I 
109TH CONGRESS 
1ST SESSION H. R. 4618 
To amend the Securities Exchange Act of 1934 to establish rules and proce-
dures for the delegation of compliance and inspections authority to the 
operating divisions of the Securities and Exchange Commission, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 17, 2005 
Mr. FOSSELLA (for himself and Mr. CASTLE) introduced the following bill; 
which was referred to the Committee on Financial Services 
A BILL 
To amend the Securities Exchange Act of 1934 to establish 
rules and procedures for the delegation of compliance 
and inspections authority to the operating divisions of 
the Securities and Exchange Commission, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Compliance, Examina-
tions, and Inspections Restructuring Act of 2005’’.
SEC. 2. ORGANIZATION AND CONDUCT OF THE DIVISIONS 
AND OFFICES OF THE SECURITIES AND EX-
CHANGE COMMISSION. 
Section 4 of the Securities Exchange Act of 1934 (15 
U.S.C. 78d) is amended by adding at the end the following 
new subsections: 
‘‘(g) DIVISIONS
AND OFFICES
OF
THE COMMIS-
SION.— 
‘‘(1) COMPLIANCE, INSPECTIONS, AND EXAMI-
NATIONS.—The authority that the Commission has 
to conduct inspections and examinations of reg-
istered brokers or dealers (15 U.S.C. 78q(b)), reg-
istered investment companies (15 U.S.C. 80a– 
30(b)), and registered investment advisers (15 
U.S.C. 80b–4) shall be vested in the administrative 
divisions or offices to which the Commission has del-
egated pursuant to section 4A of this Act the au-
thority to administer its responsibilities under this 
Act, the Investment Company Act of 1940 (15 
U.S.C. 80a), and the Investment Advisers Act of 
1940 (15 U.S.C. 80b). The Commission shall report 
to Congress pursuant to section 21(a) of this Act no 
less frequently than every 5 years from the enact-
ment of this subsection, and shall in that report 
state its views on the continuing efficacy, effective-
ness, and efficiency of requiring the administrative
divisions or offices to conduct inspections and exami-
nations of registered brokers or dealers, registered 
investment companies, and registered investment ad-
visers. 
‘‘(2) CLOSURE OF OPEN MATTERS.—Not less 
frequently than every 120 days during a period in 
which an enforcement division or office of the Com-
mission with respect to a formal or informal inquiry, 
or an administrative division or office of the Com-
mission with respect to an inspection or examina-
tion, is conducting an inquiry or inspection, that di-
vision or office shall notify in writing the person who 
is the subject of that inquiry or inspection to inform 
such person of the status of the inquiry or inspec-
tion. When that division or office has completed its 
inquiry or inspection, that division or office shall, 
within 10 days of completing that inquiry or inspec-
tion, notify in writing the person who was the sub-
ject of that inquiry or inspection that the inquiry or 
inspection has been completed. 
‘‘(3) SWEEP EXAMINATIONS OR INSPECTIONS.— 
‘‘(A) NOTICE AND APPROVAL.—Before an 
administrative division or office of the Commis-
sion may conduct an inspection of registered 
brokers or dealers, registered investment com-