901 
† HR 4173 EAS 
ically important, the Council shall take into consider-
ation the following: 
(A) The aggregate monetary value of trans-
actions processed by the financial market utility 
or carried out through the payment, clearing, or 
settlement activity. 
(B) The aggregate exposure of the financial 
market utility or a financial institution engaged 
in payment, clearing, or settlement activities to 
its counterparties. 
(C) The relationship, interdependencies, or 
other interactions of the financial market utility 
or payment, clearing, or settlement activity with 
other financial market utilities or payment, 
clearing, or settlement activities. 
(D) The effect that the failure of or a dis-
ruption to the financial market utility or pay-
ment, clearing, or settlement activity would have 
on critical markets, financial institutions, or the 
broader financial system. 
(E) Any other factors that the Council 
deems appropriate. 
(b) RESCISSION OF DESIGNATION.— 
(1) IN GENERAL.—The Council, on a nondele-
gable basis and by a vote of not fewer than 2⁄3 of
902 
† HR 4173 EAS 
members then serving, including an affirmative vote 
by the Chairperson of the Council, shall rescind a des-
ignation of systemic importance for a designated fi-
nancial market utility or designated activity if the 
Council determines that the utility or activity no 
longer meets the standards for systemic importance. 
(2) EFFECT OF RESCISSION.—Upon rescission, 
the financial market utility or financial institutions 
conducting the activity will no longer be subject to the 
provisions of this title or any rules or orders pre-
scribed by the Council under this title. 
(c) CONSULTATION AND NOTICE AND OPPORTUNITY 
FOR HEARING.— 
(1) CONSULTATION.—Before making any deter-
mination under subsection (a) or (b), the Council 
shall consult with the relevant Supervisory Agency 
and the Board of Governors. 
(2) ADVANCE
NOTICE
AND
OPPORTUNITY
FOR 
HEARING.— 
(A) IN GENERAL.—Before making any de-
termination under subsection (a) or (b), the 
Council shall provide the financial market util-
ity or, in the case of a payment, clearing, or set-
tlement activity, financial institutions with ad-
903 
† HR 4173 EAS 
vance notice of the proposed determination of the 
Council. 
(B) NOTICE IN FEDERAL REGISTER.—The 
Council shall provide such advance notice to fi-
nancial institutions by publishing a notice in 
the Federal Register. 
(C) REQUESTS FOR HEARING.—Within 30 
days from the date of any notice of the proposed 
determination of the Council, the financial mar-
ket utility or, in the case of a payment, clearing, 
or settlement activity, a financial institution en-
gaged in the designated activity may request, in 
writing, an opportunity for a written or oral 
hearing before the Council to demonstrate that 
the proposed designation or rescission of designa-
tion is not supported by substantial evidence. 
(D) WRITTEN SUBMISSIONS.—Upon receipt 
of a timely request, the Council shall fix a time, 
not more than 30 days after receipt of the re-
quest, unless extended at the request of the finan-
cial market utility or financial institution, and 
place at which the financial market utility or fi-
nancial institution may appear, personally or 
through counsel, to submit written materials, or,
904 
† HR 4173 EAS 
at the sole discretion of the Council, oral testi-
mony or oral argument. 
(3) EMERGENCY EXCEPTION.— 
(A) WAIVER OR MODIFICATION BY VOTE OF 
THE COUNCIL.—The Council may waive or mod-
ify the requirements of paragraph (2) if the 
Council determines, by an affirmative vote of not 
less than 2⁄3 of all members then serving, includ-
ing an affirmative vote by the Chairperson of the 
Council, that the waiver or modification is nec-
essary to prevent or mitigate an immediate 
threat to the financial system posed by the finan-
cial market utility or the payment, clearing, or 
settlement activity. 
(B) NOTICE
OF
WAIVER
OR
MODIFICA-
TION.—The Council shall provide notice of the 
waiver or modification to the financial market 
utility concerned or, in the case of a payment, 
clearing, or settlement activity, to financial in-
stitutions, as soon as practicable, which shall be 
no later than 24 hours after the waiver or modi-
fication in the case of a financial market utility 
and 3 business days in the case of financial in-
stitutions. The Council shall provide the notice to 
financial institutions by posting a notice on the
905 
† HR 4173 EAS 
website of the Council and by publishing a notice 
in the Federal Register. 
(d) NOTIFICATION OF FINAL DETERMINATION.— 
(1) AFTER HEARING.—Within 60 days of any 
hearing under subsection (c)(3), the Council shall no-
tify the financial market utility or financial institu-
tions of the final determination of the Council in 
writing, which shall include findings of fact upon 
which the determination of the Council is based. 
(2) WHEN
NO
HEARING
REQUESTED.—If the 
Council does not receive a timely request for a hear-
ing under subsection (c)(3), the Council shall notify 
the financial market utility or financial institutions 
of the final determination of the Council in writing 
not later than 30 days after the expiration of the date 
by which a financial market utility or a financial in-
stitution could have requested a hearing. All notices 
to financial institutions under this subsection shall be 
published in the Federal Register. 
(e) EXTENSION OF TIME PERIODS.—The Council may 
extend the time periods established in subsections (c) and 
(d) as the Council determines to be necessary or appro-
priate.
906 
† HR 4173 EAS 
SEC. 805. STANDARDS FOR SYSTEMICALLY IMPORTANT FI-
NANCIAL MARKET UTILITIES AND PAYMENT, 
CLEARING, OR SETTLEMENT ACTIVITIES. 
(a) AUTHORITY TO PRESCRIBE STANDARDS.—The 
Board, by rule or order, and in consultation with the Coun-
cil and the Supervisory Agencies, shall prescribe risk man-
agement standards, taking into consideration relevant 
international standards and existing prudential require-
ments, governing— 
(1) the operations related to the payment, clear-
ing, and settlement activities of designated financial 
market utilities; and 
(2) the conduct of designated activities by finan-
cial institutions. 
(b) OBJECTIVES AND PRINCIPLES.—The objectives and 
principles for the risk management standards prescribed 
under subsection (a) shall be to— 
(1) promote robust risk management; 
(2) promote safety and soundness; 
(3) reduce systemic risks; and 
(4) support the stability of the broader financial 
system. 
(c) SCOPE.—The standards prescribed under sub-
section (a) may address areas such as— 
(1) risk management policies and procedures; 
(2) margin and collateral requirements;
907 
† HR 4173 EAS 
(3) participant or counterparty default policies 
and procedures; 
(4) the ability to complete timely clearing and 
settlement of financial transactions; 
(5) capital and financial resource requirements 
for designated financial market utilities; and 
(6) other areas that the Board determines are 
necessary to achieve the objectives and principles in 
subsection (b). 
(d) THRESHOLD LEVEL.—The standards prescribed 
under subsection (a) governing the conduct of designated 
activities by financial institutions shall, where appropriate, 
establish a threshold as to the level or significance of engage-
ment in the activity at which a financial institution will 
become subject to the standards with respect to that activity. 
(e) COMPLIANCE REQUIRED.—Designated financial 
market utilities and financial institutions subject to the 
standards prescribed by the Board of Governors for a des-
ignated activity shall conduct their operations in compli-
ance with the applicable risk management standards pre-
scribed by the Board of Governors. 
SEC. 806. OPERATIONS OF DESIGNATED FINANCIAL MAR-
KET UTILITIES. 
(a) FEDERAL RESERVE ACCOUNT AND SERVICES.— 
The Board of Governors may authorize a Federal Reserve
908 
† HR 4173 EAS 
Bank to establish and maintain an account for a designated 
financial market utility and provide services to the des-
ignated financial market utility that the Federal Reserve 
Bank is authorized under the Federal Reserve Act to pro-
vide to a depository institution, subject to any applicable 
rules, orders, standards, or guidelines prescribed by the 
Board of Governors. 
