I 

113TH CONGRESS 

1ST SESSION H. R. 1627 

To amend the Investment Advisers Act of 1940 to require certain investment 

advisers to pay fees to help cover the costs of inspecting and examining 

investment advisers under such Act. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 18, 2013 

Ms. WATERS (for herself and Mr. DELANEY) introduced the following bill; 

which was referred to the Committee on Financial Services 

A BILL 

To amend the Investment Advisers Act of 1940 to require 

certain investment advisers to pay fees to help cover 

the costs of inspecting and examining investment advisers under such Act. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Investment Adviser 

5 Examination Improvement Act of 2013’’. 


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1 SEC. 2. SENSE OF CONGRESS. 

2 It is the sense of the Congress that the Securities 

3 and Exchange Commission should increase the number 

4 and frequency of examinations of investment advisers. 

5 SEC. 3. INSPECTION AND EXAMINATION FEES. 

6 Section 204 of the Investment Advisers Act of 1940 

7 (15 U.S.C. 80b–4) is amended by adding at the end the 

8 following new subsection 

9 ‘‘(e) INSPECTION AND EXAMINATION FEES.— 

10 ‘‘(1) IN GENERAL.—The Commission shall col11 lect an annual fee from investment advisers that are 

12 subject to inspection or examination by the Commis13 sion under this title to defray the cost of such in14 spections and examinations. 

15 ‘‘(2) EXEMPTIONS FOR CERTAIN STATE-REGU16 LATED INVESTMENT ADVISERS.—No fees shall be 

17 collected under this subsection from any investment 

18 adviser that is prohibited from registering with the 

19 Commission under section 203 by reason of section 

20 203A. 

21 ‘‘(3) FEE AMOUNTS.— 

22 ‘‘(A) AMOUNT TO BE COLLECTED.— 

23 ‘‘(i) IN GENERAL.—The Commission 

24 shall seek to ensure that the aggregate 

25 amount of fees collected under this sub26 section with respect to a specific fiscal year 


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1 are equal to the estimated cost of the Com2 mission in carrying out additional inspec3 tions and examinations for such fiscal 

4 year. 

5 ‘‘(ii) ADDITIONAL INSPECTIONS AND

6 EXAMINATIONS DEFINED.—For purposes 

7 of this subparagraph and with respect to a 

8 fiscal year, the term ‘additional inspections 

9 and examinations’ means those inspections 

10 and examinations of investment advisers 

11 under this title for such fiscal year that ex12 ceed the number of inspections and exami13 nations of investment advisers under this 

14 title conducted during fiscal year 2012. 

15 ‘‘(B) FEE CALCULATION FORMULA.—The 

16 Commission shall establish by rulemaking a for17 mula for determining the fee amount to be as18 sessed against individual investment advisers, 

19 which shall take into account the following fac20 tors: 

21 ‘‘(i) The anticipated costs of con22 ducting inspections and examinations of in23 vestment advisers under this title, includ24 ing the anticipated frequency of such in25 spections and examinations. 


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1 ‘‘(ii) The investment adviser’s size, in2 cluding the assets under management of 

3 the investment adviser. 

4 ‘‘(iii) The number and type of clients 

5 of the investment adviser, and the extent 

6 to which the adviser’s clients pay other 

7 fees established by the Commission, includ8 ing registration and transaction fees. 

9 ‘‘(iv) Such other objective factors, 

10 such as risk characteristics, as the Com11 mission determines to be appropriate. 

12 ‘‘(C) ADJUSTMENT OF FORMULA.—Prior 

13 to the end of each fiscal year, the Commission 

14 shall review the fee calculation formula and, if, 

15 after allowing for a period of public comment, 

16 the Commission determines that the formula 

17 needs to be revised, the Commission shall revise 

18 such formula before fees are assessed for the 

19 following fiscal year. 

20 ‘‘(4) PUBLIC DISCLOSURES.—The Commission 

21 shall make the following information publicly avail22 able, including on the Web site of the Commission: 

23 ‘‘(A) The formula used to determine the 

24 fee amount to be assessed against individual inVerDate Mar 15 2010 06:56 Apr 24, 2013 Jkt 029200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1627.IH H1627

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1 vestment advisers, and any adjustment made to 

2 such formula. 

3 ‘‘(B) The factors used to determine such 

4 formula, including any additional objective fac5 tors used by the Commission pursuant to para6 graph (3)(B)(iv). 

7 ‘‘(5) AUDIT.— 

8 ‘‘(A) IN GENERAL.—The Comptroller Gen9 eral of the United States shall, every 2 years, 

10 conduct an audit of the use of the fees collected 

11 by the Commission under this subsection, the 

12 reviews of the formula used to calculate such 

13 fees, and any adjustments made by the Com14 mission to such formula. 

15 ‘‘(B) REPORT.—After conducting each 

16 audit required under subparagraph (A), the 

17 Comptroller General shall issue a report on 

18 such audit to the Committee on Financial Serv19 ices of the House of Representatives and the 

20 Committee on Banking, Housing, and Urban 

21 Affairs of the Senate. 

22 ‘‘(6) TREATMENT OF FEES.— 

23 ‘‘(A) IN GENERAL.—Funds derived from 

24 fees assessed under this subsection shall be 

25 available to the Commission, without further 


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1 appropriation or fiscal year limitation, to pay 

2 any costs associated with inspecting and exam3 ining investment advisers that are subject to in4 spection and examination under this title. 

5 ‘‘(B) FUNDS NOT PUBLIC FUNDS.—Funds 

6 derived from fees assessed under this subsection 

7 shall not be construed to be Government or 

8 public funds or appropriated money. Notwith9 standing any other provision of law, funds de10 rived from fees assessed under this subsection 

11 shall not be subject to apportionment for the 

12 purpose of chapter 15 of title 31, United States 

13 Code, or under any other authority. 

14 ‘‘(C) FUNDS SUPPLEMENTAL TO OTHER

15 AMOUNTS.—Funds derived from fees assessed 

16 under this subsection shall supplement, and be 

17 in addition to, any other amounts available to 

18 the Commission, under a regular appropriation 

19 or otherwise, for the purpose described in sub20 paragraph (A).’’. 

Æ 


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