) the offer to sell, or the sale of,
securities issued by a closed-end company that
invests, or proposes to invest, in securities
issued by private funds; or
``(ii) the listing of the securities of a
closed-end company described in clause (i) on a
national securities exchange.
``(B) Unrelated restrictions.--The Commission may
impose a condition on, restrict, or otherwise limit an
activity described in clause (i) or (ii) of
subparagraph (A) if that condition, restriction, or
limitation is unrelated to the underlying
characteristics of a private fund or the status of a
private fund as a private fund.
``(3) Application.--Notwithstanding section 6(f), this
subsection shall apply to a closed-end company that elects to
be treated as a business development company pursuant to
section 54.''.
(b) Definition of Private Fund.--Section 2(a) of the Investment
Company Act of 1940 (15 U.S.C. 80a-2(a)) is amended by adding at the
end the following:
``(55) The term `private fund' has the meaning given the
term in section 202(a) of the Investment Advisers Act of 1940
(15 U.S.C. 80b-2(a)).''.
(c) Treatment by National Securities Exchanges.--Section 6(b) of
the Securities Exchange Act of 1934 (15 U.S.C. 78f(b)) is amended by
adding at the end the following:
``(11)(A) Except as otherwise prohibited or restricted by
the rules of the exchange in a manner that is consistent with
section 5(d) of the Investment Company Act of 1940 (15 U.S.C.
80a-5(d)), the exchange does not prohibit, condition, restrict,
or impose any other limitation on the listing or trading of the
securities of a closed-end company when the closed-end company
invests, or may invest, some or all of the assets of the
closed-end company in securities issued by private funds.
``(B) In this paragraph--
``(i) the term `closed-end company'--
``(I) has the meaning given the term in
section 5(a) of the Investment Company Act of
1940 (15 U.S.C. 80a-5(a)); and
``(II) includes a closed-end company that
elects to be treated as a business development
company pursuant to section 54 of the
Investment Company Act of 1940 (15 U.S.C. 80a-
53); and
``(ii) the term `private fund' has the meaning
given the term in section 2(a) of the Investment
Company Act of 1940 (15 U.S.C. 80a-2(a)).''.
(d) Investment Limitation.--Section 3(c) of the Investment Company
Act of 1940 (15 U.S.C. 80a-3(c)) is amended--
(1) in paragraph (1), in the matter preceding subparagraph
(A), in the second sentence, by striking ``subparagraphs (A)(i)
and (B)(i)'' and inserting ``subparagraphs (A)(i), (B)(i), and
(C)''; and
(2) in paragraph (7)(D), by striking ``subparagraphs (A)(i)
and (B)(i)'' and inserting ``subparagraphs (A)(i), (B)(i), and
(C)''.
SEC. 205. ENHANCEMENT OF 403(B) PLANS.
(a) Amendments to the Investment Company Act of 1940.--Section
3(c)(11) of the Investment Company Act of 1940 (15 U.S.C. 80a-3(c)(11))
is amended to read as follows:
``(11) Any--
``(A) employee's stock bonus, pension, or profit-
sharing trust which meets the requirements for
qualification under section 401 of the Internal Revenue
Code of 1986;
``(B) custodial account meeting the requirements of
section 403(b)(7) of such Code;
``(C) governmental plan described in section
3(a)(2)(C) of the Securities Act of 1933 (15 U.S.C.