(b) ADVANCES.—The Board of Governors may author-
ize a Federal Reserve Bank to provide to a designated fi-
nancial market utility the same discount and borrowing 
privileges as the Federal Reserve Bank may provide to a 
depository institution under the Federal Reserve Act, sub-
ject to any applicable rules, orders, standards, or guidelines 
prescribed by the Board of Governors. 
(c) EARNINGS ON FEDERAL RESERVE BALANCES.—A 
Federal Reserve Bank may pay earnings on balances main-
tained by or on behalf of a designated financial market util-
ity in the same manner and to the same extent as the Fed-
eral Reserve Bank may pay earnings to a depository insti-
tution under the Federal Reserve Act, subject to any appli-
cable rules, orders, standards, or guidelines prescribed by 
the Board of Governors. 
(d) RESERVE REQUIREMENTS.—The Board of Gov-
ernors may exempt a designated financial market utility 
from, or modify any, reserve requirements under section 19
909 
† HR 4173 EAS 
of the Federal Reserve Act (12 U.S.C. 461) applicable to 
a designated financial market utility. 
(e) CHANGES TO RULES, PROCEDURES, OR OPER-
ATIONS.— 
(1) ADVANCE NOTICE.— 
(A) 
ADVANCE
NOTICE
OF
PROPOSED 
CHANGES
REQUIRED.—A designated financial 
market utility shall provide notice 60 days in 
advance advance notice to its Supervisory Agen-
cy and the Board of Governors of any proposed 
change to its rules, procedures, or operations that 
could, as defined in rules of the Board of Gov-
ernors, materially affect, the nature or level of 
risks presented by the designated financial mar-
ket utility. 
(B) TERMS AND STANDARDS PRESCRIBED 
BY THE BOARD OF GOVERNORS.—The Board of 
Governors shall prescribe regulations that define 
and describe the standards for determining when 
notice is required to be provided under subpara-
graph (A). 
(C) CONTENTS OF NOTICE.—The notice of a 
proposed change shall describe— 
(i) the nature of the change and ex-
pected effects on risks to the designated fi-
910 
† HR 4173 EAS 
nancial market utility, its participants, or 
the market; and 
(ii) how the designated financial mar-
ket utility plans to manage any identified 
risks. 
(D) ADDITIONAL
INFORMATION.—The Su-
pervisory Agency or the Board of Governors may 
require a designated financial market utility to 
provide any information necessary to assess the 
effect the proposed change would have on the na-
ture or level of risks associated with the des-
ignated financial market utility’s payment, 
clearing, or settlement activities and the suffi-
ciency of any proposed risk management tech-
niques. 
(E) NOTICE
OF
OBJECTION.—The Super-
visory Agency or the Board of Governors shall 
notify the designated financial market utility of 
any objection regarding the proposed change 
within 60 days from the later of— 
(i) the date that the notice of the pro-
posed change is received; or 
(ii) the date any further information 
requested for consideration of the notice is 
received.
911 
† HR 4173 EAS 
(F) CHANGE
NOT
ALLOWED
IF
OBJEC-
TION.—A designated financial market utility 
shall not implement a change to which the Board 
of Governors or the Supervisory Agency has an 
objection. 
(G) CHANGE
ALLOWED
IF
NO
OBJECTION 
WITHIN 60 DAYS.—A designated financial market 
utility may implement a change if it has not re-
ceived an objection to the proposed change within 
60 days of the later of— 
(i) the date that the Supervisory Agen-
cy or the Board of Governors receives the 
notice of proposed change; or 
(ii) the date the Supervisory Agency or 
the Board of Governors receives any further 
information it requests for consideration of 
the notice. 
(H) REVIEW
EXTENSION
FOR
NOVEL
OR 
COMPLEX ISSUES.—The Supervisory Agency or 
the Board of Governors may, during the 60-day 
review period, extend the review period for an 
additional 60 days for proposed changes that 
raise novel or complex issues, subject to the Su-
pervisory Agency or the Board of Governors pro-
viding the designated financial market utility
912 
† HR 4173 EAS 
with prompt written notice of the extension. Any 
extension under this subparagraph will extend 
the time periods under subparagraphs (D) and 
(F). 
(I) CHANGE
ALLOWED
EARLIER
IF
NOTI-
FIED OF NO OBJECTION.—A designated financial 
market utility may implement a change in less 
than 60 days from the date of receipt of the no-
tice of proposed change by the Supervisory Agen-
cy or the Board of Governors, or the date the Su-
pervisory Agency or the Board of Governors re-
ceives any further information it requested, if the 
Supervisory Agency or the Board of Governors 
notifies the designated financial market utility 
in writing that it does not object to the proposed 
change and authorizes the designated financial 
market utility to implement the change on an 
earlier date, subject to any conditions imposed 
by the Supervisory Agency or the Board of Gov-
ernors. 
(2) EMERGENCY CHANGES.— 
(A) IN GENERAL.—A designated financial 
market utility may implement a change that 
would otherwise require advance notice under 
this subsection if it determines that—
913 
† HR 4173 EAS 
(i) an emergency exists; and 
(ii) immediate implementation of the 
change is necessary for the designated fi-
nancial market utility to continue to pro-
vide its services in a safe and sound man-
ner. 
(B) NOTICE REQUIRED WITHIN 24 HOURS.— 
The designated financial market utility shall 
provide notice of any such emergency change to 
its Supervisory Agency and the Board of Gov-
ernors, as soon as practicable, which shall be no 
later than 24 hours after implementation of the 
change. 
(C) CONTENTS OF EMERGENCY NOTICE.—In 
addition to the information required for changes 
requiring advance notice, the notice of an emer-
gency change shall describe— 
(i) the nature of the emergency; and 
(ii) the reason the change was nec-
essary for the designated financial market 
utility to continue to provide its services in 
a safe and sound manner. 
(D) MODIFICATION
OR
RESCISSION
OF 
CHANGE MAY BE REQUIRED.—The Supervisory 
Agency or the Board of Governors may require
914 
† HR 4173 EAS 
modification or rescission of the change if it 
finds that the change is not consistent with the 
purposes of this Act or any rules, orders, or 
standards prescribed by the Board of Governors 
hereunder. 
(3) COPYING THE BOARD OF GOVERNORS.—The 
Supervisory Agency shall provide the Board of Gov-
ernors concurrently with a complete copy of any no-
tice, request, or other information it issues, submits, 
or receives under this subsection. 
(4) CONSULTATION
WITH
BOARD
OF
GOV-
ERNORS.—Before taking any action on, or completing 
its review of, a change proposed by a designated fi-
nancial market utility, the Supervisory Agency shall 
consult with the Board of Governors. 
SEC. 807. EXAMINATION OF AND ENFORCEMENT ACTIONS 
AGAINST DESIGNATED FINANCIAL MARKET 
UTILITIES. 
(a) EXAMINATION.—Notwithstanding any other provi-
sion of law and subject to subsection (d), the Supervisory 
Agency shall conduct examinations of a designated finan-
cial market utility at least once annually in order to deter-
mine the following: 
(1) The nature of the operations of, and the risks 
borne by, the designated financial market utility.
915 
† HR 4173 EAS 
(2) The financial and operational risks presented 
by the designated financial market utility to finan-
cial institutions, critical markets, or the broader fi-
nancial system. 
(3) The resources and capabilities of the des-
ignated financial market utility to monitor and con-
trol such risks. 
