113TH CONGRESS 

1ST SESSION H. R. 1062 

AN ACT 

To improve the consideration by the Securities and Exchange 

Commission of the costs and benefits of its regulations 

and orders. 

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

2 This Act may be cited as the ‘‘SEC Regulatory Ac3 countability Act’’. 

4 SEC. 2. CONSIDERATION BY THE SECURITIES AND EX5 CHANGE COMMISSION OF THE COSTS AND 

6 BENEFITS OF ITS REGULATIONS AND CER7 TAIN OTHER AGENCY ACTIONS. 

8 Section 23 of the Securities Exchange Act of 1934 

9 (15 U.S.C. 78w) is amended by adding at the end the fol10 lowing: 

11 ‘‘(e) CONSIDERATION OF COSTS AND BENEFITS.— 

12 ‘‘(1) IN GENERAL.—Before issuing a regulation 

13 under the securities laws, as defined in section 3(a), 

14 the Commission shall— 

15 ‘‘(A) clearly identify the nature and source 

16 of the problem that the proposed regulation is 

17 designed to address, as well as assess the sig18 nificance of that problem, to enable assessment 

19 of whether any new regulation is warranted; 

20 ‘‘(B) utilize the Chief Economist to assess 

21 the costs and benefits, both qualitative and 

22 quantitative, of the intended regulation and 

23 propose or adopt a regulation only on a rea24 soned determination that the benefits of the in25 tended regulation justify the costs of the regula26 tion; 
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1 ‘‘(C) identify and assess available alter2 natives to the regulation that were considered, 

3 including modification of an existing regulation, 

4 together with an explanation of why the regula5 tion meets the regulatory objectives more effec6 tively than the alternatives; and 

7 ‘‘(D) ensure that any regulation is acces8 sible, consistent, written in plain language, and 

9 easy to understand and shall measure, and seek 

10 to improve, the actual results of regulatory re11 quirements. 

12 ‘‘(2) CONSIDERATIONS AND ACTIONS.— 

13 ‘‘(A) REQUIRED ACTIONS.—In deciding 

14 whether and how to regulate, the Commission 

15 shall assess the costs and benefits of available 

16 regulatory alternatives, including the alternative 

17 of not regulating, and choose the approach that 

18 maximizes net benefits. Specifically, the Com19 mission shall— 

20 ‘‘(i) consistent with the requirements 

21 of section 3(f) (15 U.S.C. 78c(f)), section 

22 2(b) of the Securities Act of 1933 (15 

23 U.S.C. 77b(b)), section 202(c) of the In24 vestment Advisers Act of 1940 (15 U.S.C. 

25 80b–2(c)), and section 2(c) of the Invest-
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1 ment Company Act of 1940 (15 U.S.C. 

2 80a–2(c)), consider whether the rule3 making will promote efficiency, competi4 tion, and capital formation; 

5 ‘‘(ii) evaluate whether, consistent with 

6 obtaining regulatory objectives, the regula7 tion is tailored to impose the least burden 

8 on society, including market participants, 

9 individuals, businesses of differing sizes, 

10 and other entities (including State and 

11 local governmental entities), taking into ac12 count, to the extent practicable, the cumu13 lative costs of regulations; and 

14 ‘‘(iii) evaluate whether the regulation 

15 is inconsistent, incompatible, or duplicative 

16 of other Federal regulations. 

17 ‘‘(B) ADDITIONAL CONSIDERATIONS.—In 

18 addition, in making a reasoned determination of 

19 the costs and benefits of a potential regulation, 

20 the Commission shall, to the extent that each is 

21 relevant to the particular proposed regulation, 

22 take into consideration the impact of the regu23 lation on— 

24 ‘‘(i) investor choice; 
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1 ‘‘(ii) market liquidity in the securities 

2 markets; and 

3 ‘‘(iii) small businesses. 

4 ‘‘(3) EXPLANATION AND COMMENTS.—The 

5 Commission shall explain in its final rule the nature 

6 of comments that it received, including those from 

7 the industry or consumer groups concerning the po8 tential costs or benefits of the proposed rule or pro9 posed rule change, and shall provide a response to 

10 those comments in its final rule, including an expla11 nation of any changes that were made in response 

12 to those comments and the reasons that the Com13 mission did not incorporate those industry group 

14 concerns related to the potential costs or benefits in 

15 the final rule. 

16 ‘‘(4) REVIEW OF EXISTING REGULATIONS.—Not 

17 later than 1 year after the date of enactment of the 

18 SEC Regulatory Accountability Act, and every 5 

19 years thereafter, the Commission shall review its 

20 regulations to determine whether any such regula21 tions are outmoded, ineffective, insufficient, or ex22 cessively burdensome, and shall modify, streamline, 

23 expand, or repeal them in accordance with such re24 view. In reviewing any regulation (including, not25 withstanding paragraph (6), a regulation issued in 
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1 accordance with formal rulemaking provisions) that 

2 subjects issuers with a public float of $250,000,000 

3 or less to the attestation and reporting requirements 

4 of section 404(b) of the Sarbanes-Oxley Act of 2002 

5 (15 U.S.C. 7262(b)), the Commission shall specifi6 cally take into account the large burden of such reg7 ulation when compared to the benefit of such regula8 tion. 

9 ‘‘(5) POST-ADOPTION IMPACT ASSESSMENT.— 

10 ‘‘(A) IN GENERAL.—Whenever the Com11 mission adopts or amends a regulation des12 ignated as a ‘major rule’ within the meaning of 

13 section 804(2) of title 5, United States Code, it 

14 shall state, in its adopting release, the fol15 lowing: 

16 ‘‘(i) The purposes and intended con17 sequences of the regulation. 