77c(a)(2)(C));
``(D) collective trust fund maintained by a bank
consisting solely of assets of one or more--
``(i) trusts described in subparagraph (A);
``(ii) government plans described in
subparagraph (C);
``(iii) church plans, companies, or
accounts that are excluded from the definition
of an investment company under paragraph (14)
of this subsection; or
``(iv) plans which meet the requirements of
section 403(b) of the Internal Revenue Code of
1986--
``(I) if--
``(aa) such plan is subject
to title I of the Employee
Retirement Income Security Act
of 1974 (29 U.S.C. 1001 et
seq.);
``(bb) any employer making
such plan available agrees to
serve as a fiduciary for the
plan with respect to the
selection of the plan's
investments among which
participants can choose; or
``(cc) such plan is a
governmental plan (as defined
in section 414(d) of such
Code); and
``(II) if the employer, a fiduciary
of the plan, or another person acting
on behalf of the employer reviews and
approves each investment alternative
offered under such plan described under
subclause (I)(cc) prior to the
investment being offered to
participants in the plan; or
``(E) separate account the assets of which are
derived solely from--
``(i) contributions under pension or
profit-sharing plans which meet the
requirements of section 401 of the Internal
Revenue Code of 1986 or the requirements for
deduction of the employer's contribution under
section 404(a)(2) of such Code;
``(ii) contributions under governmental
plans in connection with which interests,
participations, or securities are exempted from
the registration provisions of section 5 of the
Securities Act of 1933 (15 U.S.C. 77e) by
section 3(a)(2)(C) of such Act (15 U.S.C.
77c(a)(2)(C));
``(iii) advances made by an insurance
company in connection with the operation of
such separate account; and
``(iv) contributions to a plan described in
clause (iii) or (iv) of subparagraph (D).''.
(b) Amendments to the Securities Act of 1933.--Section 3(a)(2) of
the Securities Act of 1933 (15 U.S.C. 77c(a)(2)) is amended--
(1) by striking ``beneficiaries, or (D)'' and inserting
``beneficiaries, (D) a plan which meets the requirements of
section 403(b) of such Code (i) if (I) such plan is subject to
title I of the Employee Retirement Income Security Act of 1974
(29 U.S.C. 1001 et seq.), (II) any employer making such plan
available agrees to serve as a fiduciary for the plan with
respect to the selection of the plan's investments among which
participants can choose, or (III) such plan is a governmental
plan (as defined in section 414(d) of such Code), and (ii) if
the employer, a fiduciary of the plan, or another person acting
on behalf of the employer reviews and approves each investment
alternative offered under any plan described under clause
(i)(III) prior to the investment being offered to participants
in the plan, or (E)'';
(2) by striking ``(C), or (D)'' and inserting ``(C), (D),
or (E)''; and
(3) by striking ``(iii) which is a plan funded'' and all
that follows through ``retirement income account).'' and
inserting ``(iii) in the case of a plan not described in
subparagraph (D) or (E), which is a plan funded by an annuity
contract described in section 403(b) of such Code''.
(c) Amendments to the Securities Exchange Act of 1934.--Section
3(a)(12)(C) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)(12)(C)) is amended--
(1) by striking ``or (iv)'' and inserting ``(iv) a plan
which meets the requirements of section 403(b) of such Code (I)
if (aa) such plan is subject to title I of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1001 et
seq.), (bb) any employer making such plan available agrees to
serve as a fiduciary for the plan with respect to the selection
of the plan's investments among which participants can choose,
or (cc) such plan is a governmental plan (as defined in section
414(d) of such Code), and (II) if the employer, a fiduciary of
the plan, or another person acting on behalf of the employer
reviews and approves each investment alternative offered under
any plan described under subclause (I)(cc) prior to the
investment being offered to participants in the plan, or (v)'';
(2) by striking ``(ii), or (iii)'' and inserting ``(ii),
(iii), or (iv)''; and
(3) by striking ``(II) is a plan funded'' and inserting
``(II) in the case of a plan not described in clause (iv), is a
plan funded''.
(d) Conforming Amendment to the Securities Exchange Act of 1934.--
Section 12(g)(2)(H) of the Securities Exchange Act of 1934 (15 U.S.C.
78l(g)(2)(H)) is amended by striking ``or (iii)'' and inserting ``(iii)
a plan described in section 3(a)(12)(C)(iv) of this Act, or (iv)''.