(4) The safety and soundness of the designated 
financial market utility. 
(5) The designated financial market utility’s 
compliance with— 
(A) this title; and 
(B) the rules and orders prescribed by the 
Board of Governors under this title. 
(b) SERVICE PROVIDERS.—Whenever a service integral 
to the operation of a designated financial market utility 
is performed for the designated financial market utility by 
another entity, whether an affiliate or non-affiliate and 
whether on or off the premises of the designated financial 
market utility, the Supervisory Agency may examine 
whether the provision of that service is in compliance with 
applicable law, rules, orders, and standards to the same ex-
tent as if the designated financial market utility were per-
forming the service on its own premises.
916 
† HR 4173 EAS 
(c) ENFORCEMENT.—For purposes of enforcing the 
provisions of this section, a designated financial market 
utility shall be subject to, and the appropriate Supervisory 
Agency shall have authority under the provisions of sub-
sections (b) through (n) of section 8 of the Federal Deposit 
Insurance Act (12 U.S.C. 1818) in the same manner and 
to the same extent as if the designated financial market util-
ity was an insured depository institution and the Super-
visory Agency was the appropriate Federal banking agency 
for such insured depository institution. 
(d) BOARD OF GOVERNORS INVOLVEMENT IN EXAMI-
NATIONS.— 
(1) BOARD
OF
GOVERNORS
CONSULTATION
ON 
EXAMINATION
PLANNING.—The Supervisory Agency 
shall consult with the Board of Governors regarding 
the scope and methodology of any examination con-
ducted under subsections (a) and (b). 
(2) BOARD OF GOVERNORS PARTICIPATION IN EX-
AMINATION.—The Board of Governors may, in its dis-
cretion, participate in any examination led by a Su-
pervisory Agency and conducted under subsections (a) 
and (b). 
(e) BOARD
OF
GOVERNORS
ENFORCEMENT
REC-
OMMENDATIONS.—
917 
† HR 4173 EAS 
(1) RECOMMENDATION.—The Board of Governors 
may at any time recommend to the Supervisory 
Agency that such agency take enforcement action 
against a designated financial market utility. Any 
such recommendation for enforcement action shall 
provide a detailed analysis supporting the rec-
ommendation of the Board of Governors. 
(2) CONSIDERATION.—The Supervisory Agency 
shall consider the recommendation of the Board of 
Governors and submit a response to the Board of Gov-
ernors within 60 days. 
(3) MEDIATION.—If the Supervisory Agency re-
jects, in whole or in part, the recommendation of the 
Board of Governors, the Board of Governors may dis-
pute the matter by referring the recommendation to 
the Council, which shall attempt to resolve the dis-
pute. 
(4) ENFORCEMENT ACTION.—If the Council is 
unable to resolve the dispute under paragraph (3) 
within 30 days from the date of referral, the Board 
of Governors may, upon a vote of its members— 
(A) exercise the enforcement authority ref-
erenced in subsection (c) as if it were the Super-
visory Agency; and
918 
† HR 4173 EAS 
(B) take enforcement action against the des-
ignated financial market utility. 
(f) EMERGENCY ENFORCEMENT ACTIONS
BY
THE 
BOARD OF GOVERNORS.— 
(1) IMMINENT RISK OF SUBSTANTIAL HARM.— 
The Board of Governors may, after consulting with 
the Council and the Supervisory Agency, take enforce-
ment action against a designated financial market 
utility if the Board of Governors has reasonable cause 
to believe that— 
(A) either— 
(i) an action engaged in, or con-
templated by, a designated financial market 
utility (including any change proposed by 
the designated financial market utility to 
its rules, procedures, or operations that 
would otherwise be subject to section 806(e)) 
poses an imminent risk of substantial harm 
to financial institutions, critical markets, 
or the broader financial system; or 
(ii) the condition of a designated fi-
nancial market utility poses an imminent 
risk of substantial harm to financial insti-
tutions, critical markets, or the broader fi-
nancial system; and
921 
† HR 4173 EAS 
(b) ENFORCEMENT.—For purposes of enforcing the 
provisions of this section, and the rules and orders pre-
scribed by the Board of Governors under this section, a fi-
nancial institution subject to the standards prescribed by 
the Board of Governors for a designated activity shall be 
subject to, and the appropriate financial regulator shall 
have authority under the provisions of subsections (b) 
through (n) of section 8 of the Federal Deposit Insurance 
Act (12 U.S.C. 1818) in the same manner and to the same 
extent as if the financial institution was an insured deposi-
tory institution and the appropriate financial regulator 
was the appropriate Federal banking agency for such in-
sured depository institution. 
(c) TECHNICAL ASSISTANCE.—The Board of Governors 
shall consult with and provide such technical assistance as 
may be required by the appropriate financial regulators to 
ensure that the rules and orders prescribed by the Board 
of Governors under this title are interpreted and applied 
in as consistent and uniform a manner as practicable. 
(d) DELEGATION.— 
(1) EXAMINATION.— 
(A) REQUEST TO BOARD OF GOVERNORS.— 
The appropriate financial regulator may request 
the Board of Governors to conduct or participate 
in an examination of a financial institution
922 
† HR 4173 EAS 
subject to the standards prescribed by the Board 
of Governors for a designated activity in order 
to assess the compliance of such financial insti-
tution with— 
(i) this title; or 
(ii) the rules or orders prescribed by 
the Board of Governors under this title. 
(B) EXAMINATION
BY
BOARD
OF
GOV-
ERNORS.—Upon receipt of an appropriate writ-
ten request, the Board of Governors will conduct 
the examination under such terms and condi-
tions to which the Board of Governors and the 
appropriate financial regulator mutually agree. 
(2) ENFORCEMENT.— 
(A) REQUEST TO BOARD OF GOVERNORS.— 
The appropriate financial regulator may request 
the Board of Governors to enforce this title or the 
rules or orders prescribed by the Board of Gov-
ernors under this title against a financial insti-
tution that is subject to the standards prescribed 
by the Board of Governors for a designated activ-
ity. 
(B) ENFORCEMENT
BY
BOARD
OF
GOV-
ERNORS.—Upon receipt of an appropriate writ-
ten request, the Board of Governors shall deter-
923 
† HR 4173 EAS 
mine whether an enforcement action is war-
ranted, and, if so, it shall enforce compliance 
with this title or the rules or orders prescribed 
by the Board of Governors under this title and, 
if so, the financial institution shall be subject to, 
and the Board of Governors shall have authority 
under the provisions of subsections (b) through 
(n) of section 8 of the Federal Deposit Insurance 
Act (12 U.S.C. 1818) in the same manner and 
to the same extent as if the financial institution 
was an insured depository institution and the 
Board of Governors was the appropriate Federal 
banking agency for such insured depository in-
stitution. 
(e) BACK-UP AUTHORITY OF THE BOARD OF GOV-
ERNORS.— 
(1) EXAMINATION AND ENFORCEMENT.—Notwith-
standing any other provision of law, the Board of 
Governors may— 
(A) conduct an examination of the type de-
scribed in subsection (a) of any financial insti-
tution that is subject to the standards prescribed 
by the Board of Governors for a designated activ-
ity; and
924 
† HR 4173 EAS 
(B) enforce the provisions of this title or 
any rules or orders prescribed by the Board of 
Governors under this title against any financial 
institution that is subject to the standards pre-
scribed by the Board of Governors for a des-
ignated activity. 