18 ‘‘(ii) Appropriate post-implementation 

19 quantitative and qualitative metrics to 

20 measure the economic impact of the regu21 lation and to measure the extent to which 

22 the regulation has accomplished the stated 

23 purposes. 

24 ‘‘(iii) The assessment plan that will be 

25 used, consistent with the requirements of 
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1 subparagraph (B) and under the super2 vision of the Chief Economist of the Com3 mission, to assess whether the regulation 

4 has achieved the stated purposes. 

5 ‘‘(iv) Any unintended or negative con6 sequences that the Commission foresees 

7 may result from the regulation. 

8 ‘‘(B) REQUIREMENTS OF ASSESSMENT

9 PLAN AND REPORT.— 

10 ‘‘(i) REQUIREMENTS OF PLAN.—The 

11 assessment plan required under this para12 graph shall consider the costs, benefits, 

13 and intended and unintended consequences 

14 of the regulation. The plan shall specify 

15 the data to be collected, the methods for 

16 collection and analysis of the data and a 

17 date for completion of the assessment. The 

18 assessment plan shall include an analysis 

19 of any jobs added or lost as a result of the 

20 regulation, differentiating between public 

21 and private sector jobs. 

22 ‘‘(ii) SUBMISSION AND PUBLICATION

23 OF REPORT.—The Chief Economist shall 

24 submit the completed assessment report to 

25 the Commission no later than 2 years after 
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1 the publication of the adopting release, un2 less the Commission, at the request of the 

3 Chief Economist, has published at least 90 

4 days before such date a notice in the Fed5 eral Register extending the date and pro6 viding specific reasons why an extension is 

7 necessary. Within 7 days after submission 

8 to the Commission of the final assessment 

9 report, it shall be published in the Federal 

10 Register for notice and comment. Any ma11 terial modification of the plan, as nec12 essary to assess unforeseen aspects or con13 sequences of the regulation, shall be 

14 promptly published in the Federal Register 

15 for notice and comment. 

16 ‘‘(iii) DATA COLLECTION NOT SUB17 JECT TO NOTICE AND COMMENT REQUIRE18 MENTS.—If the Commission has published 

19 its assessment plan for notice and com20 ment, specifying the data to be collected 

21 and method of collection, at least 30 days 

22 prior to adoption of a final regulation or 

23 amendment, such collection of data shall 

24 not be subject to the notice and comment 

25 requirements in section 3506(c) of title 44, 
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1 United States Code (commonly referred to 

2 as the Paperwork Reduction Act). Any ma3 terial modifications of the plan that require 

4 collection of data not previously published 

5 for notice and comment shall also be ex6 empt from such requirements if the Com7 mission has published notice for comment 

8 in the Federal Register of the additional 

9 data to be collected, at least 30 days prior 

10 to initiation of data collection. 

11 ‘‘(iv) FINAL ACTION.—Not later than 

12 180 days after publication of the assess13 ment report in the Federal Register, the 

14 Commission shall issue for notice and com15 ment a proposal to amend or rescind the 

16 regulation, or publish a notice that the 

17 Commission has determined that no action 

18 will be taken on the regulation. Such a no19 tice will be deemed a final agency action. 

20 ‘‘(6) COVERED REGULATIONS AND OTHER

21 AGENCY ACTIONS.—Solely as used in this subsection, 

22 the term ‘regulation’— 

23 ‘‘(A) means an agency statement of gen24 eral applicability and future effect that is de25 signed to implement, interpret, or prescribe law 
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1 or policy or to describe the procedure or prac2 tice requirements of an agency, including rules, 

3 orders of general applicability, interpretive re4 leases, and other statements of general applica5 bility that the agency intends to have the force 

6 and effect of law; and 

7 ‘‘(B) does not include— 

8 ‘‘(i) a regulation issued in accordance 

9 with the formal rulemaking provisions of 

10 section 556 or 557 of title 5, United States 

11 Code; 

12 ‘‘(ii) a regulation that is limited to 

13 agency organization, management, or per14 sonnel matters; 

15 ‘‘(iii) a regulation promulgated pursu16 ant to statutory authority that expressly 

17 prohibits compliance with this provision; 

18 and 

19 ‘‘(iv) a regulation that is certified by 

20 the agency to be an emergency action, if 

21 such certification is published in the Fed22 eral Register.’’. 
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1 SEC. 3. SENSE OF CONGRESS RELATING TO OTHER REGU2 LATORY ENTITIES. 

3 It is the sense of the Congress that the Public Com4 pany Accounting Oversight Board should also follow the 

5 requirements of section 23(e) of such Act, as added by 

6 this title. 

7 SEC. 4. ACCOUNTABILITY PROVISION RELATING TO OTHER 

8 REGULATORY ENTITIES. 

9 A rule adopted by the Municipal Securities Rule10 making Board or any national securities association reg11 istered under section 15A of the Securities Exchange Act 

12 of 1934 (15 U.S.C. 78o–3) shall not take effect unless 

13 the Securities and Exchange Commission determines that, 

14 in adopting such rule, the Board or association has com15 plied with the requirements of section 23(e) of such Act, 

16 as added by section 2, in the same manner as is required 

17 by the Commission under such section 23(e). 

Passed the House of Representatives May 17, 2013. 

Attest: 

Clerk. 
113TH CONGRESS 

1ST SESSION H. R. 1062 

AN ACT 

To improve the consideration by the Securities and 

of its regulations and orders. Exchange Commission of the costs and benefits