TITLE III--FOSTERING INVESTOR CONFIDENCE IN MARKET INTEGRITY, FAIRNESS,
AND TRANSPARENCY
SEC. 301. STUDY REGARDING RETAIL INVESTOR READABILITY OF FINANCIAL
STATEMENTS.
(a) In General.--The Commission shall conduct a study to identify--
(1) the level of readability of financial statements,
including all public disclosures, among retail investors,
including subgroups of investors identified by the Commission,
as of the date of enactment of this Act;
(2) methods to improve the timing, content, and format of
disclosures to investors with respect to financial
intermediaries, investment products, and investment services;
(3) the most useful and understandable relevant information
that retail investors need to make informed financial decisions
before engaging a financial intermediary or purchasing an
investment product or service that is typically sold to retail
investors, including shares of open-end companies, as defined
in section 5 of the Investment Company Act of 1940 (15 U.S.C.
80a-5), that are registered under section 8 of that Act (15
U.S.C. 80a-8);
(4) methods to increase the transparency of expenses and
conflicts of interests in transactions involving investment
services and products, including shares of open-end companies
described in paragraph (3);
(5) the most effective existing private and public efforts
to educate investors; and
(6) in consultation with the Financial Literacy and
Education Commission, a strategy (including, to the extent
practicable, measurable goals and objectives) to increase the
financial literacy of investors in order to bring about a
positive change in investor behavior.
(b) Report.--Not later than 1 year after the date of enactment of
this Act, the Commission shall submit to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives a report on the study required
under subsection (a).
(c) Regulations.--The Commission shall promulgate regulations that
address and improve the readability of financial statements, including
all public disclosures, with the goals of eliminating legalese,
duplication, and redundant disclosures.
SEC. 302. DUTIES OF OMBUDSMAN RELATING TO REGULATION CROWDFUNDING.
Section 4(g)(8) of the Securities Exchange Act of 1934 (15 U.S.C.
78d(g)(8)) is amended--
(1) in subparagraph (B)--
(A) by redesignating clauses (ii) and (iii) as
clauses (iii) and (iv), respectively; and
(B) by inserting after clause (i) the following:
``(ii) act as a liaison between the
Commission, small businesses, intermediaries,
and other entities subject to the regulations
under part 227 of title 17, Code of Federal
Regulations, or any successor regulation;'';
and
(2) in subparagraph (D)--
(A) in the subparagraph heading, by striking
``Report'' and inserting ``Reports'';
(B) by striking ``The Ombudsman'' and inserting the
following:
``(i) Semiannual report to investor
advocate.--The Ombudsman''; and
(C) by adding at the following:
``(ii) Annual report to congress on
regulation crowdfunding.--The Ombudsman shall
submit to the Committee on Banking, Housing,
and Urban Affairs and the Committee on
Financial Services of the House of
Representatives a report--
``(I) on activities of the
Ombudsman relating to the duties
described in subparagraph (B)(ii); and
``(II) that includes
recommendations on regulatory changes
to improve efficiency and access to
capital for entities subject to the
regulations under part 227 of title 17,
Code of Federal Regulations, or any
successor regulation.''.
SEC. 303. PUBLICATION ON ECONOMIC DATA ON SECURITIES MARKETS.
(a) In General.--The Division of Economic and Risk Analysis of the
Commission shall annually publish data on the following with respect to
a year:
(1) The number of offerings, and offering amounts by type,
which shall include, with respect to each offering, the type of
issuer, the type of security, and the type of exemption, if
applicable.
(2) The cost of performing an offering, including the
ongoing costs of performing a particular type of offering (such
as the requirement to file certain forms with the Commission),
which shall be disaggregated by--
(A)(i) the size and type of issuer; and
(ii) the exemption used by issuers with respect to
the particular offering; or
(B) the registered status of issuers.