(2) LIMITATIONS.— 
(A) EXAMINATION.—The Board of Gov-
ernors may exercise the authority described in 
paragraph (1)(A) only if the Board of Governors 
has— 
(i) reasonable cause to believe that a fi-
nancial institution is not in compliance 
with this title or the rules or orders pre-
scribed by the Board of Governors under 
this title with respect to a designated activ-
ity; 
(ii) notified, in writing, the appro-
priate financial regulator and the Council 
of its belief under clause (i) with supporting 
documentation included; 
(iii) requested the appropriate finan-
cial regulator to conduct a prompt exam-
ination of the financial institution; and 
(iv) either—
925 
† HR 4173 EAS 
(I) not been afforded a reasonable 
opportunity to participate in an exam-
ination of the financial institution by 
the appropriate financial regulator 
within 30 days after the date of the 
Board’s notification under clause (ii); 
or 
(II) reasonable cause to believe 
that the financial institution’s non-
compliance with this title or the rules 
or orders prescribed by the Board of 
Governors under this title poses a sub-
stantial risk to other financial institu-
tions, critical markets, or the broader 
financial system, subject to the Board 
of Governors affording the appropriate 
financial regulator a reasonable oppor-
tunity to participate in the examina-
tion. 
(B) ENFORCEMENT.—The Board of Gov-
ernors may exercise the authority described in 
paragraph (1)(B) only if the Board of Governors 
has— 
(i) reasonable cause to believe that a fi-
nancial institution is not in compliance
926 
† HR 4173 EAS 
with this title or the rules or orders pre-
scribed by the Board of Governors under 
this title with respect to a designated activ-
ity; 
(ii) notified, in writing, the appro-
priate financial regulator and the Council 
of its belief under clause (i) with supporting 
documentation included and with a rec-
ommendation that the appropriate financial 
regulator take 1 or more specific enforce-
ment actions against the financial institu-
tion; and 
(iii) either— 
(I) not been notified, in writing, 
by the appropriate financial regulator 
of the commencement of an enforcement 
action recommended by the Board of 
Governors against the financial insti-
tution within 60 days from the date of 
the notification under clause (ii); or 
(II) reasonable cause to believe 
that the financial institution’s non-
compliance with this title or the rules 
or orders prescribed by the Board of 
Governors under this title poses a sub-
927 
† HR 4173 EAS 
stantial risk to other financial institu-
tions, critical markets, or the broader 
financial system, subject to the Board 
of Governors notifying the appropriate 
financial regulator of the Board’s en-
forcement action. 
(3) ENFORCEMENT
PROVISIONS.—For purposes 
of taking enforcement action under paragraph (1), the 
financial institution shall be subject to, and the 
Board of Governors shall have authority under the 
provisions of subsections (b) through (n) of section 8 
of the Federal Deposit Insurance Act (12 U.S.C. 
1818) in the same manner and to the same extent as 
if the financial institution was an insured depository 
institution and the Board of Governors was the ap-
propriate Federal banking agency for such insured 
depository institution. 
SEC. 809. REQUESTS FOR INFORMATION, REPORTS, OR 
RECORDS. 
(a) INFORMATION
TO
ASSESS
SYSTEMIC
IMPOR-
TANCE.— 
(1) FINANCIAL MARKET UTILITIES.—The Council 
is authorized to require any financial market utility 
to submit such information as the Council may re-
quire for the sole purpose of assessing whether that fi-
928 
† HR 4173 EAS 
nancial market utility is systemically important, but 
only if the Council has reasonable cause to believe 
that the financial market utility meets the standards 
for systemic importance set forth in section 804. 
(2) FINANCIAL INSTITUTIONS ENGAGED IN PAY-
MENT, CLEARING, OR SETTLEMENT ACTIVITIES.—The 
Council is authorized to require any financial insti-
tution to submit such information as the Council may 
require for the sole purpose of assessing whether any 
payment, clearing, or settlement activity engaged in 
or supported by a financial institution is system-
ically important, but only if the Council has reason-
able cause to believe that the activity meets the stand-
ards for systemic importance set forth in section 804. 
(b) REPORTING AFTER DESIGNATION.— 
(1) DESIGNATED
FINANCIAL
MARKET
UTILI-
TIES.—The Board of Governors and the Council may 
require a designated financial market utility to sub-
mit reports or data to the Board of Governors and the 
Council in such frequency and form as deemed nec-
essary by the Board of Governors and the Council in 
order to assess the safety and soundness of the utility 
and the systemic risk that the utility’s operations pose 
to the financial system.
929 
† HR 4173 EAS 
(2) 
FINANCIAL
INSTITUTIONS
SUBJECT
TO 
STANDARDS
FOR
DESIGNATED
ACTIVITIES.—The 
Board of Governors and the Council may require 1 or 
more financial institutions subject to the standards 
prescribed by the Board of Governors for a designated 
activity to submit, in such frequency and form as 
deemed necessary by the Board of Governors and the 
Council, reports and data to the Board of Governors 
and the Council solely with respect to the conduct of 
the designated activity and solely to assess whether— 
(A) the rules, orders, or standards pre-
scribed by the Board of Governors with respect 
to the designated activity appropriately address 
the risks to the financial system presented by 
such activity; and 
(B) the financial institutions are in compli-
ance with this title and the rules and orders pre-
scribed by the Board of Governors under this 
title with respect to the designated activity. 
(c) COORDINATION WITH APPROPRIATE FEDERAL SU-
PERVISORY AGENCY.— 
(1) ADVANCE
COORDINATION.—Before directly 
requesting any material information from, or impos-
ing reporting or recordkeeping requirements on, any 
financial market utility or any financial institution
930 
† HR 4173 EAS 
engaged in a payment, clearing, or settlement activ-
ity, the Board of Governors and the Council shall co-
ordinate with the Supervisory Agency for a financial 
market utility or the appropriate financial regulator 
for a financial institution to determine if the infor-
mation is available from or may be obtained by the 
agency in the form, format, or detail required by the 
Board of Governors and the Council. 
(2) SUPERVISORY
REPORTS.—Notwithstanding 
any other provision of law, the Supervisory Agency, 
the appropriate financial regulator, and the Board of 
Governors are authorized to disclose to each other and 
the Council copies of its examination reports or simi-
lar reports regarding any financial market utility or 
any financial institution engaged in payment, clear-
ing, or settlement activities. 
(d) TIMING OF RESPONSE FROM APPROPRIATE FED-
ERAL SUPERVISORY AGENCY.—If the information, report, 
records, or data requested by the Board of Governors or the 
Council under subsection (c)(1) are not provided in full by 
the Supervisory Agency or the appropriate financial regu-
lator in less than 15 days after the date on which the mate-
rial is requested, the Board of Governors or the Council may 
request the information or impose recordkeeping or report-
931 
† HR 4173 EAS 
ing requirements directly on such persons as provided in 
subsections (a) and (b) with notice to the agency. 
(e) SHARING OF INFORMATION.— 
(1) MATERIAL CONCERNS.—Notwithstanding any 
other provision of law, the Board of Governors, the 
Council, the appropriate financial regulator, and any 
Supervisory Agency are authorized to— 
(A) promptly notify each other of material 
concerns about a designated financial market 
utility or any financial institution engaged in 
designated activities; and 
(B) share appropriate reports, information, 
or data relating to such concerns. 
(2) OTHER INFORMATION.—Notwithstanding any 
other provision of law, the Board of Governors, the 
Council, the appropriate financial regulator, or any 
Supervisory Agency may, under such terms and con-
ditions as it deems appropriate, provide confidential 
supervisory information and other information ob-
tained under this title to other persons it deems ap-
propriate, including the Secretary, State financial in-
stitution supervisory agencies, foreign financial su-
pervisors, foreign central banks, and foreign finance 
ministries, subject to reasonable assurances of con-
fidentiality.
