79–006 

115TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 115–886 

NATIONAL SENIOR INVESTOR INITIATIVE ACT OF 2018 

AUGUST 3, 2018.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. HENSARLING, from the Committee on Financial Services, 

submitted the following 

R E P O R T 

[To accompany H.R. 6323] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Financial Services, to whom was referred the 

bill (H.R. 6323) to create an interdivisional taskforce at the Securities and Exchange Commission for senior investors, having considered the same, report favorably thereon with an amendment and 

recommend that the bill as amended do pass. 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘National Senior Investor Initiative Act of 2018’’ or 

the ‘‘Senior Security Act of 2018’’. 

SEC. 2. SENIOR INVESTOR TASKFORCE. 

Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is amended by 

adding at the end the following: 

‘‘(k) SENIOR INVESTOR TASKFORCE.— 

‘‘(1) ESTABLISHMENT.—There is established within the Commission the Senior 

Investor Taskforce (in this subsection referred to as the ‘Taskforce’). 

‘‘(2) DIRECTOR OF THE TASKFORCE.—The head of the Taskforce shall be the Director, who shall— 

‘‘(A) report directly to the Chairman; and 

‘‘(B) be appointed by the Chairman, in consultation with the Commission, 

from among individuals— 

‘‘(i) currently employed by the Commission or from outside of the 

Commission; and 

‘‘(ii) having experience in advocating for the interests of senior investors. 

‘‘(3) STAFFING.—The Chairman shall ensure that— 

‘‘(A) the Taskforce is staffed sufficiently to carry out fully the requirements of this subsection; and 

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‘‘(B) such staff shall include individuals from the Division of Enforcement, 

Office of Compliance Inspections and Examinations, and Office of Investor 

Education and Advocacy. 

‘‘(4) MINIMIZING DUPLICATION OF EFFORTS.—In organizing and staffing the 

Taskforce, the Chairman shall take such actions as may be necessary to minimize the duplication of efforts within the divisions and offices described under 

paragraph (3)(B) and any other divisions, offices, or taskforces of the Commission. 

‘‘(5) FUNCTIONS OF THE TASKFORCE.—The Taskforce shall— 

‘‘(A) identify challenges that senior investors encounter, including problems associated with financial exploitation and cognitive decline; 

‘‘(B) identify areas in which senior investors would benefit from changes 

in the regulations of the Commission or the rules of self-regulatory organizations; 

‘‘(C) coordinate, as appropriate, with other offices within the Commission, 

other taskforces that may be established within the Commission, self-regulatory organizations, and the Elder Justice Coordinating Council; and 

‘‘(D) consult, as appropriate, with State securities and law enforcement 

authorities, State insurance regulators, and other Federal agencies. 

‘‘(6) REPORT.—The Taskforce, in coordination, as appropriate, with the Office 

of the Investor Advocate and self-regulatory organizations, and in consultation, 

as appropriate, with State securities and law enforcement authorities, State insurance regulators, and Federal agencies, shall issue a report every 2 years to 

the Committee on Banking, Housing, and Urban Affairs of the Senate and the 

Committee on Financial Services of the House of Representatives, the first of 

which shall not be issued until after the report described in section 3 of the National Senior Investor Initiative Act of 2018 has been issued and considered by 

the Taskforce, containing— 

‘‘(A) appropriate statistical information and full and substantive analysis; 

‘‘(B) a summary of recent trends and innovations that have impacted the 

investment landscape for senior investors; 

‘‘(C) a summary of regulatory initiatives that have concentrated on senior 

investors and industry practices related to senior investors; 

‘‘(D) key observations, best practices, and areas needing improvement, involving senior investors identified during examinations, enforcement actions, and investor education outreach; 

‘‘(E) a summary of the most serious issues encountered by senior investors, including issues involving financial products and services; 

‘‘(F) an analysis with regard to existing policies and procedures of brokers, dealers, investment advisers, and other market participants related to 

senior investors and senior investor-related topics and whether these policies and procedures need to be further developed or refined; 

‘‘(G) recommendations for such changes to the regulations, guidance, and 

orders of the Commission and self-regulatory organizations and such legislative actions as may be appropriate to resolve problems encountered by 

senior investors; and 

‘‘(H) any other information, as determined appropriate by the Director of 

the Taskforce. 

‘‘(7) SUNSET.—The Taskforce shall terminate after the end of the 10-year period beginning on the date of the enactment of this subsection, but may be reestablished by the Chairman. 

‘‘(8) SENIOR INVESTOR DEFINED.—For purposes of this subsection, the term 

‘senior investor’ means an investor over the age of 65.’’. 

SEC. 3. GAO STUDY. 

(a) IN GENERAL.—Not later than 1 year after the date of enactment of this Act, 

the Comptroller General of the United States shall submit to Congress and the Senior Investor Taskforce the results of a study on the economic costs of the financial 

exploitation of senior citizens. 

