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‘‘(A) except as provided in section 31(i)(2), 
shall be deposited and credited as offsetting col-
lections to the account providing appropriations 
to the Commission; and 
‘‘(B) except as provided in paragraph (8), 
shall not be collected for any fiscal year except 
to the extent provided in advance in appropria-
tions Acts.’’; and 
(2) by adding at the end the following: 
‘‘(8) LAPSE
OF
APPROPRIATION.—If on the 
first day of a fiscal year a regular appropriation to 
the Commission has not been enacted, the Commis-
sion shall continue to collect fees (as offsetting col-
lections) under this subsection at the rate in effect 
during the preceding fiscal year, until 5 days after 
the date such a regular appropriation is enacted.’’. 
(d) SECTION 14(g) OF THE SECURITIES EXCHANGE 
ACT OF 1934.—Section 14(g) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78n(g)) is amended— 
(1) by striking paragraph (5) and inserting the 
following: 
‘‘(5) OFFSETTING
COLLECTIONS.—Fees col-
lected pursuant to this subsection for any fiscal 
year— 
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‘‘(A) except as provided in section 31(i)(2), 
shall be deposited and credited as offsetting col-
lections to the account providing appropriations 
to the Commission; and 
‘‘(B) except as provided in paragraph (8), 
shall not be collected for any fiscal year except 
to the extent provided in advance in appropria-
tions Acts.’’; 
(2) by redesignating paragraph (8) as para-
graph (9); and 
(3) by inserting after paragraph (7) the fol-
lowing: 
‘‘(8) LAPSE
OF
APPROPRIATION.—If on the 
first day of a fiscal year a regular appropriation to 
the Commission has not been enacted, the Commis-
sion shall continue to collect fees (as offsetting col-
lections) under this subsection at the rate in effect 
during the preceding fiscal year, until 5 days after 
the date such a regular appropriation is enacted.’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section— 
(1) shall apply beginning on October 1, 2017, 
except that for fiscal year 2018, the Securities and 
Exchange Commission shall publish— 
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(A) the rates established under section 31 
of the Securities Exchange Act of 1934, as 
amended by this section, not later than 30 days 
after the date on which an Act making a reg-
ular appropriation to the Commission for fiscal 
year 2018 is enacted; and 
(B) the rate established under section 6(b) 
of the Securities Act of 1933, as amended by 
this section, not later than August 31, 2017; 
and 
(2) shall not apply with respect to fees for any 
fiscal year before fiscal year 2018. 
SEC. 805. COMMISSION FEDERAL CONSTRUCTION FUNDING 
PROHIBITION. 
The Securities and Exchange Commission may not 
obligate any funds for the purpose of Federal construction 
of a new headquarters facility of the Commission. 
SEC. 806. IMPLEMENTATION OF RECOMMENDATIONS. 
Section 967 of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act is amended by adding at 
the end the following: 
‘‘(d) IMPLEMENTATION
OF RECOMMENDATIONS.— 
Not later than 6 months after the date of enactment of 
this subsection, the Securities and Exchange Commission 
shall complete an implementation of the recommendations 
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contained in the report of the independent consultant 
issued under subsection (b) on March 10, 2011. To the 
extent that implementation of certain recommendations 
requires legislation, the Commission shall submit a report 
to Congress containing a request for legislation granting 
the Commission such authority it needs to fully implement 
such recommendations.’’. 
SEC. 807. OFFICE OF CREDIT RATINGS TO REPORT TO THE 
DIVISION OF TRADING AND MARKETS. 
Section 15E(p)(1) of the Securities Exchange Act of 
1934 (15 U.S.C. 78o–7(p)(1)) is amended— 
(1) in subparagraph (A), by striking ‘‘within 
the Commission’’ and inserting ‘‘within the Division 
of Trading and Markets’’; and 
(2) in subparagraph (B), by striking ‘‘report to 
the Chairman’’ and inserting ‘‘report to the head of 
the Division of Trading and Markets’’. 
SEC. 808. OFFICE OF MUNICIPAL SECURITIES TO REPORT 
TO THE DIVISION OF TRADING AND MAR-
KETS. 