(3) The costs to issuers of complying with the Sarbanes-
Oxley Act of 2002 (15 U.S.C. 7201 et seq.) (and the rules
issued under that Act), including the amounts paid by issuers
to registered public accounting firms in connection with that
compliance.
(4) All public enforcement actions taken by the Commission
and self-regulatory organizations against persons within the
jurisdiction of those entities, including--
(A) the number and types of violations of any
provision of law (including regulations) that either
such entity is authorized to enforce;
(B) the number and types of violators; and
(C) the amount of money collected in penalties as a
result of that enforcement.
(5) Market capitalization by type of issuer and security.
(6) The number of reporting companies, Regulation A
issuers, and crowdfunding issuers.
(7) Trading volumes by exchange or alternative trading
system.
(8) Market participants, including the number and, if
relevant, size of--
(A) broker-dealers;
(B) registered representatives;
(C) exchanges;
(D) alternative trading systems;
(E) investment companies;
(F) investment advisers registered with the
Commission under the Investment Advisers Act of 1940
(15 U.S.C. 80b-1 et seq.); and
(G) other entities determined appropriate by the
Commission.
(b) Publication of Data.--In annually publishing the data required
under subsection (a), the Division of Economic and Risk Analysis of the
Commission shall--
(1) publish that data for each of the 10 years preceding
the date of publication; and
(2) make the data described in paragraph (1)--
(A) available as an open Government data set;
(B) freely available for download in bulk; and
(C) rendered in a human-readable format.
SEC. 304. STUDY ON IPO FEES.
(a) Definitions.--In this section:
(1) IPO.--The term ``IPO'' means an initial public
offering.
(2) Small- and medium-sized company.--The term ``small- and
medium-sized company'' means an issuer with an initial public
float determination of less than $700,000,000.
(b) Study.--
(1) In general.--The Commission, in consultation with the
Financial Industry Regulatory Authority, shall carry out a
study of the costs associated with small- and medium-sized
companies to undertake IPOs and Tier 2 offerings, as defined in
section 230.251 of title 17, Code of Federal Regulations, or
any successor regulation.
(2) Requirements.--In carrying out the study required under
paragraph (1), the Commission shall--
(A) consider the direct and indirect costs of an
IPO, including--
(i) fees, such as gross spreads paid to
underwriters, promoters, investment advisory
firms, and other professionals;
(ii) compliance with Federal and State
securities laws at the time of the IPO; and
(iii) such other IPO-related costs as the
Commission determines appropriate;
(B) compare and analyze the costs of an IPO with
the costs of obtaining alternative sources of financing
and of liquidity;
(C) consider the impact of the costs of an IPO on
capital formation;
(D) analyze the impact of the costs of an IPO on
the availability of public securities of small- and
medium-sized companies to retail investors; and
(E) analyze trends in IPOs over a time period the
Commission determines is appropriate to analyze IPO
pricing practices, considering--
(i) the number of IPOs;
(ii) how costs for IPOs have evolved over
time, including fees paid to underwriters,
investment advisory firms, financial advisers,
and other professions for services in
connection with an IPO;
(iii) the number of brokers and dealers
active in underwriting IPOs;
(iv) the different types of services that
underwriters, promoters, investment advisory
firms, and other professionals provide before
and after a small- or medium-sized company IPO
and the factors impacting underwriting costs;
(v) changes in the costs and availability
of investment research for small- and medium-
sized companies; and
(vi) any other consideration the Commission
considers necessary and appropriate.
(c) Report.--Not later than 1 year after the date of enactment of
this Act, the Commission shall submit to Congress a report containing
all findings and determinations made in carrying out the study required
under subsection (b) and any administrative or legislative
recommendations the Commission may have with respect to the matters
considered under the study.
SEC. 305. EXCLUSIONS AVAILABLE REGARDLESS OF SIGNIFICANT SOCIAL POLICY
ISSUE.