(b) CONTENTS.—The study required under subsection (a) shall include information 

with respect to— 

(1) costs— 

(A) associated with losses by victims that were incurred as a result of the 

financial exploitation of senior citizens; 

(B) incurred by State and Federal agencies, law enforcement and investigatory agencies, public benefit programs, public health programs, and 

other public programs as a result of the financial exploitation of senior citizens; and 

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(C) incurred by the private sector as a result of the financial exploitation 

of senior citizens; and 

(2) any other relevant costs that— 

(A) result from the financial exploitation of senior citizens; and 

(B) the Comptroller General determines are necessary and appropriate to 

include in order to provide Congress and the public with a full and accurate 

understanding of the economic costs resulting from the financial exploitation of senior citizens in the United States. 

(c) SENIOR CITIZEN DEFINED.—For purposes of this section, the term ‘‘senior citizen’’ means an individual over the age of 65. 

PURPOSE AND SUMMARY

On July 10, 2018, Representative Gottheimer introduced H.R. 

6323, the ‘‘National Senior Investor Initiative Act of 2018’’. As 

modified by an amendment in the nature of a substitute, H.R. 6323 

creates an interdivisional task force at the U.S. Securities and Exchange Commission (‘‘SEC’’)—composed of staff from the Division 

of Enforcement, Office of Compliance, Inspections and Examinations, and the Office of Investor Education and Advocacy—to examine and identify challenges facing senior investors (the ‘‘Task 

Force’’). Every two years, in consultation with other SEC offices, 

State securities and law enforcement authorities, State insurance 

regulators, and Federal agencies, the Task Force is to report to 

Congress and recommend any regulatory or statutory changes that 

it believes are necessary. Further, within one year of enactment, 

the U.S. Government Accountability Office (‘‘GAO’’) shall study and 

report on the economic costs of the financial exploitation of senior 

citizens. 

BACKGROUND AND NEED FOR LEGISLATION

The goal of H.R. 6323 is to help the SEC ensure it continues to 

identify and correct financial challenges facing senior investors. 

The SEC recently has focused attention on these issues through the 

Retail Strategy Task Force established under Chairman Jay Clayton’s leadership and the white paper on elder financial exploitation 

issued by the Office of the Investor Advocate in July 2018. H.R. 

6323 will provide a statutory framework to ensure that the various 

SEC offices continue to work together to address these issues. 

According to a 2015 report, older Americans lose approximately 

$36.5 billion each year to financial scams and abuse. These numbers are increasing as technology makes it easier for scammers to 

target older Americans. For example, in New York, the state reported that in twelve months seniors lost as much as $1.5 billion 

from misappropriation of funds. Further, a 2016 survey from the 

Investor Protection Trust found that almost 1-in-5 seniors, approximately 7 million Americans, have reported being victims of exploitation. Even more troubling is that the majority of financial exploitation against seniors goes unreported. According to the National 

Adult Protective Services Association, only one in 44 cases of financial abuse may be reported. 

On May the President signed into law the ‘‘Economic Growth, 

Regulatory Relief and Consumer Protection Act’’ (P.L. 115–174) 

(EGRRCPA). Section 303 of the law, entitled ‘‘Immunity from suit 

for disclosure of financial exploitation of senior citizens’’, or more 

commonly known as the Senior Safe Act provides immunity to depository institutions, credit unions, investment advisers, brokerVerDate Sep 11 2014 05:31 Aug 04, 2018 Jkt 079006 PO 00000 Frm 00003 Fmt 6659 Sfmt 6602 E:\HR\OC\HR886.XXX HR886
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dealers, insurance companies, insurance agency, or transfer agents, 

and their employees from civil or administrative liability, as long 

as employees at these specified institutions receive training in how 

to identify and report predatory activity and reports are made ‘‘in 

good faith’’ and ‘‘with reasonable care.’’ Current bank privacy laws 

make it difficult for these entities to report any potentially fraudulent activity. Maine’s Senior$afe program served as the basis for 

the Senior Safe Act and Section 303 of the EGRRCPA. Sadly, financial exploitation of seniors often is committed by those closest 

to seniors, such as friends, neighbors, family members, caregivers, 

or other trusted individuals. Maine designed its program to train 

financial professionals to detect and report senior financial abuse. 

At a time when the population of senior investors is increasing 

rapidly, H.R. 6323 will help to ensure that the SEC can marshal 

its resources across the agency to identify and work to reduce financial abuse against senior investors. The legislation empowers 

the SEC Chairman to appoint a director of the Task Force, who can 

be a current SEC employee, and to ensure the Task Force is operated in coordination with other offices and initiatives to reduce bureaucratic redundancies. The Task Force will report to Congress 

every two years on key observations, best practices, and areas for 

improvement identified throughout its work. Additionally, the GAO 

will conduct a study on the economic costs of the financial exploitation of elder investors—which will provide much needed recent 

data on financial exploitation; and the Task Force must consider 

this report in connection with its own first report to Congress. 

HEARINGS

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

COMMITTEE CONSIDERATION

The Committee on Financial Services met in open session on 

July 11, 2018, and ordered H.R. 6323 to be reported favorably to 

the House, as amended, by voice vote. 

COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. The sole vote was a 

motion by Chairman Hensarling to report the bill favorably to the 

House as amended. The motion was agreed to by voice vote, a 

quorum being present. 

COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the findings and recommendations of the Committee based on oversight activities under clause 2(b)(1) of rule X 

of the Rules of the House of Representatives, are incorporated in 

the descriptive portions of this report. 