Section 979 of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (15 U.S.C. 78o–4a) is 
amended— 
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(1) in subsection (a), by inserting ‘‘, within the 
Division of Trading and Markets,’’ after ‘‘There 
shall be in the Commission’’; and 
(2) in subsection (b), by striking ‘‘report to the 
Chairman’’ and inserting ‘‘report to the head of the 
Division of Trading and Markets’’. 
SEC. 809. INDEPENDENCE OF COMMISSION OMBUDSMAN. 
Section 4(g)(8) of the Securities Exchange Act of 
1934 (15 U.S.C. 78d(g)(8)) is amended— 
(1) in subparagraph (A), by striking ‘‘the In-
vestor Advocate shall appoint’’ and all that follows 
through ‘‘Investor Advocate’’ and inserting ‘‘the 
Chairman shall appoint an Ombudsman, who shall 
report to the Commission’’; and 
(2) in subparagraph (D)— 
(A) by striking ‘‘report to the Investor Ad-
vocate’’ and inserting ‘‘report to the Commis-
sion’’; and 
(B) by striking the last sentence. 
SEC. 810. INVESTOR ADVISORY COMMITTEE IMPROVE-
MENTS. 
Section 39 of the Securities Exchange Act of 1934 
(15 U.S.C. 78pp) is amended— 
(1) in subsection (a)(2)(B), by striking ‘‘sub-
mit’’ and inserting ‘‘in consultation with the Small 
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Business Capital Formation Advisory Committee es-
tablished under section 40, submit’’; 
(2) in subsection (b)— 
(A) in paragraph (1)— 
(i) in subparagraph (C), by striking 
‘‘and’’; 
(ii) in subparagraph (D)(iv), by strik-
ing the period at the end and inserting ‘‘; 
and’’; and 
(iii) by adding at the end the fol-
lowing: 
‘‘(E) a member of the Small Business Cap-
ital Formation Advisory Committee who shall 
be a nonvoting member.’’; 
(B) by amending paragraph (2) to read as 
follows: 
‘‘(2) TERM.— 
‘‘(A) LENGTH OF TERM FOR MEMBERS OF 
THE COMMITTEE.—Each member of the Com-
mittee appointed under paragraph (1), other 
than the Investor Advocate, shall serve for a 
term of 4 years. 
‘‘(B) LIMITATION ON MULTIPLE TERMS.— 
A member of the Committee may not serve for 
more than one term, except for the Investor Ad-
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vocate, a representative of State securities com-
missions, and the member of the Small Busi-
ness Capital Formation Advisory Committee.’’; 
and 
(C) in paragraph (3), by striking ‘‘para-
graph (1)(B)’’ and inserting ‘‘paragraph (1)’’; 
(3) in subsection (c), by amending paragraph 
(2) to read as follows: 
‘‘(2) TERM.— 
‘‘(A) LENGTH
OF
TERM.—Each member 
elected under paragraph (1) shall serve for a 
term of 3 years in the capacity for which the 
member was elected under paragraph (1). 
‘‘(B) LIMITATION ON MULTIPLE TERMS.— 
A member elected under paragraph (1) may not 
serve for more than one term in the capacity 
for which the member was elected under para-
graph (1).’’; and 
(4) by striking subsections (i) and (j). 
SEC. 811. DUTIES OF INVESTOR ADVOCATE. 
Section 4(g)(4) of the Securities Exchange Act of 
1934 (15 U.S.C. 78d(g)(4)) is amended— 
(1) in subparagraph (D)(ii), by striking ‘‘and’’; 
(2) in subparagraph (E), by striking the period 
at the end and inserting a semicolon; and 
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(3) by adding at the end the following: 
‘‘(F) not take a position on any legislation 
pending before Congress other than a legislative 
change proposed by the Investor Advocate pur-
suant to subparagraph (E); 
‘‘(G) consult with the Advocate for Small 
Business Capital Formation on proposed rec-
ommendations made under subparagraph (E); 
and 
‘‘(H) advise the Advocate for Small Busi-
ness Capital Formation on issues related to 
small business investors.’’. 
