203
ling interest in that registered investment company
in a trustee or fiduciary capacity, such person
shall—
‘‘(A) if it holds the shares in a trustee or
fiduciary capacity with respect to any employee
benefit plan subject to the Employee Retire-
ment Income Security Act of 1974, transfer the
power to vote the shares of the investment com-
pany through to another person acting in a fi-
duciary capacity with respect to the plan who is
not an affiliated person of that investment ad-
viser or any affiliated person thereof; or
‘‘(B) if it holds the shares in a trustee or
fiduciary capacity with respect to any person or
entity other than an employee benefit plan sub-
ject to the Employee Retirement Income Secu-
rity Act of 1974—
‘‘(i) transfer the power to vote the
shares of the investment company through
to—
‘‘(I) the beneficial owners of the
shares;
‘‘(II) another person acting in a
fiduciary capacity who is not an affili-
204
ated person of that investment adviser
or any affiliated person thereof; or
‘‘(III) any person authorized to
receive
statements
and
information
with respect to the trust who is not an
affiliated person of that investment
adviser or any affiliated person there-
of;
‘‘(ii) vote the shares of the investment
company held by it in the same proportion
as shares held by all other shareholders of
the investment company; or
‘‘(iii) vote the shares of the invest-
ment
company
as
otherwise
permitted
under such rules, regulations, or orders as
the Commission may prescribe or issue
consistent with the protection of investors.
‘‘(2) EXEMPTION.—Paragraph (1) shall not
apply to any investment adviser to a registered in-
vestment company, or any affiliated person of that
investment adviser, that holds shares of the invest-
ment company in a trustee or fiduciary capacity if
that registered investment company consists solely of
assets held in such capacities.
205
‘‘(3) SAFE HARBOR.—No investment adviser to
a registered investment company or any affiliated
person of such investment adviser shall be deemed to
have acted unlawfully or to have breached a fidu-
ciary duty under State or Federal law solely by rea-
son of acting in accordance with clause (i), (ii), or
(iii) of paragraph (1)(B).’’.
SEC. 223. CONFORMING CHANGE IN DEFINITION.
Section 2(a)(5) of the Investment Company Act of
1940 (15 U.S.C. 80a–2(a)(5)) is amended by striking
‘‘(A) a banking institution organized under the laws of the
United States’’ and inserting ‘‘(A) a depository institution
(as defined in section 3 of the Federal Deposit Insurance
Act) or a branch or agency of a foreign bank (as such
terms are defined in section 1(b) of the International
Banking Act of 1978)’’.
SEC. 224. CONFORMING AMENDMENT.
Section 202 of the Investment Advisers Act of 1940
(15 U.S.C. 80b–2) is amended by adding at the end the
following new subsection:
‘‘(c)
CONSIDERATION
OF
PROMOTION
OF
EFFI-
CIENCY,
COMPETITION,
AND
CAPITAL
FORMATION.—
Whenever pursuant to this title the Commission is en-
gaged in rulemaking and is required to consider or deter-
mine whether an action is necessary or appropriate in the
206
public interest, the Commission shall also consider, in ad-
dition to the protection of investors, whether the action
will promote efficiency, competition, and capital forma-
tion.’’.
SEC. 225. EFFECTIVE DATE.
This subtitle shall take effect 90 days after the date
of the enactment of this Act.
Subtitle
C—Securities
and
Ex-
change Commission Supervision
of
Investment
Bank
Holding
Companies
SEC. 231. SUPERVISION OF INVESTMENT BANK HOLDING
COMPANIES
BY
THE
SECURITIES
AND
EX-
CHANGE COMMISSION.
(a) AMENDMENT.—Section 17 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78q) is amended—
(1) by redesignating subsection (i) as subsection
(l); and
(2) by inserting after subsection (h) the follow-
ing new subsections:
‘‘(i) INVESTMENT BANK HOLDING COMPANIES.—
‘‘(1) ELECTIVE
SUPERVISION
OF
AN
INVEST-
MENT
BANK
HOLDING
COMPANY
NOT
HAVING
A
BANK OR SAVINGS ASSOCIATION AFFILIATE.—
207
‘‘(A) IN GENERAL.—An investment bank
holding company that is not—
‘‘(i) an affiliate of a wholesale finan-
cial institution, an insured bank (other
than an institution described in subpara-
graph (D), (F), or (G) of section 2(c)(2),
or held under section 4(f), of the Bank
Holding Company Act of 1956), or a sav-
ings association;
‘‘(ii) a foreign bank, foreign company,
or company that is described in section
8(a) of the International Banking Act of
1978; or
‘‘(iii) a foreign bank that controls, di-
rectly or indirectly, a corporation chartered
under section 25A of the Federal Reserve
Act,
may elect to become supervised by filing with
the Commission a notice of intention to become
supervised, pursuant to subparagraph (B) of
this paragraph. Any investment bank holding
company filing such a notice shall be supervised
in accordance with this section and comply with
the rules promulgated by the Commission appli-