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PERFORMANCE GOALS AND OBJECTIVES

Pursuant to clause 3(c)(4) of rule XIII of the Rules of the House 

of Representatives, the Committee states that H.R. 6323 will help 

the SEC to eliminate the increasing number of financial exploitation cases against senior citizens by creating an interdivisional 

task force at the SEC to examine and identify challenges facing 

senior investors and will help Congress and the public, through a 

report by the GAO, to better understand the economic costs of the 

exploitation of seniors. 

NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

CONGRESSIONAL BUDGET OFFICE ESTIMATES

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, July 17, 2018. 

Hon. JEB HENSARLING, 

Chairman, Committee on Financial Services, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3555, H.R. 6177, H.R. 

6319, H.R. 6320, H.R. 6321, H.R. 6322, H.R. 6323, and H.R. 6324. 

If you wish further details on these estimates, we will be pleased 

to provide them. The CBO staff contact is Stephen Rabent. 

Sincerely, 

MARK P. HADLEY

(For Keith Hall, Director). 

Enclosure. 

Securities and Exchange Commission Legislation 

On July 11, the House Committee on Financial Services ordered 

eight bills to be reported related to the rules, regulations, and operations of the Securities and Exchange Commission (SEC). The bills 

are: 

• H.R. 3555, the Exchange Regulatory Improvement Act, 

would require the Securities and Exchange Commission (SEC) 

to issue regulations regarding its definition of what constitutes 

a facility used by a national securities exchange; 

• H.R. 6177, the Developing and Empowering our Aspiring 

Leaders Act of 2018, would direct the SEC to conduct a ruleVerDate Sep 11 2014 05:31 Aug 04, 2018 Jkt 079006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6602 E:\HR\OC\HR886.XXX HR886
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making to expand what types of asset acquisitions are considered qualifying investments for a venture capital fund; • H.R. 6319, the Expanding Investment in Small Business 

Act, would require the SEC to conduct a study on the limitation on the amount of outstanding securities a closed-end fund 

may hold from a single issuer and still be classified as diversified; • H.R. 6320, the Promoting Transparent Standards for Corporate Insiders Act, would require the SEC to conduct a study 

of various proposals to change agency rules regarding the use 

of written trading plans by certain securities traders; • H.R. 6321, the Investment Adviser Regulatory Flexibility 

Improvement Act, would require the SEC to revise the definitions of a small business and small organization applicable for 

assessing the effect of the agency’s rulemakings under the Investment Advisers Act of 1940 on those entities; • H.R. 6322, the Enhancing Multi-Class Share Disclosures 

Act, would direct the SEC to issue a rule requiring securities 

issuers with multi-class stock structures to make disclosures 

regarding the voting power of certain individuals; • H.R. 6323, the National Senior Investor Initiative Act of 

2018, would direct the SEC to establish a taskforce to identify 

challenges that senior investors face and to report on its findings every two years; and • H.R. 6324, the Middle Market IPO Underwriting Cost Act, 

would direct the SEC to study the costs associated with small 

and medium-sized companies undertaking an initial public offering and to report on its findings. 

Using information from the SEC regarding the costs of similar 

activities, CBO estimates that implementing seven of those bills— 

H.R. 3555, H.R. 6177, H.R. 6319, H.R. 6320, H.R. 6321, H.R. 6322, 

and H.R. 6324—would each have a gross cost of about $1 million 

for the agency to conduct the required studies and rulemakings and 

to issue reports. CBO estimates that implementing the eighth 

bill—H.R. 6323—would have a gross cost of $7 million over the 

2019–2023 period for the SEC to establish and carry out the functions of the taskforce established under the bill. 

However, the SEC is authorized to collect fees sufficient to offset 

its annual appropriation; therefore, CBO estimates that the net effect on discretionary spending of implementing each of those bills 

would be negligible, assuming appropriation actions consistent with 

that authority. H.R. 6323 also would require the Government Accountability Office (GAO) to conduct a study on the economic costs 

of the financial exploitation of senior citizens and CBO estimates 

that implementing that section would cost GAO less than $500,000; 

such spending would be subject to the availability of appropriated 

funds. 

None of the bills would affect direct spending or revenues; therefore, pay-as-you-go procedures do not apply for any of the eight 

bills. 

None of the bills would increase net direct spending or on-budget 

deficits in any of the four consecutive 10-year periods beginning in 

2029, CBO estimates. 

None of the bills contain intergovernmental mandates as defined 

in the Unfunded Mandate Reform Act (UMRA) and would not afVerDate Sep 11 2014 05:31 Aug 04, 2018 Jkt 079006 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\HR886.XXX HR886
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fect the budgets of state, local, or tribal governments. All of them 

would require the SEC to take actions that could raise the agency’s 

administrative costs and the fees it collects to offset those costs. If 

the SEC increased fees, it would increase the cost of an existing 

mandate on private entities required to pay those fees. CBO estimates that none of the bills would increase fees in an amount that 

would exceed the annual threshold for private-sector mandates established in UMRA ($160 million in 2018, adjusted annually for inflation). 

The CBO staff contacts for this estimate are Stephen Rabent (for 

federal costs) and Rachel Austin (for mandates). The estimate was 

reviewed by H. Samuel Papenfuss, Deputy Assistant Director for 

Budget Analysis. 