932 
† HR 4173 EAS 
(f) PRIVILEGE MAINTAINED.—The Board of Governors, 
the Council, the appropriate financial regulator, and any 
Supervisory Agency providing reports or data under this 
section shall not be deemed to have waived any privilege 
applicable to those reports or data, or any portion thereof, 
by providing the reports or data to the other party or by 
permitting the reports or data, or any copies thereof, to be 
used by the other party. 
(g) DISCLOSURE EXEMPTION.—Information obtained 
by the Board of Governors or the Council under this section 
and any materials prepared by the Board of Governors or 
the Council regarding its assessment of the systemic impor-
tance of financial market utilities or any payment, clear-
ing, or settlement activities engaged in by financial institu-
tions, and in connection with its supervision of designated 
financial market utilities and designated activities, shall be 
confidential supervisory information exempt from disclo-
sure under section 552 of title 5, United States Code. For 
purposes of such section 552, this subsection shall be consid-
ered a statute described in subsection (b)(3) of such section 
552. 
SEC. 810. RULEMAKING. 
The Board of Governors and the Council are author-
ized to prescribe such rules and issue such orders as may 
be necessary to administer and carry out the authorities
933 
† HR 4173 EAS 
and duties granted to the Board of Governors or the Coun-
cil, respectively, and prevent evasions thereof. 
SEC. 811. OTHER AUTHORITY. 
Unless otherwise provided by its terms, this title does 
not divest any appropriate financial regulator, any Super-
visory Agency, or any other Federal or State agency, of any 
authority derived from any other applicable law, except 
that any standards prescribed by the Board of Governors 
under section 805 shall supersede any less stringent require-
ments established under other authority to the extent of any 
conflict. 
SEC. 812. EFFECTIVE DATE. 
This title is effective as of the date of enactment of this 
Act. 
TITLE 
IX—INVESTOR 
PROTEC-
TIONS AND IMPROVEMENTS 
TO THE REGULATION OF SE-
CURITIES 
Subtitle A—Increasing Investor 
Protection 
SEC. 911. INVESTOR ADVISORY COMMITTEE ESTABLISHED. 
Title I of the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.) is amended by adding at the end the 
following:
934 
† HR 4173 EAS 
‘‘SEC. 39. INVESTOR ADVISORY COMMITTEE. 
‘‘(a) ESTABLISHMENT AND PURPOSE.— 
‘‘(1) 
ESTABLISHMENT.—There 
is 
established 
within the Commission the Investor Advisory Com-
mittee (referred to in this section as the ‘Committee’). 
‘‘(2) PURPOSE.—The Committee shall— 
‘‘(A) advise and consult with the Commis-
sion on— 
‘‘(i) regulatory priorities of the Com-
mission; 
‘‘(ii) issues relating to the regulation of 
securities products, trading strategies, and 
fee structures, and the effectiveness of disclo-
sure; 
‘‘(iii) initiatives to protect investor in-
terest; and 
‘‘(iv) initiatives to promote investor 
confidence and the integrity of the securities 
marketplace; and 
‘‘(B) submit to the Commission such find-
ings and recommendations as the Committee de-
termines 
are 
appropriate, 
including 
rec-
ommendations for proposed legislative changes. 
‘‘(b) MEMBERSHIP.— 
‘‘(1) IN GENERAL.—The members of the Com-
mittee shall be—
935 
† HR 4173 EAS 
‘‘(A) the Investor Advocate; 
‘‘(B) a representative of State securities 
commissions; 
‘‘(C) a representative of the interests of sen-
ior citizens; and 
‘‘(D) not fewer than 10, and not more than 
20, members appointed by the Commission, from 
among individuals who— 
‘‘(i) represent the interests of indi-
vidual equity and debt investors, including 
investors in mutual funds; 
‘‘(ii) represent the interests of institu-
tional investors, including the interests of 
pension funds and registered investment 
companies; 
‘‘(iii) are knowledgeable about invest-
ment issues and decisions; and 
‘‘(iv) have reputations of integrity. 
‘‘(2) TERM.—Each member of the Committee ap-
pointed under paragraph (1)(B) shall serve for a term 
of 4 years. 
‘‘(3) MEMBERS NOT COMMISSION EMPLOYEES.— 
Members appointed under paragraph (1)(B) shall not 
be deemed to be employees or agents of the Commis-
sion solely because of membership on the Committee.
936 
† HR 4173 EAS 
‘‘(c) CHAIRMAN; VICE CHAIRMAN; SECRETARY; AS-
SISTANT SECRETARY.— 
‘‘(1) IN GENERAL.—The members of the Com-
mittee shall elect, from among the members of the 
Committee— 
‘‘(A) a chairman, who may not be employed 
by an issuer; 
‘‘(B) a vice chairman, who may not be em-
ployed by an issuer; 
‘‘(C) a secretary; and 
‘‘(D) an assistant secretary. 
‘‘(2) TERM.—Each member elected under para-
graph (1) shall serve for a term of 3 years in the ca-
pacity for which the member was elected under para-
graph (1). 
‘‘(d) MEETINGS.— 
‘‘(1) FREQUENCY OF MEETINGS.—The Committee 
shall meet— 
‘‘(A) not less frequently than twice annu-
ally, at the call of the chairman of the Com-
mittee; and 
‘‘(B) from time to time, at the call of the 
Commission. 
‘‘(2) NOTICE.—The chairman of the Committee 
shall give the members of the Committee written no-
937 
† HR 4173 EAS 
tice of each meeting, not later than 2 weeks before the 
date of the meeting. 
‘‘(e) COMPENSATION AND TRAVEL EXPENSES.—Each 
member of the Committee who is not a full-time employee 
of the United States shall— 
‘‘(1) be compensated at a rate not to exceed the 
daily equivalent of the annual rate of basic pay in 
effect for a position at level V of the Executive Sched-
ule under section 5316 of title 5, United States Code, 
for each day during which the member is engaged in 
the actual performance of the duties of the Committee; 
and 
‘‘(2) while away from the home or regular place 
of business of the member in the performance of serv-
ices for the Committee, be allowed travel expenses, in-
cluding per diem in lieu of subsistence, in the same 
manner as persons employed intermittently in the 
Government service are allowed expenses under sec-
tion 5703(b) of title 5, United States Code. 
‘‘(f) STAFF.—The Commission shall make available to 
the Committee such staff as the chairman of the Committee 
determines are necessary to carry out this section. 
‘‘(g) REVIEW
BY
COMMISSION.—The Commission 
shall—
938 
† HR 4173 EAS 
‘‘(1) review the findings and recommendations of 
the Committee; and 
‘‘(2) each time the Committee submits a finding 
or recommendation to the Commission, issue a public 
statement— 
‘‘(A) assessing the finding or recommenda-
tion of the Committee; and 
‘‘(B) disclosing the action, if any, the Com-
mission intends to take with respect to the find-
ing or recommendation. 
‘‘(h) COMMITTEE FINDINGS.—Nothing in this section 
shall require the Commission to agree to or act upon any 
finding or recommendation of the Committee. 
‘‘(i) FEDERAL ADVISORY COMMITTEE ACT.—The Fed-
eral Advisory Committee Act (5 U.S.C. App.) shall not 
apply with respect to the Committee and its activities. 
‘‘(j) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to the Commission such sums 
as are necessary to carry out this section.’’. 
SEC. 912. CLARIFICATION OF AUTHORITY OF THE COMMIS-
SION TO ENGAGE IN INVESTOR TESTING. 
Section 19 of the Securities Act of 1933 (15 U.S.C. 