SEC. 812. ELIMINATION OF EXEMPTION OF SMALL BUSI-
NESS CAPITAL FORMATION ADVISORY COM-
MITTEE FROM FEDERAL ADVISORY COM-
MITTEE ACT. 
Section 40 of the Securities Exchange Act of 1934 
(as added by Public Law 114–284) is amended by striking 
subsection (h). 
SEC. 813. INTERNAL RISK CONTROLS. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended— 
(1) by inserting after section 4G, as added by 
this Act, the following: 
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‘‘SEC. 4H. INTERNAL RISK CONTROLS. 
‘‘(a) IN GENERAL.—Each of the following entities, in 
consultation with the Chief Economist, shall develop com-
prehensive internal risk control mechanisms to safeguard 
and govern the storage of all market data by such entity, 
all market data sharing agreements of such entity, and 
all academic research performed at such entity using mar-
ket data: 
‘‘(1) The Commission. 
‘‘(2) Each national security association required 
to register under section 15A. 
‘‘(b) CONSOLIDATED AUDIT TRAIL.—The Commis-
sion may not approve a national market system plan pur-
suant to part 242.613 of title 17, Code of Federal Regula-
tions (or any successor regulation), unless the operator of 
the consolidated audit trail created by such plan has devel-
oped, in consultation with the Chief Economist, com-
prehensive internal risk control mechanisms to safeguard 
and govern the storage of all market data by such oper-
ator, all market data sharing agreements of such operator, 
and all academic research performed at such operator 
using market data.’’; 
(2) in section 3(a), by redesignating the second 
paragraph (80) (relating to funding portals) as 
paragraph (81); and 
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(3) in section 3(a), by adding at the end the 
following: 
‘‘(82) CHIEF
ECONOMIST.—The term ‘Chief 
Economist’ means the Director of the Division of 
Economic and Risk Analysis, or an employee of the 
Commission with comparable authority, as deter-
mined by the Commission.’’. 
SEC. 814. APPLICABILITY OF NOTICE AND COMMENT RE-
QUIREMENTS OF THE ADMINISTRATIVE PRO-
CEDURE ACT TO GUIDANCE VOTED ON BY 
THE COMMISSION. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 4H, as added 
by this Act, the following: 
‘‘SEC. 4I. APPLICABILITY OF NOTICE AND COMMENT RE-
QUIREMENTS OF THE ADMINISTRATIVE PRO-
CEDURE ACT TO GUIDANCE VOTED ON BY 
THE COMMISSION. 
‘‘The notice and comment requirements of section 
553 of title 5, United States Code, shall also apply with 
respect to any Commission statement or guidance, includ-
ing interpretive rules, general statements of policy, or 
rules of Commission organization, procedure, or practice, 
that has the effect of implementing, interpreting, or pre-
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scribing law or policy and that is voted on by the Commis-
sion.’’. 
SEC. 815. LIMITATION ON PILOT PROGRAMS. 
(a) IN GENERAL.—Section 4 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78d), as amended by sec-
tion 371(e), is further amended by adding at the end the 
following: 
‘‘(l) LIMITATION ON PILOT PROGRAMS.— 
‘‘(1) IN GENERAL.—Any pilot program estab-
lished by self-regulatory organizations, either indi-
vidually or jointly, and filed with the Commission, 
including under section 11A or 19, shall terminate 
after the end of the 5-year period beginning on the 
date that the Commission approved such program, 
unless the Commission issues a rule to permanently 
continue such program or approves such program on 
a permanent basis. 
‘‘(2) EXTENSION.—With respect to a particular 
pilot program described under paragraph (1), the 
Commission may extend the 5-year period described 
under such paragraph for an additional 3 years if 
the Commission determines such extension is nec-
essary or appropriate in the public interest or for 
the protection of investors. 
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‘‘(3) LACK
OF
STATUTORY
AUTHORITY.—If, 
with respect to a pilot program described under 
paragraph (1), the Commission determines that the 
pilot program should continue permanently, but the 
Commission lacks sufficient statutory authority to 
permanently continue the program, the Commission 
shall, not later than 1 year before such pilot pro-
gram is scheduled to terminate pursuant to para-
graph (1), notify the Committee on Financial Serv-
ices of the House of Representatives and the Com-
mittee on Banking, Housing, and Urban Affairs of 
the Senate that the Commission believes the pro-
gram should continue permanently but does not have 
sufficient statutory authority to continue the pro-
gram.’’. 