FEDERAL MANDATES STATEMENT

This information is provided in accordance with section 423 of 

the Unfunded Mandates Reform Act of 1995. 

The Committee has determined that the bill does not contain 

Federal mandates on the private sector. The Committee has determined that the bill does not impose a Federal intergovernmental 

mandate on State, local, or tribal governments. 

ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 

accommodations within the meaning of the section 102(b)(3) of the 

Congressional Accountability Act. 

EARMARK IDENTIFICATION

With respect to clause 9 of rule XXI of the Rules of the House 

of Representatives, the Committee has carefully reviewed the provisions of the bill and states that the provisions of the bill do not 

contain any congressional earmarks, limited tax benefits, or limited 

tariff benefits within the meaning of the rule. 

DUPLICATION OF FEDERAL PROGRAMS

In compliance with clause 3(c)(5) of rule XIII of the Rules of the 

House of Representatives, the Committee states that no provision 

of the bill establishes or reauthorizes: (1) a program of the Federal 

Government known to be duplicative of another Federal program; 

(2) a program included in any report from the Government Accountability Office to Congress pursuant to section 21 of Public 

Law 111–139; or (3) a program related to a program identified in 

the most recent Catalog of Federal Domestic Assistance, published 

pursuant to the Federal Program Information Act (Pub. L. No. 95– 

220, as amended by Pub. L. No. 98–169). 

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DISCLOSURE OF DIRECTED RULEMAKING

Pursuant to section 3(i) of H. Res. 5, (115th Congress), the following statement is made concerning directed rule makings: The 

Committee estimates that the bill requires no directed rule makings within the meaning of such section. 

SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title 

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

Section 2. Senior Investors Taskforce 

This section amends Section 4 of the Securities Exchange Act of 

1934 to establish an interdivisional Senior Investors Task Force 

within the Commission, composed of staff from the Division of Enforcement, Office of Compliance, Inspections and Examinations, 

and Office of Investor Education and Advocacy, to examine and 

identify challenges facing senior investors. Senior investors are defined as investors over the age of 65. 

The task force will issue a report every two years on its findings 

to the Committee on Banking, Housing, and Urban Affairs of the 

Senate and the Committee on Financial Services of the House of 

Representatives. The Task Force will terminate at the end of the 

10-year period after enactment. 

The SEC is empowered to establish and run the Task Force in 

a manner that compliments initiatives and activities of other divisions, offices, and task forces and to reduce bureaucratic 

redundancies. 

Section 3. GAO study 

This section cites that GAO is ordered to conduct a study within 

one year after enactment as to the economic costs associated with 

the financial exploitation of senior citizens. The section also requires the GAO study to include certain information. 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

and existing law in which no change is proposed is shown in 

roman): 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (new matter is printed in italic 

and existing law in which no change is proposed is shown in 

roman): 

9 

SECURITIES EXCHANGE ACT OF 1934 

TITLE I—REGULATION OF SECURITIES EXCHANGES 

* * * * * * * 

SECURITIES AND EXCHANGE COMMISSION

SEC. 4. (a) There is hereby established a Securities and Exchange 

Commission (hereinafter referred to as the ‘‘Commission’’) to be 

composed of five commissioners to be appointed by the President by 

and with the advice and consent of the Senate. Not more than 

three of such commissioners shall be members of the same political 

party, and in making appointments members of different political 

parties shall be appointed alternately as nearly as may be practicable. No commissioner shall engage in any other business, vocation, or employment than that of serving as commissioner, nor 

shall any commissioner participate, directly or indirectly, in any 

stock-market operations or transactions of a character subject to 

regulation by the Commission pursuant to this title. Each commissioner shall hold office for a term of five years and until his successor is appointed and has qualified, except that he shall not so 

continue to serve beyond the expiration of the next session of Congress subsequent to the expiration of said fixed term of office, and 

except (1) any commissioner appointed to fill a vacancy occurring 

prior to the expiration of the term for which his predecessor was 

appointed shall be appointed for the remainder of such term, and 

(2) the terms of office of the commissioners first taking office after 

the enactment of this title shall expire as designated by the President at the time of nomination, one at the end of one year, one at 

the end of two years, one at the end of three years, one at the end 

of four years, and one at the end of five years, after the date of the 

enactment of this title. 

(b) APPOINTMENT AND COMPENSATION OF STAFF AND LEASING AUTHORITY.— 

(1) APPOINTMENT AND COMPENSATION.—The Commission 

shall appoint and compensate officers, attorneys, economists, 

examiners, and other employees in accordance with section 

4802 of title 5, United States Code. 

(2) REPORTING OF INFORMATION.—In establishing and adjusting schedules of compensation and benefits for officers, attorneys, economists, examiners, and other employees of the Commission under applicable provisions of law, the Commission 

shall inform the heads of the agencies referred to under section 

1206 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833b) and Congress of such 

compensation and benefits and shall seek to maintain comparability with such agencies regarding compensation and benefits. 

(3) LEASING AUTHORITY.—Nothwithstanding any other provision of law, the Commission is authorized to enter directly into 

leases for real property for office, meeting, storage, and such 

other space as is necessary to carry out its functions, and shall 

be exempt from any General Services Administration space 

management regulations or directives. 

