IB 

Union Calendar No. 168 

113TH CONGRESS 

1ST SESSION H. R. 2374 

[Report No. 113–228, Part I] 

To amend the Securities Exchange Act of 1934 to provide protections for 

retail customers, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 14, 2013 

Mrs. WAGNER introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Education and the Workforce, 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 

SEPTEMBER 25, 2013 

Additional sponsor: Mr. MURPHY of Florida 

SEPTEMBER 25, 2013 

Reported from the Committee on Financial Services with an amendment 

[Strike out all after the enacting clause and insert the part printed in italic] 

SEPTEMBER 25, 2013 

The Committee on Education and the Workforce discharged; committed to the 

Committee of the Whole House on the State of the Union and ordered 

to be printed 


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•HR 2374 RH

A BILL 

To amend the Securities Exchange Act of 1934 to provide 

protections for retail customers, and for other purposes. 


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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 ‘‘Retail Investor Protec5 tion Act’’. 

6 SEC. 2. STAY ON RULES DEFINING CERTAIN FIDUCIARIES. 

7 After the date of enactment of this Act, the Secretary 

8 of Labor shall not prescribe any regulation under the Em9 ployee Retirement Income Security Act of 1974 (29 

10 U.S.C. 1001 et seq.) defining the circumstances under 

11 which an individual is considered a fiduciary until the date 

12 that is 60 days after the Securities and Exchange Com13 mission issues a final rule relating to standards of conduct 

14 for brokers and dealers pursuant to the second subsection 

15 (k) of section 15 of the Securities Exchange Act of 1934 

16 (15 U.S.C. 78o(k)). 

17 SEC. 3. AMENDMENTS TO THE SECURITIES EXCHANGE ACT 

18 OF 1934. 

19 The second subsection (k) of section 15 of the Securi20 ties Exchange Act of 1934 (15 U.S.C. 78o(k)), as added 

21 by section 913(g)(1) of the Dodd-Frank Wall Street Re22 form and Consumer Protection Act (12 U.S.C. 5301 et 

23 seq.), is amended by adding at the end the following: 


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1 ‘‘(3) REQUIREMENTS PRIOR TO RULEMAKING.— 

2 The Commission shall not promulgate a rule pursu3 ant to paragraph (1) before— 

4 ‘‘(A) identifying if retail customers (and 

5 such other customers as the Commission may 

6 by rule provide) are being systematically 

7 harmed or disadvantaged due to brokers or 

8 dealers operating under different standards of 

9 conduct than those standards that apply to in10 vestment advisors under section 211 of the In11 vestment Advisers Act of 1940 (15 U.S.C. 80b– 

12 11); 

13 ‘‘(B) identifying whether the adoption of a 

14 uniform fiduciary standard of care for brokers 

15 or dealers and investment advisors would ad16 versely impact retail investor access to personal17 ized investment advice, recommendations about 

18 securities, or the availability of such advice and 

19 recommendations; 

20 ‘‘(C) conducting an assessment by the 

21 chief economist of the Commission that assesses 

22 the qualitative and quantitative costs and bene23 fits of the rule; and 

24 ‘‘(D) the Commission, based on the assess25 ment described in subparagraph (B)— 


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1 ‘‘(i) determines that the benefits of 

2 the rule justify its costs; 

3 ‘‘(ii) identifies and assesses available 

4 alternatives to the rule that were consid5 ered, including modification of an existing 

6 regulation, simplification of disclosures re7 garding standards of care that apply to 

8 brokers or dealers and those that apply to 

9 investment advisors, together with an ex10 planation of why the rule meets the regu11 latory objectives more effectively than the 

12 alternatives; and 

13 ‘‘(iii) ensures that the rule is acces14 sible, consistent, written in plain language, 

15 and easy to understand, and that the rule 

16 shall measure and seek to improve the ac17 tual results of regulatory requirements. 