77s) is amended by adding at the end the following: 
‘‘(e) EVALUATION OF RULES OR PROGRAMS.—For the 
purpose of evaluating any rule or program of the Commis-
939 
† HR 4173 EAS 
sion issued or carried out under any provision of the securi-
ties laws, as defined in section 3 of the Securities Exchange 
Act of 1934 (15 U.S.C. 78c), and the purposes of consid-
ering, proposing, adopting, or engaging in any such rule 
or program or developing new rules or programs, the Com-
mission may— 
‘‘(1) gather information from and communicate 
with investors or other members of the public; 
‘‘(2) engage in such temporary investor testing 
programs as the Commission determines are in the 
public interest or would protect investors; and 
‘‘(3) consult with academics and consultants, as 
necessary to carry out this subsection. 
‘‘(f) RULE OF CONSTRUCTION.—For purposes of the 
Paperwork Reduction Act (44 U.S.C. 3501 et seq.), any ac-
tion taken under subsection (e) shall not be construed to 
be a collection of information.’’. 
SEC. 913. STUDY AND RULEMAKING REGARDING OBLIGA-
TIONS OF BROKERS, DEALERS, AND INVEST-
MENT ADVISERS. 
(a) DEFINITIONS.—In this section— 
(1) the term ‘‘FINRA’’ means the Financial In-
dustry Regulatory Authority; and 
(2) the term ‘‘retail customer’’ means an indi-
vidual customer of a broker, dealer, investment ad-
940 
† HR 4173 EAS 
viser, person associated with a broker or dealer, or a 
person associated with an investment adviser. 
(b) IN GENERAL.—The Commission shall conduct a 
study to evaluate— 
(1) the effectiveness of existing legal or regulatory 
standards of care for brokers, dealers, investment ad-
visers, persons associated with brokers or dealers, and 
persons associated with investment advisers for pro-
viding personalized investment advice and rec-
ommendations about securities to retail customers im-
posed by the Commission and FINRA, and other Fed-
eral and State legal or regulatory standards; and 
(2) whether there are legal or regulatory gaps or 
overlap in legal or regulatory standards in the protec-
tion of retail customers relating to the standards of 
care for brokers, dealers, investment advisers, persons 
associated with brokers or dealers, and persons associ-
ated with investment advisers for providing personal-
ized investment advice about securities to retail cus-
tomers that should be addressed by rule or statute. 
(c) CONSIDERATIONS.—In conducting the study re-
quired under subsection (b), the Commission shall con-
sider— 
(1) the regulatory, examination, and enforcement 
resources devoted to, and activities of, the Commission
941 
† HR 4173 EAS 
and FINRA to enforce the standards of care for bro-
kers, dealers, investment advisers, persons associated 
with brokers or dealers, and persons associated with 
investment advisers when providing personalized in-
vestment advice and recommendations about securi-
ties to retail customers, including— 
(A) the frequency of examinations of bro-
kers, dealers, and investment advisers; and 
(B) the length of time of the examinations; 
(2) the substantive differences, compared and 
contrasted in detail, in the regulation of brokers, deal-
ers, and investment advisers, when providing person-
alized investment advice and recommendations about 
securities to retail customers, including the differences 
in the amount of resources devoted to the regulation 
and examination of brokers, dealers, and investment 
advisers, by the Commission and FINRA; 
(3) the specific instances in which— 
(A) the regulation and oversight of invest-
ment advisers provide greater protection to retail 
customers than the regulation and oversight of 
brokers and dealers; and 
(B) the regulation and oversight of brokers 
and dealers provide greater protection to retail
942 
† HR 4173 EAS 
customers than the regulation and oversight of 
investment advisers; 
(4) the existing legal or regulatory standards of 
State securities regulators and other regulators in-
tended to protect retail customers; 
(5) the potential impact on retail customers, in-
cluding the potential impact on access of retail cus-
tomers to the range of products and services offered by 
brokers and dealers, of imposing upon brokers, deal-
ers, and persons associated with brokers or dealers— 
(A) the standard of care applied under the 
Investment Advisers Act of 1940 (15 U.S.C. 80b– 
1 et seq.) for providing personalized investment 
advice about securities to retail customers of in-
vestment advisers; and 
(B) other requirements of the Investment 
Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.); 
(6) the potential impact of— 
(A) imposing on investment advisers the 
standard of care applied by the Commission and 
FINRA under the Securities Exchange Act of 
1934 (15 U.S.C. 78a et seq.) for providing rec-
ommendations about securities to retail cus-
tomers of brokers and dealers and other Commis-
943 
† HR 4173 EAS 
sion and FINRA requirements applicable to bro-
kers and dealers; and 
(B) authorizing the Commission to des-
ignate 1 or more self-regulatory organizations to 
augment the efforts of the Commission to oversee 
investment advisers; 
(7) the potential impact of eliminating the 
broker and dealer exclusion from the definition of ‘‘in-
vestment adviser’’ under section 202(a)(11)(C) of the 
Investment Advisers Act of 1940 (15 U.S.C. 80b– 
2(a)(11)(C)), in terms of— 
(A) the potential benefits or harm to retail 
customers that could result from such a change, 
including any potential impact on access to per-
sonalized investment advice and recommenda-
tions about securities to retail customers or the 
availability of such advice and recommenda-
tions; 
(B) the number of additional entities and 
individuals that would be required to register 
under, or become subject to, the Investment Ad-
visers Act of 1940 (15 U.S.C. 80b–1 et seq.), and 
the additional requirements to which brokers, 
dealers, and persons associated with brokers and 
dealers would become subject, including—
944 
† HR 4173 EAS 
(i) any potential additional associated 
person licensing, registration, and examina-
tion requirements; and 
(ii) the additional costs, if any, to the 
additional entities and individuals; and 
(C) the impact on Commission resources 
to— 
(i) conduct examinations of registered 
investment advisers and the representatives 
of registered investment advisers, including 
the impact on the examination cycle; and 
(ii) enforce the standard of care and 
other 
applicable 
requirements 
imposed 
under the Investment Advisers Act of 1940 
(15 U.S.C. 80b–1 et seq.); 
(8) the ability of investors to understand the dif-
ferences in terms of regulatory oversight and exami-
nations between brokers, dealers, and investment ad-
visers; 
(9) the varying level of services provided by bro-
kers, dealers, investment advisers, persons associated 
with brokers or dealers, and persons associated with 
investment advisers to retail customers and the vary-
ing scope and terms of retail customer relationships 
of brokers, dealers, investment advisers, persons asso-
945 
† HR 4173 EAS 
ciated with brokers or dealers, and persons associated 
with investment advisers with such retail customers; 
(10) any potential benefits or harm to retail cus-
tomers that could result from any potential changes 
in the regulatory requirements or legal standards af-
fecting brokers, dealers, investment advisers, persons 
associated with brokers or dealers, and persons associ-
ated with investment advisers relating to their obliga-
tions to retail customers, including any potential im-
pact on— 
(A) protection from fraud; 
(B) access to personalized investment ad-
vice, and recommendations about securities to re-
tail customers; or 
(C) the availability of such advice and rec-
ommendations; 
(11) the additional costs and expenses to retail 
customers and to brokers, dealers, and investment ad-
visers resulting from potential changes in the regu-
latory requirements or legal standards affecting bro-
kers, dealers, investment advisers, persons associated 
with brokers or dealers, and persons associated with 
investment advisers relating to their obligations to re-
tail customers; and
946 
† HR 4173 EAS 
(12) any other consideration that the Commis-
sion deems necessary and appropriate to effectively 
execute the study required under subsection (b). 