10 

(c) Notwithstanding any other provision of law, in accordance 

with regulations which the Commission shall prescribe to prevent 

conflicts of interest, the Commission may accept payment and reimbursement, in cash or in kind, from non-Federal agencies, organizations, and individuals for travel, subsistence, and other necessary expenses incurred by Commission members and employees 

in attending meetings and conferences concerning the functions or 

activities of the Commission. Any payment or reimbursement accepted shall be credited to the appropriated funds of the Commission. The amount of travel, subsistence, and other necessary expenses for members and employees paid or reimbursed under this 

subsection may exceed per diem amounts established in official 

travel regulations, but the Commission may include in its regulations under this subsection a limitation on such amounts. 

(d) Notwithstanding any other provision of law, former employers 

of participants in the Commission’s professional fellows programs 

may pay such participants their actual expenses for relocation to 

Washington, District of Columbia, to facilitate their participation in 

such programs, and program participants may accept such payments. 

(e) Notwithstanding any other provision of law, whenever any fee 

is required to be paid to the Commission pursuant to any provision 

of the securities laws or any other law, the Commission may provide by rule that such fee shall be paid in a manner other than in 

cash and the Commission may also specify the time that such fee 

shall be determined and paid relative to the filing of any statement 

or document with the Commission. 

(f) REIMBURSEMENT OF EXPENSES FOR ASSISTING FOREIGN SECURITIES AUTHORITIES.—Notwithstanding any other provision of law, 

the Commission may accept payment and reimbursement, in cash 

or in kind, from a foreign securities authority, or made on behalf 

of such authority, for necessary expenses incurred by the Commission, its members, and employees in carrying out any investigation 

pursuant to section 21(a)(2) of this title or in providing any other 

assistance to a foreign securities authority. Any payment or reimbursement accepted shall be considered a reimbursement to the appropriated funds of the Commission. 

(g) OFFICE OF THE INVESTOR ADVOCATE.— 

(1) OFFICE ESTABLISHED.—There is established within the 

Commission the Office of the Investor Advocate (in this subsection referred to as the ‘‘Office’’). 

(2) INVESTOR ADVOCATE.— 

(A) IN GENERAL.—The head of the Office shall be the Investor Advocate, who shall— 

(i) report directly to the Chairman; and 

(ii) be appointed by the Chairman, in consultation 

with the Commission, from among individuals having 

experience in advocating for the interests of investors 

in securities and investor protection issues, from the 

perspective of investors. 

(B) COMPENSATION.—The annual rate of pay for the Investor Advocate shall be equal to the highest rate of annual pay for other senior executives who report to the 

Chairman of the Commission. 

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(C) LIMITATION ON SERVICE.—An individual who serves 

as the Investor Advocate may not be employed by the 

Commission— 

(i) during the 2-year period ending on the date of appointment as Investor Advocate; or 

(ii) during the 5-year period beginning on the date 

on which the person ceases to serve as the Investor 

Advocate. 

(3) STAFF OF OFFICE.—The Investor Advocate, after consultation with the Chairman of the Commission, may retain or employ independent counsel, research staff, and service staff, as 

the Investor Advocate deems necessary to carry out the functions, powers, and duties of the Office. 

(4) FUNCTIONS OF THE INVESTOR ADVOCATE.—The Investor 

Advocate shall— 

(A) assist retail investors in resolving significant problems such investors may have with the Commission or 

with self-regulatory organizations; 

(B) identify areas in which investors would benefit from 

changes in the regulations of the Commission or the rules 

of self-regulatory organizations; 

(C) identify problems that investors have with financial 

service providers and investment products; 

(D) analyze the potential impact on investors of— 

(i) proposed regulations of the Commission; and 

(ii) proposed rules of self-regulatory organizations 

registered under this title; and 

(E) to the extent practicable, propose to the Commission 

changes in the regulations or orders of the Commission 

and to Congress any legislative, administrative, or personnel changes that may be appropriate to mitigate problems identified under this paragraph and to promote the 

interests of investors. 

(5) ACCESS TO DOCUMENTS.—The Commission shall ensure 

that the Investor Advocate has full access to the documents of 

the Commission and any self-regulatory organization, as necessary to carry out the functions of the Office. 

(6) ANNUAL REPORTS.— (A) REPORT ON OBJECTIVES.— (i) IN GENERAL.—Not later than June 30 of each 

year after 2010, the Investor Advocate shall submit to 

the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial 

Services of the House of Representatives a report on 

the objectives of the Investor Advocate for the following fiscal year. 

(ii) CONTENTS.—Each report required under clause 

(i) shall contain full and substantive analysis and explanation. 

(B) REPORT ON ACTIVITIES.— (i) IN GENERAL.—Not later than December 31 of 

each year after 2010, the Investor Advocate shall submit to the Committee on Banking, Housing, and 

Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a reVerDate Sep 11 2014 05:31 Aug 04, 2018 Jkt 079006 PO 00000 Frm 00011 Fmt 6659 Sfmt 6602 E:\HR\OC\HR886.XXX HR886
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port on the activities of the Investor Advocate during 

the immediately preceding fiscal year. 