(b) TREATMENT OF EXISTING PILOT PROGRAMS.— 
For purposes of section 4(k) of Securities Exchange Act 
of 1934, as added by subsection (a), the date on which 
the Commission approved a pilot program that was in ex-
istence on the date of the enactment of this Act shall be 
deemed to be the date of the enactment of this Act. 
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SEC. 816. PROCEDURE FOR OBTAINING CERTAIN INTEL-
LECTUAL PROPERTY. 
(a) PERSONS UNDER SECURITIES ACT OF 1933.— 
Section 8 of the Securities Act of 1933 (15 U.S.C. 77h) 
is amended by adding at the end the following: 
‘‘(g) PROCEDURE FOR OBTAINING CERTAIN INTEL-
LECTUAL PROPERTY.—The Commission is not authorized 
to compel under this title a person to produce or furnish 
source code, including algorithmic trading source code or 
similar intellectual property, to the Commission unless the 
Commission first issues a subpoena.’’. 
(b) PERSONS UNDER THE SECURITIES EXCHANGE 
ACT OF 1934.—Section 23 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78w), as amended by section 802, is 
further amended by adding at the end the following: 
‘‘(f) PROCEDURE FOR OBTAINING CERTAIN INTEL-
LECTUAL PROPERTY.—The Commission is not authorized 
to compel under this title a person to produce or furnish 
source code, including algorithmic trading source code or 
similar intellectual property, to the Commission unless the 
Commission first issues a subpoena.’’. 
(c) INVESTMENT COMPANIES.—Section 31 of the In-
vestment Company Act of 1940 (15 U.S.C. 80a–30) is 
amended by adding at the end the following: 
‘‘(e) PROCEDURE FOR OBTAINING CERTAIN INTEL-
LECTUAL PROPERTY.—The Commission is not authorized 
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to compel under this title an investment company to 
produce or furnish source code, including algorithmic trad-
ing source code or similar intellectual property, to the 
Commission unless the Commission first issues a sub-
poena.’’. 
(d) INVESTMENT ADVISERS.—Section 204 of the In-
vestment Advisers Act of 1940 (15 U.S.C. 80b–4) is 
amended— 
(1) by adding at the end the following: 
‘‘(f) PROCEDURE FOR OBTAINING CERTAIN INTEL-
LECTUAL PROPERTY.—The Commission is not authorized 
to compel under this title an investment adviser to produce 
or furnish source code, including algorithmic trading 
source code or similar intellectual property, to the Com-
mission unless the Commission first issues a subpoena.’’; 
and 
(2) in the second subsection (d), by striking 
‘‘(d)’’ and inserting ‘‘(e)’’. 
SEC. 817. PROCESS FOR CLOSING INVESTIGATIONS. 
(a) IN GENERAL.—Not later than 180 days after the 
date of the enactment of this Act, the Securities and Ex-
change Commission shall establish a process for closing 
investigations (including preliminary or informal inves-
tigations) that is designed to ensure that the Commission, 
in a timely manner— 
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(1) makes a determination of whether or not to 
institute an administrative or judicial action in a 
matter or refer the matter to the Attorney General 
for potential criminal prosecution; and 
(2) if the Commission determines not to insti-
tute such an action or refer the matter to the Attor-
ney General, informs the persons who are the sub-
ject of the investigation that the investigation is 
closed. 
(b) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to affect the authority of the Com-
mission to re-open an investigation if the Commission ob-
tains new evidence after the investigation is closed, subject 
to any applicable statute of limitations. 
SEC. 818. ENFORCEMENT OMBUDSMAN. 
(a) IN GENERAL.—Section 4 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78d), as amended by sec-
tion 803, is further amended by inserting after subsection 
(h) the following: 
‘‘(i) ENFORCEMENT OMBUDSMAN.— 
‘‘(1) ESTABLISHMENT.—The Commission shall 
have an Enforcement Ombudsman, who shall be ap-
pointed by and report directly to the Commission. 