18 ‘‘(4) REQUIREMENTS FOR PROMULGATING A

19 RULE.—The Commission shall publish in the Fed20 eral Register alongside the rule promulgated pursu21 ant to paragraph (1) formal findings that such rule 

22 would reduce the confusion of a retail customer (and 

23 such other customers as the Commission may by 

24 rule provide) about standards of conduct applicable 

25 to brokers, dealers, and investment advisors. 


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1 ‘‘(5) REQUIREMENTS UNDER INVESTMENT AD2 VISERS ACT OF 1940.—In proposing rules under 

3 paragraph (1) for brokers or dealers, the Commis4 sion shall consider the differences in the registration, 

5 supervision, and examination requirements applica6 ble to brokers, dealers, and investment advisors.’’. 

7 SECTION 1. SHORT TITLE. 

8 This Act may be cited as the ‘‘Retail Investor Protec9 tion Act’’. 

10 SEC. 2. STAY ON RULES DEFINING CERTAIN FIDUCIARIES. 

11 After the date of enactment of this Act, the Secretary 

12 of Labor shall not prescribe any regulation under the Em13 ployee Retirement Income Security Act of 1974 (29 U.S.C. 

14 1001 et seq.) defining the circumstances under which an 

15 individual is considered a fiduciary until the date that is 

16 60 days after the Securities and Exchange Commission 

17 issues a final rule relating to standards of conduct for bro18 kers and dealers pursuant to the second subsection (k) of 

19 section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 

20 78o(k)). 

21 SEC. 3. AMENDMENTS TO THE SECURITIES EXCHANGE ACT 

22 OF 1934. 

23 The second subsection (k) of section 15 of the Securities 

24 Exchange Act of 1934 (15 U.S.C. 78o(k)), as added by sec25 tion 913(g)(1) of the Dodd-Frank Wall Street Reform and 


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•HR 2374 RH

1 Consumer Protection Act (12 U.S.C. 5301 et seq.), is 

2 amended by adding at the end the following: 

3 ‘‘(3) REQUIREMENTS PRIOR TO RULEMAKING.— 

4 The Commission shall not promulgate a rule pursu5 ant to paragraph (1) before— 

6 ‘‘(A) identifying if retail customers (and 

7 such other customers as the Commission may by 

8 rule provide) are being systematically harmed or 

9 disadvantaged due to brokers or dealers oper10 ating under different standards of conduct than 

11 those standards that apply to investment advi12 sors under section 211 of the Investment Advisers 

13 Act of 1940 (15 U.S.C. 80b-11); and 

14 ‘‘(B) identifying whether the adoption of a 

15 uniform fiduciary standard of care for brokers or 

16 dealers and investment advisors would adversely 

17 impact retail investor access to personalized in18 vestment advice, recommendations about securi19 ties, or the availability of such advice and rec20 ommendations. 

21 ‘‘(4) REQUIREMENTS FOR PROMULGATING A

22 RULE.—The Commission shall publish in the Federal 

23 Register alongside the rule promulgated pursuant to 

24 paragraph (1) formal findings that such rule would 

25 reduce the confusion of a retail customer (and such 


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1 other customers as the Commission may by rule pro2 vide) about standards of conduct applicable to bro3 kers, dealers, and investment advisors. 

4 ‘‘(5) REQUIREMENTS UNDER INVESTMENT ADVIS5 ERS ACT OF 1940.—In proposing rules under para6 graph (1) for brokers or dealers, the Commission shall 

7 consider the differences in the registration, super8 vision, and examination requirements applicable to 

9 brokers, dealers, and investment advisors.’’. 


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Union Calendar No. 168 

113TH CONGRESS 

1ST SESSION H. R. 2374 

[Report No. 113–228, Part I] 

A BILL 

To amend the Securities Exchange Act of 1934 to 

other purposes. provide protections for retail customers, and for 

SEPTEMBER 25, 2013 

Reported from the Committee on Financial Services with 

an amendment 

SEPTEMBER 25, 2013 

The Committee on Education and the Workforce disprinted House on the State of the Union and ordered to be charged; committed to the Committee of the Whole 


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