(ii) CONTENTS.—Each report required under clause 

(i) shall include— 

(I) appropriate statistical information and full 

and substantive analysis; 

(II) information on steps that the Investor Advocate has taken during the reporting period to improve investor services and the responsiveness of 

the Commission and self-regulatory organizations 

to investor concerns; 

(III) a summary of the most serious problems 

encountered by investors during the reporting period; 

(IV) an inventory of the items described in subclause (III) that includes— 

(aa) identification of any action taken by 

the Commission or the self-regulatory organization and the result of such action; 

(bb) the length of time that each item has 

remained on such inventory; and 

(cc) for items on which no action has been 

taken, the reasons for inaction, and an identification of any official who is responsible for 

such action; 

(V) recommendations for such administrative 

and legislative actions as may be appropriate to 

resolve problems encountered by investors; and 

(VI) any other information, as determined appropriate by the Investor Advocate. 

(iii) INDEPENDENCE.—Each report required under 

this paragraph shall be provided directly to the Committees listed in clause (i) without any prior review or 

comment from the Commission, any commissioner, 

any other officer or employee of the Commission, or 

the Office of Management and Budget. 

(iv) CONFIDENTIALITY.—No report required under 

clause (i) may contain confidential information. 

(7) REGULATIONS.—The Commission shall, by regulation, establish procedures requiring a formal response to all recommendations submitted to the Commission by the Investor 

Advocate, not later than 3 months after the date of such submission. 

(8) OMBUDSMAN.— 

(A) APPOINTMENT.—Not later than 180 days after the 

date on which the first Investor Advocate is appointed 

under paragraph (2)(A)(i), the Investor Advocate shall appoint an Ombudsman, who shall report directly to the Investor Advocate. 

(B) DUTIES.—The Ombudsman appointed under subparagraph (A) shall— 

(i) act as a liaison between the Commission and any 

retail investor in resolving problems that retail investors may have with the Commission or with self-regulatory organizations; 

13 

(ii) review and make recommendations regarding 

policies and procedures to encourage persons to 

present questions to the Investor Advocate regarding 

compliance with the securities laws; and 

(iii) establish safeguards to maintain the confidentiality of communications between the persons described in clause (ii) and the Ombudsman. 

(C) LIMITATION.—In carrying out the duties of the Ombudsman under subparagraph (B), the Ombudsman shall 

utilize personnel of the Commission to the extent practicable. Nothing in this paragraph shall be construed as 

replacing, altering, or diminishing the activities of any ombudsman or similar office of any other agency. 

(D) REPORT.—The Ombudsman shall submit a semiannual report to the Investor Advocate that describes the 

activities and evaluates the effectiveness of the Ombudsman during the preceding year. The Investor Advocate 

shall include the reports required under this section in the 

reports required to be submitted by the Inspector Advocate 

under paragraph (6). 

(h) EXAMINERS.— (1) DIVISION OF TRADING AND MARKETS.—The Division of 

Trading and Markets of the Commission, or any successor organizational unit, shall have a staff of examiners who shall— 

(A) perform compliance inspections and examinations of 

entities under the jurisdiction of that Division; and 

(B) report to the Director of that Division. 

(2) DIVISION OF INVESTMENT MANAGEMENT.—The Division of 

Investment Management of the Commission, or any successor 

organizational unit, shall have a staff of examiners who shall— 

(A) perform compliance inspections and examinations of 

entities under the jurisdiction of that Division; and 

(B) report to the Director of that Division. 

(i) SECURITIES AND EXCHANGE COMMISSION RESERVE FUND.— 

(1) RESERVE FUND ESTABLISHED.—There is established in the 

Treasury of the United States a separate fund, to be known as 

the ‘‘Securities and Exchange Commission Reserve Fund’’ (referred to in this subsection as the ‘‘Reserve Fund’’). 

(2) RESERVE FUND AMOUNTS.— (A) IN GENERAL.—Except as provided in subparagraph 

(B), any registration fees collected by the Commission 

under section 6(b) of the Securities Act of 1933 (15 U.S.C. 

77f(b)) or section 24(f) of the Investment Company Act of 

1940 (15 U.S.C. 80a-24(f)) shall be deposited into the Reserve Fund. 

(B) LIMITATIONS.—For any 1 fiscal year— 

(i) the amount deposited in the Fund may not exceed $50,000,000; and 

(ii) the balance in the Fund may not exceed 

$100,000,000. 

(C) EXCESS FEES.—Any amounts in excess of the limitations described in subparagraph (B) that the Commission 

collects from registration fees under section 6(b) of the Securities Act of 1933 (15 U.S.C. 77f(b)) or section 24(f) of the 

Investment Company Act of 1940 (15 U.S.C. 80a-24(f)) 

14 

shall be deposited in the General Fund of the Treasury of 

the United States and shall not be available for obligation 

by the Commission. 

(3) USE OF AMOUNTS IN RESERVE FUND.—The Commission 

may obligate amounts in the Reserve Fund, not to exceed a 

total of $100,000,000 in any 1 fiscal year, as the Commission 

determines is necessary to carry out the functions of the Commission. Any amounts in the reserve fund shall remain available until expended. Not later than 10 days after the date on 

which the Commission obligates amounts under this paragraph, the Commission shall notify Congress of the date, 

amount, and purpose of the obligation. 