(d) REPORT.— 
(1) IN GENERAL.—Not later than 1 year after 
the date of enactment of this Act, the Commission 
shall submit a report on the study required under 
subsection (b) to— 
(A) the Committee on Banking, Housing, 
and Urban Affairs of the Senate; and 
(B) the Committee on Financial Services of 
the House of Representatives. 
(2) CONTENT
REQUIREMENTS.—The report re-
quired under paragraph (1) shall describe the find-
ings, conclusions, and recommendations of the Com-
mission from the study required under subsection (b), 
including— 
(A) a description of the considerations, 
analysis, and public and industry input that the 
Commission considered, as required under sub-
section (e), to make such findings, conclusions, 
and policy recommendations; and 
(B) an analysis of— 
(i) whether any identified legal or reg-
ulatory gaps or overlap in legal or regu-
947 
† HR 4173 EAS 
latory standards in the protection of retail 
customers relating to the standards of care 
for brokers, dealers, investment advisers, 
persons associated with brokers or dealers, 
and persons associated with investment ad-
visers for providing personalized investment 
advice about securities to retail customers 
can be addressed by rule; and 
(ii) whether, and the extent to which, 
the Commission would require additional 
statutory authority to address such gaps or 
overlap. 
(e) PUBLIC COMMENT.—The Commission shall seek 
and consider public input, comments, and data in order 
to prepare the report required under subsection (d). 
(f) RULEMAKING.— 
(1) IN GENERAL.—If the study required under 
subsection (b) identifies any gaps or overlap in the 
legal or regulatory standards in the protection of re-
tail customers relating to the standards of care for 
brokers, dealers, investment advisers, persons associ-
ated with brokers or dealers, and persons associated 
with investment advisers for providing personalized 
investment advice about securities to such retail cus-
948 
† HR 4173 EAS 
tomers, the Commission, not later than 2 years after 
the date of enactment of this Act, shall— 
(A) commence a rulemaking, as necessary 
or appropriate in the public interest and for the 
protection of retail customers, to address such 
regulatory gaps and overlap that can be ad-
dressed by rule, using its authority under the Se-
curities Exchange Act of 1934 (15 U.S.C. 78a et 
seq.) and the Investment Advisers Act of 1940 
(15 U.S.C. 80b–1 et seq.); and 
(B) consider and take into account the find-
ings, conclusions, and recommendations of the 
study required under this section. 
(2) RULE OF CONSTRUCTION.—Nothing in this 
section shall be construed to limit the rulemaking au-
thority of the Commission under any other provision 
of Federal law. 
SEC. 914. OFFICE OF THE INVESTOR ADVOCATE. 
Section 4 of the Securities Exchange Act of 1934 (15 
U.S.C. 78d) is amended by adding at the end the following: 
‘‘(g) OFFICE OF THE INVESTOR ADVOCATE.— 
‘‘(1) OFFICE ESTABLISHED.—There is established 
within the Commission the Office of the Investor Ad-
vocate (in this subsection referred to as the ‘Office’). 
‘‘(2) INVESTOR ADVOCATE.—
949 
† HR 4173 EAS 
‘‘(A) IN GENERAL.—The head of the Office 
shall be the Investor Advocate, who shall— 
‘‘(i) report directly to the Chairman; 
and 
‘‘(ii) be appointed by the Chairman, in 
consultation with the Commission, from 
among individuals having experience in ad-
vocating for the interests of investors in se-
curities and investor protection issues, from 
the perspective of investors. 
‘‘(B) COMPENSATION.—The annual rate of 
pay for the Investor Advocate shall be equal to 
the highest rate of annual pay for a Senior Exec-
utive Service position within the Commission. 
‘‘(C) LIMITATION
ON
SERVICE.—An indi-
vidual who serves as the Investor Advocate may 
not be employed by the Commission— 
‘‘(i) during the 2-year period ending 
on the date of appointment as Investor Ad-
vocate; or 
‘‘(ii) during the 5-year period begin-
ning on the date on which the person ceases 
to serve as the Investor Advocate. 
‘‘(3) STAFF OF OFFICE.—The Investor Advocate 
may retain or employ independent counsel, research
950 
† HR 4173 EAS 
staff, and service staff, as the Investor Advocate deems 
necessary to carry out the functions, powers, and du-
ties of the Office. 
‘‘(4) FUNCTIONS OF THE INVESTOR ADVOCATE.— 
The Investor Advocate shall— 
‘‘(A) assist retail investors in resolving sig-
nificant problems such investors may have with 
the Commission or with self-regulatory organiza-
tions; 
‘‘(B) identify areas in which investors 
would benefit from changes in the regulations of 
the Commission or the rules of self-regulatory or-
ganizations; 
‘‘(C) identify problems that investors have 
with financial service providers and investment 
products; 
‘‘(D) analyze the potential impact on inves-
tors of— 
‘‘(i) proposed regulations of the Com-
mission; and 
‘‘(ii) proposed rules of self-regulatory 
organizations registered under this title; 
and 
‘‘(E) to the extent practicable, propose to the 
Commission changes in the regulations or orders
951 
† HR 4173 EAS 
of the Commission and to Congress any legisla-
tive, administrative, or personnel changes that 
may be appropriate to mitigate problems identi-
fied under this paragraph and to promote the in-
terests of investors. 
‘‘(5) ACCESS TO DOCUMENTS.—The Commission 
shall ensure that the Investor Advocate has full access 
to the documents of the Commission and any self-reg-
ulatory organization, as necessary to carry out the 
functions of the Office. 
‘‘(6) ANNUAL REPORTS.— 
‘‘(A) REPORT ON OBJECTIVES.— 
‘‘(i) IN
GENERAL.—Not later than 
June 30 of each year after 2010, the Inves-
tor Advocate shall submit to the Committee 
on Banking, Housing, and Urban Affairs of 
the Senate and the Committee on Financial 
Services of the House of Representatives a 
report on the objectives of the Investor Advo-
cate for the following fiscal year. 
‘‘(ii) 
CONTENTS.—Each 
report 
re-
quired under clause (i) shall contain full 
and substantive analysis and explanation. 
‘‘(B) REPORT ON ACTIVITIES.—
952 
† HR 4173 EAS 
‘‘(i) IN GENERAL.—Not later than De-
cember 31 of each year after 2010, the In-
vestor Advocate shall submit to the Com-
mittee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on 
Financial Services of the House of Rep-
resentatives a report on the activities of the 
Investor Advocate during the immediately 
preceding fiscal year. 
‘‘(ii) 
CONTENTS.—Each 
report 
re-
quired under clause (i) shall include— 
‘‘(I) appropriate statistical infor-
mation and full and substantive anal-
ysis; 
‘‘(II) information on steps that 
the Investor Advocate has taken during 
the reporting period to improve inves-
tor services and the responsiveness of 
the Commission and self-regulatory or-
ganizations to investor concerns; 
‘‘(III) a summary of the most se-
rious problems encountered by inves-
tors during the reporting period;
953 
† HR 4173 EAS 
‘‘(IV) an inventory of the items 
described in subclauses (III) that in-
cludes— 
‘‘(aa) identification of any 
action taken by the Commission 
or the self-regulatory organization 
and the result of such action; 
‘‘(bb) the length of time that 
each item has remained on such 
inventory; and 
‘‘(cc) for items on which no 
action has been taken, the reasons 
for inaction, and an identifica-
tion of any official who is respon-
sible for such action; 
‘‘(V) recommendations for such 
administrative and legislative actions 
as may be appropriate to resolve prob-
lems encountered by investors; and 
‘‘(VI) any other information, as 
determined appropriate by the Investor 
Advocate. 