An issuer may exclude a shareholder proposal pursuant to section
240.14a-8(i) of title 17, Code of Federal Regulations, or any successor
regulation, without regard to whether that shareholder proposal relates
to a significant social policy issue.
TITLE IV--HOLDING REGULATORS ACCOUNTABLE THROUGH INCREASED OVERSIGHT
SEC. 401. REQUIRED TESTIMONY.
Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is
amended by adding at the end the following:
``(l) Required Testimony.--Not later than 180 days after the date
of enactment of this subsection, and semiannually thereafter, the
Chairman of the Commission shall appear before the Committee on
Banking, Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives regarding the
activities of the Commission.''.
SEC. 402. SEMIANNUAL REPORT.
Section 23 of the Securities Exchange Act of 1934 (15 U.S.C. 78w)
is amended by adding at the end the following:
``(e) Semiannual Report on Regulatory and Enforcement Actions.--Not
later than 180 days after the date of enactment of this subsection, and
semiannually thereafter, the Chairman of the Commission shall submit to
Congress a report that includes--
``(1) an overview of the capital markets system of the
United States;
``(2) the regulatory actions and agenda of the Commission,
including, for the period covered by the report, all actions
the Commission has taken to protect investors, maintain fair,
orderly, and efficient markets, and facilitate capital
formation;
``(3) with respect to capital formation challenges and
challenges to accessing capital for small businesses, including
minority, women-owned, and rural small businesses--
``(A) the status of enforcement actions of the
Commission, which shall include information regarding--
``(i) for the period covered by the report,
the average amount of time it takes for the
Commission to open and complete such an action;
and
``(ii) the outcome of each such action that
was resolved during the period covered by the
report; and
``(B) any assessments of the Commission; and
``(4) information on the publication of economic data on
securities markets by the Division of Economic and Risk
Analysis of the Commission.''.
SEC. 403. RULEMAKING REQUIREMENTS.
(a) Consideration of the Costs and Benefits of Commission
Regulations and Certain Other Agency Actions.--
(1) In general.--Section 23 of the Securities Exchange Act
of 1934 (15 U.S.C. 78w), as amended by section 402, is amended
by adding at the end the following:
``(f) Consideration of Costs and Benefits.--
``(1) Rulemaking defined.--In this subsection, the term
`rulemaking' does not include--
``(A) a regulation issued in accordance with the
formal rulemaking provisions of section 556 or 557 of
title 5, United States Code;
``(B) a regulation that is limited to agency
organization, management, or personnel matters;
``(C) a regulation promulgated pursuant to
statutory authority that expressly prohibits compliance
with this provision; and
``(D) a regulation that is certified by the agency
to be an emergency action, if such certification is
published in the Federal Register.
``(2) Requirements.--When issuing a rulemaking under the
securities laws, the Commission shall--
``(A) clearly identify the nature and source of the
problem that the rulemaking is designed to address, as
well as assess the significance of that problem, to
enable assessment of whether any new regulation is
warranted;
``(B) utilize the Chief Economist to assess the
costs and benefits, both qualitative and quantitative,
of the rulemaking and propose or adopt a rulemaking
only on a reasoned determination that the benefits of
the rulemaking justify the costs of the rulemaking;
``(C) in assessing the costs and benefits of the
rulemaking under subparagraph (B), utilize the Chief
Economist to articulate the appropriate economic
baseline against which to measure the likely economic
impact of the rulemaking;
``(D) identify and assess reasonable available
alternatives to the rulemaking that were considered,
including modification of an existing rulemaking,
together with an explanation of why the rulemaking
meets the objectives of the rulemaking more effectively
than the reasonable alternatives;
``(E) identify and assess available alternatives to
the regulation that the Commission considered,
including modification of an existing regulation,
together with an explanation of why the regulation
meets the regulatory objectives more effectively than
the alternatives;
``(F) ensure that any regulation is accessible,
consistent, written in plain language, and easy to
understand; and
``(G) measure, and seek to improve, the actual
results of regulatory requirements.