(4) RULE OF CONSTRUCTION.—Amounts collected and deposited in the Reserve Fund shall not be construed to be Government funds or appropriated monies and shall not be subject to 

apportionment for the purpose of chapter 15 of title 31, United 

States Code, or under any other authority. 

(j) OFFICE OF THE ADVOCATE FOR SMALL BUSINESS CAPITAL FORMATION.— 

(1) OFFICE ESTABLISHED.—There is established within the 

Commission the Office of the Advocate for Small Business Capital Formation (hereafter in this subsection referred to as the 

‘‘Office’’). 

(2) ADVOCATE FOR SMALL BUSINESS CAPITAL FORMATION.— 

(A) IN GENERAL.—The head of the Office shall be the Advocate for Small Business Capital Formation, who shall— 

(i) report directly to the Commission; and 

(ii) be appointed by the Commission, from among individuals having experience in advocating for the interests of small businesses and encouraging small 

business capital formation. 

(B) COMPENSATION.—The annual rate of pay for the Advocate for Small Business Capital Formation shall be 

equal to the highest rate of annual pay for other senior executives who report directly to the Commission. 

(C) NO CURRENT EMPLOYEE OF THE COMMISSION.—An individual may not be appointed as the Advocate for Small 

Business Capital Formation if the individual is currently 

employed by the Commission. 

(3) STAFF OF OFFICE.—The Advocate for Small Business Capital Formation, after consultation with the Commission, may 

retain or employ independent counsel, research staff, and service staff, as the Advocate for Small Business Capital Formation 

determines to be necessary to carry out the functions of the Office. 

(4) FUNCTIONS OF THE ADVOCATE FOR SMALL BUSINESS CAPITAL FORMATION.—The Advocate for Small Business Capital 

Formation shall— 

(A) assist small businesses and small business investors 

in resolving significant problems such businesses and investors may have with the Commission or with self-regulatory organizations; 

(B) identify areas in which small businesses and small 

business investors would benefit from changes in the reguVerDate Sep 11 2014 05:31 Aug 04, 2018 Jkt 079006 PO 00000 Frm 00014 Fmt 6659 Sfmt 6602 E:\HR\OC\HR886.XXX HR886
15 

lations of the Commission or the rules of self-regulatory organizations; 

(C) identify problems that small businesses have with 

securing access to capital, including any unique challenges 

to minority-owned small businesses, women-owned small 

businesses, and small businesses affected by hurricanes or 

other natural disasters; 

(D) analyze the potential impact on small businesses and 

small business investors of— 

(i) proposed regulations of the Commission that are 

likely to have a significant economic impact on small 

businesses and small business capital formation; and 

(ii) proposed rules that are likely to have a significant economic impact on small businesses and small 

business capital formation of self-regulatory organizations registered under this title; 

(E) conduct outreach to small businesses and small business investors, including through regional roundtables, in 

order to solicit views on relevant capital formation issues; 

(F) to the extent practicable, propose to the Commission 

changes in the regulations or orders of the Commission 

and to Congress any legislative, administrative, or personnel changes that may be appropriate to mitigate problems identified under this paragraph and to promote the 

interests of small businesses and small business investors; 

(G) consult with the Investor Advocate on proposed recommendations made under subparagraph (F); and 

(H) advise the Investor Advocate on issues related to 

small businesses and small business investors. 

(5) ACCESS TO DOCUMENTS.—The Commission shall ensure 

that the Advocate for Small Business Capital Formation has 

full access to the documents and information of the Commission and any self-regulatory organization, as necessary to carry 

out the functions of the Office. 

(6) ANNUAL REPORT ON ACTIVITIES.— (A) IN GENERAL.—Not later than December 31 of each 

year after 2015, the Advocate for Small Business Capital 

Formation shall submit to the Committee on Banking, 

Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report on the activities of the Advocate for Small 

Business Capital Formation during the immediately preceding fiscal year. 

(B) CONTENTS.—Each report required under subparagraph (A) shall include— 

(i) appropriate statistical information and full and 

substantive analysis; 

(ii) information on steps that the Advocate for Small 

Business Capital Formation has taken during the reporting period to improve small business services and 

the responsiveness of the Commission and self-regulatory organizations to small business and small business investor concerns; 

(iii) a summary of the most serious issues encountered by small businesses and small business invesVerDate Sep 11 2014 05:31 Aug 04, 2018 Jkt 079006 PO 00000 Frm 00015 Fmt 6659 Sfmt 6602 E:\HR\OC\HR886.XXX HR886
16 

tors, including any unique issues encountered by minority-owned small businesses, women-owned small 

businesses, and small businesses affected by hurricanes or other natural disasters and their investors, 

during the reporting period; 

(iv) an inventory of the items summarized under 

clause (iii) (including items summarized under such 

clause for any prior reporting period on which no action has been taken or that have not been resolved to 

the satisfaction of the Advocate for Small Business 

Capital Formation as of the beginning of the reporting 

period covered by the report) that includes— 

(I) identification of any action taken by the 

Commission or the self-regulatory organization 

and the result of such action; 

(II) the length of time that each item has remained on such inventory; and 

(III) for items on which no action has been 

taken, the reasons for inaction, and an identification of any official who is responsible for such action; 

(v) recommendations for such changes to the regulations, guidance and orders of the Commission and 

such legislative actions as may be appropriate to resolve problems with the Commission and self-regulatory organizations encountered by small businesses 

and small business investors and to encourage small 

business capital formation; and 

(vi) any other information, as determined appropriate by the Advocate for Small Business Capital Formation. 