‘‘(2) DUTIES.—The Enforcement Ombudsman 
shall— 
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‘‘(A) act as a liaison between the Commis-
sion and any person who is the subject of an in-
vestigation (including a preliminary or informal 
investigation) by the Commission or an admin-
istrative or judicial action brought by the Com-
mission in resolving problems that such persons 
may have with the Commission or the conduct 
of Commission staff; and 
‘‘(B) establish safeguards to maintain the 
confidentiality of communications between the 
persons described in subparagraph (A) and the 
Enforcement Ombudsman. 
‘‘(3) LIMITATION.—In carrying out the duties 
of the Enforcement Ombudsman under paragraph 
(2), the Enforcement Ombudsman shall utilize per-
sonnel of the Commission to the extent practicable. 
Nothing in this subsection shall be construed as re-
placing, altering, or diminishing the activities of any 
ombudsman or similar office of any other agency. 
‘‘(4) REPORT.—The Enforcement Ombudsman 
shall submit to the Commission and to the Com-
mittee on Financial Services of the House of Rep-
resentatives and the Committee on Banking, Hous-
ing, and Urban Affairs of the Senate an annual re-
port that describes the activities and evaluates the 
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effectiveness of the Enforcement Ombudsman during 
the preceding year.’’. 
(b) DEADLINE
FOR INITIAL APPOINTMENT.—The 
Securities and Exchange Commission shall appoint the ini-
tial Enforcement Ombudsman under subsection (i) of sec-
tion 4 of the Securities Exchange Act of 1934, as added 
by subsection (a), not later than 180 days after the date 
of the enactment of this Act. 
SEC. 819. ADEQUATE NOTICE. 
Section 21 of the Securities Exchange Act of 1934 
(15 U.S.C. 78u) is amended by adding at the end the fol-
lowing: 
‘‘(j) ADEQUATE NOTICE REQUIRED BEFORE BRING-
ING AN ENFORCEMENT ACTION.— 
‘‘(1) IN GENERAL.—No person shall be subject 
to an enforcement action by the Commission for an 
alleged violation of the securities laws or the rules 
and regulations issued thereunder if such person did 
not have adequate notice of such law, rule, or regu-
lation. 
‘‘(2) 
PUBLISHING
OF
INTERPRETATION 
DEEMED ADEQUATE NOTICE.—With respect to an 
enforcement action, adequate notice of a securities 
law or a rule or regulation issued thereunder shall 
be deemed to have been provided to a person if the 
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Commission approved a statement or guidance, in 
accordance with section 4I, with respect to the con-
duct that is the subject of the enforcement action, 
prior to the time that the person engaged in the con-
duct that is the subject of the enforcement action.’’. 
SEC. 820. ADVISORY COMMITTEE ON COMMISSION’S EN-
FORCEMENT POLICIES AND PRACTICES. 
(a) ESTABLISHMENT.—Not later than 6 months after 
the date of the enactment of this Act, the Chairman shall 
establish an advisory committee on the Commission’s en-
forcement policies and practices (in this section referred 
to as the ‘‘Committee’’). 
(b) DUTIES.— 
(1) ANALYSIS AND RECOMMENDATIONS.— 
(A) IN
GENERAL.—The Committee shall 
conduct an analysis of the policies and practices 
of the Commission relating to the enforcement 
of the securities laws and make recommenda-
tions to the Commission regarding changes to 
such policies and practices. 
(B) SPECIFIC
MATTERS
INCLUDED.—In 
carrying out subparagraph (A), the Committee 
shall analyze and make recommendations to the 
Commission regarding matters including the 
following: 
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(i) How the Commission’s enforce-
ment objectives and strategies may be 
more effective. 
(ii) The Commission’s enforcement 
practices and procedures from the point of 
view of due process, the relationship of en-
forcement action to notice of legal require-
ments, the attribution of responsibility for 
violations, and the protection of reputation 
and rights of privacy. 
(iii) The Commission’s enforcement 
policies and practices in light of its statu-
tory responsibility to protect investors, 
maintain fair, orderly, and efficient mar-
kets, and facilitate capital formation. 