``(3) Considerations and actions.--In deciding whether and
how to regulate, the Commission shall assess the costs and
benefits of reasonable available alternatives, including the
alternative of not regulating, and choose the approach that
maximizes net benefits, including by--
``(A) consistent with the requirements of section
3(f) of this Act, section 2(b) of the Securities Act of
1933 (15 U.S.C. 77b(b)), section 202(c) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-2(c)),
and section 2(c) of the Investment Company Act of 1940
(15 U.S.C. 80a-2(c)), considering whether the
rulemaking, in addition to being in the interest of
protecting investors, will promote efficiency,
competition, and capital formation;
``(B) evaluating whether, consistent with obtaining
regulatory objectives, the regulation is tailored to
impose the least burden on society, including market
participants, individuals, businesses of differing
sizes, and other entities (including State and local
governmental entities), taking into account, to the
extent practicable, the cumulative costs of
regulations; and
``(C) evaluate whether the rulemaking is
inconsistent, incompatible, or duplicative of other
Federal regulations.
``(4) Explanation and comments.--In issuing any final
regulation, the Commission shall--
``(A) explain the nature of comments received by
the Commission; and
``(B) provide a response to those comments,
including an explanation of any changes that were made
in response to those comments and the reasons that the
Commission did not incorporate any concerns related to
the potential costs or benefits in the final
regulation.
``(5) Public availability.--The Commission shall--
``(A) make available to the public in an online
depository all economic analyses, including analyses on
market failure, performed by the staff of the
Commission, including such analyses performed by the
Division of Economic and Risk Analysis, with respect to
a rulemaking under the securities laws; and
``(B) take appropriate steps to protect any non-
public data contained in any economic analysis included
in the online depository described in subparagraph (A),
which may include anonymizing, aggregating, or
employing other measures as the Commission deems
appropriate to protect such data while also providing
for its public availability.''.
(2) Sense of congress relating to other regulatory
entities.--It is the sense of Congress that the Public Company
Accounting Oversight Board should be subject to the
requirements of subsection (f) of section 23 of the Securities
Exchange Act of 1934 (15 U.S.C. 78w), as added by paragraph
(1).
(b) Considerations With Respect to Rulemaking.--
(1) Rules under the securities act of 1933.--Section 2(b)
of the Securities Act of 1933 (15 U.S.C. 77b(b)) is amended by
inserting ``, when considered individually or cumulatively with
other rules or regulations or other proposed rules or
regulations,'' before ``will promote''.
(2) Rules under the securities exchange act of 1934.--
Section 23(a)(2) of the Securities Exchange Act of 1934 (15
U.S.C. 78w(a)(2)) is amended, in the second sentence, by
inserting ``, when considered individually or cumulatively with
other rules or regulations or other proposed rules or
regulations,'' after ``which would''.
(3) Rules under the investment company act of 1940.--
Section 2(c) of the Investment Company Act of 1940 (15 U.S.C.
80a-2(c)) is amended by inserting ``, when considered
individually or cumulatively with other rules or regulations or
other proposed rules or regulations,'' before ``will promote''.
(4) Rules under the investment advisers act of 1940.--
Section 202(c) of the Investment Advisers Act of 1940 (15
U.S.C. 80b-2(c)) is amended by inserting ``, when considered
individually or cumulatively with other rules or regulations or
other proposed rules or regulations,'' before ``will promote''.
SEC. 404. SENATE CONFIRMATION OF INSPECTOR GENERAL OF THE SECURITIES
AND EXCHANGE COMMISSION.
Chapter 4 of title 5, United States Code, is amended--
(1) in section 401, by inserting ``the Securities and
Exchange Commission,'' after ``National Security Agency,''; and
(2) in section 415(a)(1)(A), by striking ``the Securities
and Exchange Commission,''.
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