(C) CONFIDENTIALITY.—No report required by subparagraph (A) may contain confidential information. 

(D) INDEPENDENCE.—Each report required under subparagraph (A) shall be provided directly to the committees 

of Congress listed in such subparagraph without any prior 

review or comment from the Commission, any commissioner, any other officer or employee of the Commission, or 

the Office of Management and Budget. 

(7) REGULATIONS.—The Commission shall establish procedures requiring a formal response to all recommendations submitted to the Commission by the Advocate for Small Business 

Capital Formation, not later than 3 months after the date of 

such submission. 

(8) GOVERNMENT-BUSINESS FORUM ON SMALL BUSINESS CAPITAL FORMATION.—The Advocate for Small Business Capital 

Formation shall be responsible for planning, organizing, and 

executing the annual Government-Business Forum on Small 

Business Capital Formation described in section 503 of the 

Small Business Investment Incentive Act of 1980 (15 U.S.C. 

80c–1). 

(9) RULE OF CONSTRUCTION.—Nothing in this subsection may 

be construed as replacing or reducing the responsibilities of the 

Investor Advocate with respect to small business investors. 

(k) SENIOR INVESTOR TASKFORCE.— 

17 

(1) ESTABLISHMENT.—There is established within the Commission the Senior Investor Taskforce (in this subsection referred to as the ‘‘Taskforce’’). 

(2) DIRECTOR OF THE TASKFORCE.—The head of the Taskforce 

shall be the Director, who shall— 

(A) report directly to the Chairman; and 

(B) be appointed by the Chairman, in consultation with 

the Commission, from among individuals— 

(i) currently employed by the Commission or from 

outside of the Commission; and 

(ii) having experience in advocating for the interests 

of senior investors. 

(3) STAFFING.—The Chairman shall ensure that— 

(A) the Taskforce is staffed sufficiently to carry out fully 

the requirements of this subsection; and 

(B) such staff shall include individuals from the Division 

of Enforcement, Office of Compliance Inspections and Examinations, and Office of Investor Education and Advocacy. 

(4) MINIMIZING DUPLICATION OF EFFORTS.—In organizing and 

staffing the Taskforce, the Chairman shall take such actions as 

may be necessary to minimize the duplication of efforts within 

the divisions and offices described under paragraph (3)(B) and 

any other divisions, offices, or taskforces of the Commission. 

(5) FUNCTIONS OF THE TASKFORCE.—The Taskforce shall— 

(A) identify challenges that senior investors encounter, including problems associated with financial exploitation and 

cognitive decline; 

(B) identify areas in which senior investors would benefit 

from changes in the regulations of the Commission or the 

rules of self-regulatory organizations; 

(C) coordinate, as appropriate, with other offices within 

the Commission, other taskforces that may be established 

within the Commission, self-regulatory organizations, and 

the Elder Justice Coordinating Council; and 

(D) consult, as appropriate, with State securities and law 

enforcement authorities, State insurance regulators, and 

other Federal agencies. 

(6) REPORT.—The Taskforce, in coordination, as appropriate, 

with the Office of the Investor Advocate and self-regulatory organizations, and in consultation, as appropriate, with State securities and law enforcement authorities, State insurance regulators, and Federal agencies, shall issue a report every 2 years 

to the Committee on Banking, Housing, and Urban Affairs of 

the Senate and the Committee on Financial Services of the 

House of Representatives, the first of which shall not be issued 

until after the report described in section 3 of the National Senior Investor Initiative Act of 2018 has been issued and considered by the Taskforce, containing— 

(A) appropriate statistical information and full and substantive analysis; 

(B) a summary of recent trends and innovations that 

have impacted the investment landscape for senior investors; 

18 

(C) a summary of regulatory initiatives that have concentrated on senior investors and industry practices related 

to senior investors; 

(D) key observations, best practices, and areas needing 

improvement, involving senior investors identified during 

examinations, enforcement actions, and investor education 

outreach; 

(E) a summary of the most serious issues encountered by 

senior investors, including issues involving financial products and services; 

(F) an analysis with regard to existing policies and procedures of brokers, dealers, investment advisers, and other 

market participants related to senior investors and senior 

investor-related topics and whether these policies and procedures need to be further developed or refined; 

(G) recommendations for such changes to the regulations, 

guidance, and orders of the Commission and self-regulatory 

organizations and such legislative actions as may be appropriate to resolve problems encountered by senior investors; 

and 

(H) any other information, as determined appropriate by 

the Director of the Taskforce. 

(7) SUNSET.—The Taskforce shall terminate after the end of 

the 10-year period beginning on the date of the enactment of 

this subsection, but may be reestablished by the Chairman. 

(8) SENIOR INVESTOR DEFINED.—For purposes of this subsection, the term ‘‘senior investor’’ means an investor over the 

age of 65. 

* * * * * * * 

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