(iv) The appropriate blend of regula-
tion, publicity, and formal enforcement ac-
tion and on methods of furthering vol-
untary compliance. 
(v) Criteria for the selection and dis-
position of enforcement actions, the ade-
quacy of sanctions authorized by law, and 
the suitability and effectiveness of sanc-
tions imposed by the Commission pro-
ceedings. 
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(2) REPORT.—Not later than 1 year after the 
establishment of the Committee under subsection 
(a), the Committee shall submit to the Commission 
and the appropriate congressional committees a re-
port containing the results of the analysis and the 
recommendations required by paragraph (1)(A). 
(c) MEMBERSHIP.— 
(1) NUMBER AND APPOINTMENT.—The Com-
mittee shall be composed of not less than 3 and not 
greater than 7 members appointed by the Chairman. 
(2) CHAIRPERSON.—The Chairperson of the 
Committee shall be designated by the Chairman at 
the time of appointment of the members. 
(d) SUPPORT.—The Commission shall provide the 
Committee with the administrative, professional, and tech-
nical support required by the Committee to carry out its 
responsibilities under this section. 
(e) TERMINATION OF COMMITTEE.—The Committee 
established by subsection (a) shall terminate on the date 
that the report required by subsection (b)(2) is submitted. 
(f) CONSIDERATION
AND
ADOPTION
OF
REC-
OMMENDATIONS BY COMMISSION.—Not later than 180 
days after the Committee submits the report required by 
subsection (b)(2), the Commission shall— 
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(1) consider the analysis and recommendations 
included in such report; 
(2) adopt such recommendations, with any 
modifications, as the Commission considers appro-
priate; and 
(3) submit to the appropriate congressional 
committees a report that— 
(A) lists each recommendation included in 
such report that the Commission does not adopt 
or adopts with material modifications; and 
(B) for each recommendation listed under 
subparagraph (A), explains why the Commis-
sion does not consider it appropriate or does 
not have sufficient authority to adopt the rec-
ommendation or to adopt the recommendation 
without material modification. 
(g) DEFINITIONS.—In this section: 
(1) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘‘appropriate congressional com-
mittees’’ means the Committee on Financial Services 
of the House of Representatives and the Committee 
on Banking, Housing, and Urban Affairs of the Sen-
ate. 
(2) CHAIRMAN.—The term ‘‘Chairman’’ means 
the Chairman of the Commission. 
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(3) COMMISSION.—The term ‘‘Commission’’ 
means the Securities and Exchange Commission. 
(4) SECURITIES LAWS.—The term ‘‘securities 
laws’’ has the meaning given such term in section 
3(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a)). 
(h) APPLICATION OF THE FEDERAL ADVISORY COM-
MITTEE ACT.—The Committee is an advisory committee 
for purposes of the Federal Advisory Committee Act (5 
U.S.C. App.). 
SEC. 821. PROCESS TO PERMIT RECIPIENT OF WELLS NOTI-
FICATION TO APPEAR BEFORE COMMISSION 
STAFF IN-PERSON. 
(a) IN GENERAL.—Not later than 180 days after the 
date of the enactment of this Act, the Securities and Ex-
change Commission shall establish a process under which, 
in any instance in which the Commission staff provides 
a written Wells notification to an individual informing the 
individual that the Commission staff has made a prelimi-
nary determination to recommend that the Commission 
bring an administrative or judicial action against the indi-
vidual, the individual shall have the right to make an in- 
person presentation before the Commission staff con-
cerning such recommendation and to be represented by 
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counsel at such presentation, at the individual’s own ex-
pense. 
(b) ATTENDANCE BY COMMISSIONERS.—Such proc-
ess shall provide that each Commissioner of the Commis-
sion, or a designee of the Commissioner, may attend any 
such presentation. 
(c) REPORT BY COMMISSION STAFF.—Such process 
shall provide that, before any Commission vote on whether 
to bring the administrative or judicial action against the 
individual, the Commission staff shall provide to each 
Commissioner a written report on any such presentation, 
including any factual or legal arguments made by the indi-
vidual and any supporting documents provided by the indi-
vidual. 
