I 

116TH CONGRESS 

1ST SESSION H. R. 1815 

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 

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. 

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’’. 


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1 SEC. 2. DISCLOSURE TESTING. 

2 (a) IN GENERAL.—Section 23(a) of the Securities 

3 Exchange Act of 1934 is amended by adding at the end 

4 the following: 

5 ‘‘(4) INVESTOR TESTING.— 

6 ‘‘(A) IN GENERAL.—The Commission, prior to 

7 making any rule or regulation pursuant to any pro8 vision of the securities laws which would designate 

9 documents or information to be provided to a retail 

10 investor, shall engage in investor testing to assess 

11 whether designating such documents or information 

12 will achieve the purpose intended by the Commis13 sion. 

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

15 pursuant to subparagraph (A) shall include the fol16 lowing: 

17 ‘‘(i) Qualitative testing in the form of one18 on-one cognitive interviews of retail investors 

19 about documents or information, or samples of 

20 such documents or information, to be provided. 

21 ‘‘(ii) A nationwide survey of retail inves22 tors, designed to complement the interviews 

23 under clause (i), on— 

24 ‘‘(I) the usefulness of such documents 

25 or information, or samples of such docu26 ments or information; 


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1 ‘‘(II) the proposed format of such doc2 uments or information, or samples of such 

3 documents or information; and 

4 ‘‘(III) delivery preferences of such 

5 documents or information, or samples of 

6 such documents or information. 

7 ‘‘(iii) Analysis and publication in the Fed8 eral Register of the results of the survey and 

9 interviews. 

10 ‘‘(iv) An opportunity for the public to com11 ment on such results published in the Federal 

12 Register. 

13 ‘‘(C) SUBSTANTIVE CHANGES.—If the Commis14 sion, in the period between engaging in investor test15 ing and publishing a final rule, makes substantive 

16 changes to such rule that the Commission deter17 mines would have a significant impact on investors, 

18 the Commission shall again engage in investor test19 ing.’’. 

20 (b) PRIOR RULES.— 

21 (1) IN GENERAL.—For any final rule or regula22 tion issued by the Securities and Exchange Commis23 sion (in this subsection referred to as the ‘‘Commis24 sion’’) before the date of the enactment of this Act, 

25 pursuant to any provision of the securities laws (as 


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1 such term is defined in section 3(a) of the Securities 

2 Exchange Act of 1934) which designates documents 

3 or information to be provided to a retail investor, 

4 the Commission shall perform investor testing that 

5 includes the contents described in section 23(a)(4) of 

6 the Securities Exchange Act of 1934. 

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

8 later than 6 months after the date of the enactment 

9 of this Act, establish a schedule for completing any 

10 investor testing required under paragraph (1) that 

11 prioritizes testing of any final rules and regulations 

12 that designate documents or information central to 

13 retail investor decision making. 

14 (3) REPORT.—The Commission shall issue a re15 port to Congress each year containing the following: 

16 (A) The status of any investor testing re17 quired under paragraph (1). 

18 (B) The results of any investor testing 

19 completed under paragraph (1). 

20 (C) Any priorities the Commission has, 

21 based on results of investor testing required by 

22 paragraph (1), for— 

23 (i) revising or eliminating any final 

24 rule or regulation designating documents 


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1 or information to be provided to retail in2 vestors; and 

3 (ii) revising any other final rule or 

4 regulation to supplement revised or elimi5 nated rules designating documents or in6 formation to be provided to retail inves7 tors. 

Æ 


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