‘‘(iii) INDEPENDENCE.—Each report 
required under this paragraph shall be pro-
vided directly to the Committees listed in
954 
† HR 4173 EAS 
clause (i) without any prior review or com-
ment from the Commission, any commis-
sioner, any other officer or employee of the 
Commission, or the Office of Management 
and Budget. 
‘‘(iv) CONFIDENTIALITY.—No report re-
quired under clause (i) may contain con-
fidential information. 
‘‘(7) REGULATIONS.—The Commission shall, by 
regulation, establish procedures requiring a formal re-
sponse to all recommendations submitted to the Com-
mission by the Investor Advocate, not later than 3 
months after the date of such submission.’’. 
SEC. 915. STREAMLINING OF FILING PROCEDURES FOR 
SELF-REGULATORY ORGANIZATIONS. 
(a) FILING PROCEDURES.—Section 19(b) of the Secu-
rities Exchange Act of 1934 (15 U.S.C. 78s(b)) is amended 
by striking paragraph (2) (including the undesignated mat-
ter immediately following subparagraph (B)) and inserting 
the following: 
‘‘(2) APPROVAL PROCESS.— 
‘‘(A) APPROVAL PROCESS ESTABLISHED.— 
‘‘(i) IN GENERAL.—Except as provided 
in clause (ii), not later than 45 days after 
the date of publication of a proposed rule
955 
† HR 4173 EAS 
change under paragraph (1), the Commis-
sion shall— 
‘‘(I) by order, approve the pro-
posed rule change; or 
‘‘(II) institute proceedings under 
subparagraph (B) to determine wheth-
er the proposed rule change should be 
disapproved. 
‘‘(ii) EXTENSION OF TIME PERIOD.— 
The Commission may extend the period es-
tablished under clause (i) by not more than 
an additional 45 days, if— 
‘‘(I) the Commission determines 
that a longer period is appropriate 
and publishes the reasons for such de-
termination; or 
‘‘(II) the self-regulatory organiza-
tion that filed the proposed rule change 
consents to the longer period. 
‘‘(B) PROCEEDINGS.— 
‘‘(i) NOTICE
AND
HEARING.—If the 
Commission does not approve a proposed 
rule change under subparagraph (A), the 
Commission shall provide to the self-regu-
956 
† HR 4173 EAS 
latory organization that filed the proposed 
rule change— 
‘‘(I) notice of the grounds for dis-
approval under consideration; and 
‘‘(II) opportunity for hearing, to 
be concluded not later than 180 days 
after the date of publication of notice 
of the filing of the proposed rule 
change. 
‘‘(ii) ORDER
OF
APPROVAL
OR
DIS-
APPROVAL.— 
‘‘(I) IN GENERAL.—Except as pro-
vided in subclause (II), not later than 
180 days after the date of publication 
under paragraph (1), the Commission 
shall issue an order approving or dis-
approving the proposed rule change. 
‘‘(II) EXTENSION
OF
TIME
PE-
RIOD.—The Commission may extend 
the period for issuance under clause (I) 
by not more than 60 days, if— 
‘‘(aa) the Commission deter-
mines that a longer period is ap-
propriate and publishes the rea-
sons for such determination; or
957 
† HR 4173 EAS 
‘‘(bb) the self-regulatory orga-
nization that filed the proposed 
rule change consents to the longer 
period. 
‘‘(C) STANDARDS FOR APPROVAL AND DIS-
APPROVAL.— 
‘‘(i) 
APPROVAL.—The 
Commission 
shall approve a proposed rule change of a 
self-regulatory organization if it finds that 
such proposed rule change is consistent with 
the requirements of this title and the rules 
and regulations issued under this title that 
are applicable to such organization. 
‘‘(ii) DISAPPROVAL.—The Commission 
shall disapprove a proposed rule change of 
a self-regulatory organization if it does not 
make a finding described in clause (i). 
‘‘(iii) 
TIME
FOR
APPROVAL.—The 
Commission may not approve a proposed 
rule change earlier than 30 days after the 
date of publication under paragraph (1), 
unless the Commission finds good cause for 
so doing and publishes the reason for the 
finding.
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† HR 4173 EAS 
‘‘(D) RESULT OF FAILURE TO INSTITUTE OR 
CONCLUDE
PROCEEDINGS.—A 
proposed 
rule 
change shall be deemed to have been approved by 
the Commission, if— 
‘‘(i) the Commission does not approve 
the proposed rule change or begin pro-
ceedings under subparagraph (B) within the 
period described in subparagraph (A); or 
‘‘(ii) the Commission does not issue an 
order approving or disapproving the pro-
posed rule change under subparagraph (B) 
within the period described in subpara-
graph (B)(ii). 
‘‘(E) PUBLICATION DATE BASED ON FED-
ERAL REGISTER PUBLISHING.—For purposes of 
this paragraph, if, after filing a proposed rule 
change with the Commission pursuant to para-
graph (1), a self-regulatory organization pub-
lishes a notice of the filing of such proposed rule 
change, together with the substantive terms of 
such proposed rule change, on a publicly acces-
sible website, the Commission shall thereafter 
send the notice to the Federal Register for publi-
cation thereof under paragraph (1) within 15 
days of the date on which such website publica-
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† HR 4173 EAS 
tion is made. If the Commission fails to send the 
notice for publication thereof within such 15 day 
period, then the date of publication shall be 
deemed to be the date on which such website pub-
lication was made.’’. 
(b) CLARIFICATION OF FILING DATE.— 
(1) RULE OF CONSTRUCTION.—Section 19(b) of 
the Securities Exchange Act of 1934 (15 U.S.C. 
78s(b)) is amended by adding at the end the fol-
lowing: 
‘‘(10) RULE
OF
CONSTRUCTION
RELATING
TO 
FILING DATE OF PROPOSED RULE CHANGES.— 
‘‘(A) IN
GENERAL.—For purposes of this 
subsection, the date of filing of a proposed rule 
change shall be deemed to be the date on which 
the Commission receives the proposed rule 
change. 
‘‘(B) EXCEPTION.—A proposed rule change 
has not been received by the Commission for pur-
poses of subparagraph (A) if, not later than 7 
days after the date of receipt by the Commission, 
the Commission notifies the self-regulatory orga-
nization that such proposed rule change does not 
comply with the rules of the Commission relating 
to the required form of a proposed rule change.’’.
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† HR 4173 EAS 
(2) PUBLICATION.—Section 19(b)(1) of the Secu-
rities Exchange Act of 1934 (15 U.S.C. 78s(b)(1)) is 
amended by striking ‘‘upon’’ and inserting ‘‘as soon 
as practicable after the date of’’. 
(c) EFFECTIVE DATE OF PROPOSED RULES.—Section 
19(b)(3) of the Securities Exchange Act of 1934 (15 U.S.C. 
78s(b)(3)) is amended— 
(1) in subparagraph (A)— 
(A) by striking ‘‘may take effect’’ and in-
serting ‘‘shall take effect’’; and 
(B) by inserting ‘‘on any person, whether or 
not the person is a member of the self-regulatory 
organization’’ after ‘‘charge imposed by the self- 
regulatory organization’’; and 
(2) in subparagraph (C)— 
(A) by amending the second sentence to read 
as follows: ‘‘At any time within the 60-day pe-
riod beginning on the date of filing of such a 
proposed rule change in accordance with the pro-
visions of paragraph (1), the Commission sum-
marily may temporarily suspend the change in 
the rules of the self-regulatory organization made 
thereby, if it appears to the Commission that 
such action is necessary or appropriate in the 
public interest, for the protection of investors, or