SEC. 822. PUBLICATION OF ENFORCEMENT MANUAL. 
(a) IN GENERAL.—Not later than 1 year after the 
date of the enactment of this Act, the Securities and Ex-
change Commission shall approve, by vote of the Commis-
sion, and publish an updated manual that sets forth the 
policies and practices that the Commission will follow in 
the enforcement of the securities laws (as defined in sec-
tion 3(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a))). Such manual shall include policies and 
practices required by this Act, and by the amendments 
made by this Act, and shall be developed so as to ensure 
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transparency in such enforcement and uniform application 
of such laws by the Commission. 
(b) ENFORCEMENT PLAN AND REPORT.—Beginning 
on the date that is one year after the date of enactment 
of this Act, and each year thereafter, the Securities and 
Exchange Commission shall transmit to Congress and 
publish on its Internet website an annual enforcement 
plan and report that shall— 
(1) detail the priorities of the Commission with 
regard to enforcement and examination activities for 
the forthcoming year; 
(2) report on the Commission’s enforcement 
and examination activities for the previous year, in-
cluding an assessment of how such activities com-
ported with the priorities identified for that year 
pursuant to paragraph (1); 
(3) contain an analysis of litigated decisions 
found not in favor of the Commission over the pre-
ceding year; 
(4) contain a description of any emerging 
trends the Commission has focused on as part of its 
enforcement program, including whether and how 
the Commission has alerted or communicated with 
those who may be subject to the Commission’s regu-
lation of emerging trends; 
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(5) contain a description of legal theories or 
standards employed by the Commission in enforce-
ment over the preceding year that had not previously 
been employed, and a summary justifying each such 
theory or standard; and 
(6) provide an opportunity and mechanism for 
public comment. 
SEC. 823. PRIVATE PARTIES AUTHORIZED TO COMPEL THE 
SECURITIES AND EXCHANGE COMMISSION TO 
SEEK SANCTIONS BY FILING CIVIL ACTIONS. 
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: 
‘‘SEC. 41. PRIVATE PARTIES AUTHORIZED TO COMPEL THE 
COMMISSION TO SEEK SANCTIONS BY FILING 
CIVIL ACTIONS. 
‘‘(a) TERMINATION
OF
ADMINISTRATIVE
PRO-
CEEDING.—In the case of any person who is a party to 
a proceeding brought by the Commission under a securi-
ties law, to which section 554 of title 5, United States 
Code, applies, and against whom an order imposing a 
cease and desist order and a penalty may be issued at 
the conclusion of the proceeding, that person may, not 
later than 20 days after receiving notice of such pro-
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ceeding, and at that person’s discretion, require the Com-
mission to terminate the proceeding. 
‘‘(b) CIVIL ACTION AUTHORIZED.—If a person re-
quires the Commission to terminate a proceeding pursuant 
to subsection (a), the Commission may bring a civil action 
against that person for the same remedy that might be 
imposed. 
‘‘(c) STANDARD OF PROOF IN ADMINISTRATIVE PRO-
CEEDING.—Notwithstanding any other provision of law, in 
the case of a proceeding brought by the Commission under 
a securities law, to which section 554 of title 5, United 
States Code, applies, a legal or equitable remedy may be 
imposed on the person against whom the proceeding was 
brought only on a showing by the Commission of clear and 
convincing evidence that the person has violated the rel-
evant provision of law.’’. 
SEC. 824. CERTAIN FINDINGS REQUIRED TO APPROVE 
CIVIL MONEY PENALTIES AGAINST ISSUERS. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.) is amended by inserting after section 4E the fol-
lowing: 
‘‘SEC. 4F. CERTAIN FINDINGS REQUIRED TO APPROVE 
CIVIL MONEY PENALTIES AGAINST ISSUERS. 
‘‘The Commission may not seek against or impose on 
an issuer a civil money penalty for violation of the securi-
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ties laws unless the publicly available text of the order ap-
proving the seeking or imposition of such penalty contains 
findings, supported by an analysis by the Division of Eco-
nomic and Risk Analysis and certified by the Chief Econo-
mist, of whether— 
‘‘(1) the alleged violation resulted in direct eco-
nomic benefit to the issuer; and 
‘‘(2) the penalty will harm the shareholders of 
the issuer.’’. 
