IB 

Union Calendar No. 91 

116TH CONGRESS 

1ST SESSION H. R. 1815 

[Report No. 116–123] 

To require the Securities and Exchange Commission, when developing rules 

and regulations about disclosures to retail investors, to conduct investor 

testing, including a survey and interviews of retail investors, and for 

other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 18, 2019 

Mr. CASTEN of Illinois introduced the following bill; which was referred to the 

Committee on Financial Services 

JUNE 20, 2019 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

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

[For text of introduced bill, see copy of bill as introduced on March 18, 2019] 


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•HR 1815 RH

A BILL 

To require the Securities and Exchange Commission, when 

developing rules and regulations about disclosures to retail investors, to conduct investor testing, including a 

survey and interviews of retail investors, and for other 

purposes. 


pamtmann on DSKBFK8HB2PROD with BILLS
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•HR 1815 RH

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 ‘‘SEC Disclosure Effec5 tiveness Testing Act’’. 

6 SEC. 2. DISCLOSURE TESTING. 

7 (a) IN GENERAL.—Section 23(a) of the Securities Ex8 change Act of 1934 (15 U.S.C. 78w(a)) is amended by add9 ing at the end the following: 

10 ‘‘(4) INVESTOR TESTING.— 

11 ‘‘(A) IN GENERAL.—The Commission shall en12 gage in investor testing prior to issuing any rule or 

13 regulation which designates documents or information 

14 to be disclosed under the securities laws, if such docu15 ments or information— 

16 ‘‘(i) are primarily used by retail investors, 

17 as determined by the Commission; and 

18 ‘‘(ii) are intended to be used by retail inves19 tors to make informed investment decisions or to 

20 understand the investments held by the retail in21 vestor. 

22 ‘‘(B) CONTENTS.—Investor testing conducted 

23 pursuant to subparagraph (A) shall include the fol24 lowing: 


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•HR 1815 RH

1 ‘‘(i) Qualitative testing in the form of one2 on-one cognitive interviews of retail investors 

3 about documents or information, or samples of 

4 such documents or information, to be provided. 

5 ‘‘(ii) A nationwide survey of retail inves6 tors, designed to complement the interviews 

7 under clause (i), on— 

8 ‘‘(I) the usefulness of such documents 

9 or information, or samples of such docu10 ments or information; 

11 ‘‘(II) the proposed format of such docu12 ments or information, or samples of such 

13 documents or information; and 

14 ‘‘(III) delivery preferences of such doc15 uments or information, or samples of such 

16 documents or information. 

17 ‘‘(iii) Analysis and publication in the Fed18 eral Register of the results of the survey and 

19 interviews. 

20 ‘‘(iv) An opportunity for the public to com21 ment on such results published in the Federal 

22 Register. 

23 ‘‘(C) SUBSTANTIVE CHANGES.—If the Commis24 sion, in the period between engaging in investor test25 ing and publishing a final rule, makes substantive 


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•HR 1815 RH

1 changes to such rule that the Commission determines 

2 would have a significant impact on retail investors, 

3 the Commission shall again engage in investor test4 ing. 

5 ‘‘(D) PUBLIC AVAILABILITY OF RETAIL TESTING

6 RESULTS.—The Commission shall make the data and 

7 results of any investor testing performed pursuant to 

8 this paragraph available to the public.’’. 

9 (b) PARTICIPATION OF INVESTOR ADVOCATE.—Section 

10 4(g) of the Securities Exchange Act of 1934 (15 U.S.C. 

11 78d(g)) is amended— 

12 (1) in paragraph (4)— 

13 (A) in subparagraph (D)(ii), by striking 

14 ‘‘and’’ at the end; 

15 (B) by redesignating subparagraph (E) as 

16 subparagraph (F); and 

17 (C) by inserting after subparagraph (D) the 

18 following: 

19 ‘‘(E) engage in investor testing— 

20 ‘‘(i) as necessary to carry out the func21 tions of the Office; and 

22 ‘‘(ii) under section 23(a)(4), if the 

23 Commission determines it appropriate; 

24 and’’; and 

25 (2) by adding at the end the following: 


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•HR 1815 RH

1 ‘‘(9) PUBLICATION OF DATA AND RESULTS OF IN2 VESTOR TESTING.—With respect to any investor test3 ing carried out by the Investor Advocate pursuant to 

4 paragraph (4)(E), the Investor Advocate may make 

5 the data and results of such investor testing available 

6 to the public, and without further review or editing 

7 by the Commission.’’. 

8 (c) PRIOR RULES.— 

9 (1) IN GENERAL.—For any final rule or regula10 tion issued by the Securities and Exchange Commis11 sion (in this subsection referred to as the ‘‘Commis12 sion’’) before the date of the enactment of this Act that 

13 would be subject to investor testing under section 

14 23(a)(4) of the Securities Exchange Act of 1934, had 

15 such rule been issued on or after the date of enactment 

16 of this Act, the Commission shall perform investor 

17 testing with respect to such rule or regulation that in18 cludes the contents described in such section 23(a)(4). 

19 (2) SCHEDULE.—The Commission shall, not 

20 later than 6 months after the date of the enactment 

21 of this Act, establish a schedule for completing any 

22 investor testing required under paragraph (1) that 

23 prioritizes testing of any final rules and regulations 

24 that designate documents or information central to 

25 retail investor decision making. 


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•HR 1815 RH

1 (3) REPORT.—The Commission shall issue a re2 port to Congress each year containing the following: 

3 (A) The status of any investor testing re4 quired under paragraph (1). 

5 (B) The results of any investor testing com6 pleted under paragraph (1). 

7 (C) Any priorities the Commission has, 

8 based on results of investor testing required by 

9 paragraph (1), for— 

10 (i) revising or eliminating any final 

11 rule or regulation designating documents or 

12 information to be provided to retail inves13 tors; and 

14 (ii) revising any other final rule or 

15 regulation to supplement revised or elimi16 nated rules designating documents or infor17 mation to be provided to retail investors. 


pamtmann on DSKBFK8HB2PROD with BILLS
Union Calendar No. 91 

116TH CONGRESS 

1ST SESSION H. R. 1815 

[Report No. 116–123] 

A BILL 

To require the Securities and Exchange Commistail investors, and for other purposes. testing, including a survey and interviews of re- disclosures to retail investors, to conduct investor sion, when developing rules and regulations about 

JUNE 20, 2019 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


pamtmann on DSKBFK8HB2PROD with BILLS