I 
114TH CONGRESS 
2D SESSION 
H. R. 5429 
To improve the consideration by the Securities and Exchange Commission 
of the costs and benefits of its regulations and orders. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 9, 2016 
Mr. GARRETT (for himself and Mr. HURT of Virginia) introduced the following 
bill; which was referred to the Committee on Financial Services 
A BILL 
To improve the consideration by the Securities and Exchange 
Commission of the costs and benefits of its regulations 
and orders. 
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 ‘‘SEC Regulatory Ac-
countability Act’’. 
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SEC. 2. CONSIDERATION BY THE SECURITIES AND EX-
CHANGE COMMISSION OF THE COSTS AND 
BENEFITS OF ITS REGULATIONS AND CER-
TAIN OTHER AGENCY ACTIONS. 
Section 23 of the Securities Exchange Act of 1934 
(15 U.S.C. 78w) is amended by adding at the end the fol-
lowing: 
‘‘(e) CONSIDERATION OF COSTS AND BENEFITS.— 
‘‘(1) IN GENERAL.—Before issuing a regulation 
under the securities laws, as defined in section 3(a), 
the Commission shall— 
‘‘(A) clearly identify the nature and source 
of the problem that the proposed regulation is 
designed to address, as well as assess the sig-
nificance of that problem, to enable assessment 
of whether any new regulation is warranted; 
‘‘(B) utilize the Chief Economist to assess 
the costs and benefits, both qualitative and 
quantitative, of the intended regulation and 
propose or adopt a regulation only on a rea-
soned determination that the benefits of the in-
tended regulation justify the costs of the regula-
tion; 
‘‘(C) identify and assess available alter-
natives to the regulation that were considered, 
including modification of an existing regulation, 
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together with an explanation of why the regula-
tion meets the regulatory objectives more effec-
tively than the alternatives; and 
‘‘(D) ensure that any regulation is acces-
sible, consistent, written in plain language, and 
easy to understand and shall measure, and seek 
to improve, the actual results of regulatory re-
quirements. 
‘‘(2) CONSIDERATIONS AND ACTIONS.— 
‘‘(A) REQUIRED
ACTIONS.—In deciding 
whether and how to regulate, the Commission 
shall assess the costs and benefits of available 
regulatory alternatives, including the alternative 
of not regulating, and choose the approach that 
maximizes net benefits. Specifically, the Com-
mission shall— 
‘‘(i) consistent with the requirements 
of section 3(f) (15 U.S.C. 78c(f)), section 
2(b) of the Securities Act of 1933 (15 
U.S.C. 77b(b)), section 202(c) of the In-
vestment Advisers Act of 1940 (15 U.S.C. 
80b–2(c)), and section 2(c) of the Invest-
ment Company Act of 1940 (15 U.S.C. 
80a–2(c)), consider whether the rule-
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making will promote efficiency, competi-
tion, and capital formation; 
‘‘(ii) evaluate whether, consistent with 
obtaining regulatory objectives, the regula-
tion is tailored to impose the least burden 
on society, including market participants, 
individuals, businesses of differing sizes, 
and other entities (including State and 
local governmental entities), taking into ac-
count, to the extent practicable, the cumu-
lative costs of regulations; and 
‘‘(iii) evaluate whether the regulation 
is inconsistent, incompatible, or duplicative 
of other Federal regulations. 
‘‘(B) ADDITIONAL
CONSIDERATIONS.—In 
addition, in making a reasoned determination of 
the costs and benefits of a potential regulation, 
the Commission shall, to the extent that each is 
relevant to the particular proposed regulation, 
take into consideration the impact of the regu-
lation on— 
‘‘(i) investor choice; 
‘‘(ii) market liquidity in the securities 
markets; and 
‘‘(iii) small businesses. 
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‘‘(3) EXPLANATION
AND
COMMENTS.—The 
Commission shall explain in its final rule the nature 
of comments that it received, including those from 
the industry or consumer groups concerning the po-
tential costs or benefits of the proposed rule or pro-
posed rule change, and shall provide a response to 
those comments in its final rule, including an expla-
nation of any changes that were made in response 
to those comments and the reasons that the Com-
mission did not incorporate those industry group 
concerns related to the potential costs or benefits in 
the final rule. 
‘‘(4) REVIEW OF EXISTING REGULATIONS.—Not 
later than 1 year after the date of enactment of the 
SEC Regulatory Accountability Act, and every 5 
years thereafter, the Commission shall review its 
regulations to determine whether any such regula-
tions are outmoded, ineffective, insufficient, or ex-
cessively burdensome, and shall modify, streamline, 
expand, or repeal them in accordance with such re-
view. In reviewing any regulation (including, not-
withstanding paragraph (6), a regulation issued in 
accordance with formal rulemaking provisions) that 
subjects issuers with a public float of $250,000,000 
or less to the attestation and reporting requirements 
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of section 404(b) of the Sarbanes-Oxley Act of 2002 
(15 U.S.C. 7262(b)), the Commission shall specifi-
cally take into account the large burden of such reg-
ulation when compared to the benefit of such regula-
tion. 
‘‘(5) POST-ADOPTION IMPACT ASSESSMENT.— 
‘‘(A) IN
GENERAL.—Whenever the Com-
mission adopts or amends a regulation des-
ignated as a ‘major rule’ within the meaning of 
section 804(2) of title 5, United States Code, it 
shall state, in its adopting release, the fol-
lowing: 
‘‘(i) The purposes and intended con-
sequences of the regulation. 
‘‘(ii) Appropriate post-implementation 
quantitative and qualitative metrics to 
measure the economic impact of the regu-
lation and to measure the extent to which 
the regulation has accomplished the stated 
purposes. 
‘‘(iii) The assessment plan that will be 
used, consistent with the requirements of 
subparagraph (B) and under the super-
vision of the Chief Economist of the Com-
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mission, to assess whether the regulation 
has achieved the stated purposes. 
‘‘(iv) Any unintended or negative con-
sequences that the Commission foresees 
may result from the regulation. 
‘‘(B) REQUIREMENTS
OF
ASSESSMENT 
PLAN AND REPORT.— 
‘‘(i) REQUIREMENTS OF PLAN.—The 
assessment plan required under this para-
graph shall consider the costs, benefits, 
and intended and unintended consequences 
of the regulation. The plan shall specify 
the data to be collected, the methods for 
collection and analysis of the data and a 
date for completion of the assessment. The 
assessment plan shall include an analysis 
of any jobs added or lost as a result of the 
regulation, differentiating between public 
and private sector jobs. 
‘‘(ii) SUBMISSION
AND
PUBLICATION 
OF REPORT.—The Chief Economist shall 
submit the completed assessment report to 
the Commission no later than 2 years after 
the publication of the adopting release, un-
less the Commission, at the request of the 
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