SEC. 825. REPEAL OF AUTHORITY OF THE COMMISSION TO 
PROHIBIT PERSONS FROM SERVING AS OFFI-
CERS OR DIRECTORS. 
(a) UNDER SECURITIES ACT OF 1933.—Subsection 
(f) of section 8A of the Securities Act of 1933 (15 U.S.C. 
77h–1) is repealed. 
(b) UNDER SECURITIES EXCHANGE ACT OF 1934.— 
Subsection (f) of section 21C of the Securities Exchange 
Act of 1934 (15 U.S.C. 78u–3) is repealed. 
SEC. 826. SUBPOENA DURATION AND RENEWAL. 
Section 21(b) of the Securities Exchange Act of 1934 
(15 U.S.C. 78u(b)) is amended— 
(1) by inserting ‘‘SUBPOENA.—’’ after the enu-
merator; 
(2) by striking ‘‘For the purpose of’’ and insert-
ing the following: 
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‘‘(1) IN GENERAL.—For the purpose of’’; and 
(3) by adding at the end the following: 
‘‘(2) OMNIBUS ORDERS OF INVESTIGATION.— 
‘‘(A) DURATION AND RENEWAL.—An om-
nibus order of investigation shall not be for an 
indefinite duration and may be renewed only by 
Commission action. 
‘‘(B) DEFINITION.—In subparagraph (A), 
the term ‘omnibus order of investigation’ means 
an order of the Commission authorizing 1 or 
more members of the Commission or its staff to 
issue subpoenas under paragraph (1) to mul-
tiple persons in relation to a particular subject 
matter area.’’. 
SEC. 827. ELIMINATION OF AUTOMATIC DISQUALIFICA-
TIONS. 
The Securities Exchange Act of 1934 (15 U.S.C. 78a 
et seq.), as amended by this Act, is further amended by 
inserting after section 4F the following: 
‘‘SEC. 4G. ELIMINATION OF AUTOMATIC DISQUALIFICA-
TIONS. 
‘‘(a) IN GENERAL.—Notwithstanding any other pro-
vision of law, a non-natural person may not be disqualified 
or otherwise made ineligible to use an exemption or reg-
istration provision, engage in an activity, or qualify for 
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any similar treatment under a provision of the securities 
laws or the rules issued by the Commission under the se-
curities laws by reason of having, or a person described 
in subsection (b) having, been convicted of any felony or 
misdemeanor or made the subject of any judicial or admin-
istrative order, judgment, or decree arising out of a gov-
ernmental action (including an order, judgment, or decree 
agreed to in a settlement), or having, or a person de-
scribed in subsection (b) having, been suspended or ex-
pelled from membership in, or suspended or barred from 
association with a member of, a registered national securi-
ties exchange or a registered national or affiliated securi-
ties association for any act or omission to act constituting 
conduct inconsistent with just and equitable principles of 
trade, unless the Commission, by order, on the record 
after notice and an opportunity for hearing, makes a de-
termination that such non-natural person should be so dis-
qualified or otherwise made ineligible for purposes of such 
provision. 
‘‘(b) PERSON DESCRIBED.—A person is described in 
this subsection if the person is— 
‘‘(1) a natural person who is a director, officer, 
employee, partner, member, or shareholder of the 
non-natural person referred to in subsection (a) or 
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is otherwise associated or affiliated with such non- 
natural person in any way; or 
‘‘(2) a non-natural person who is associated or 
affiliated with the non-natural person referred to in 
subsection (a) in any way. 
‘‘(c) RULE OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed to limit any authority of the Com-
mission, by order, on the record after notice and an oppor-
tunity for hearing, to prohibit a person from using an ex-
emption or registration provision, engaging in an activity, 
or qualifying for any similar treatment under a provision 
of the securities laws, or the rules issued by the Commis-
sion under the securities laws, by reason of a circumstance 
referred to in subsection (a) or any similar circumstance.’’. 
SEC. 828. DENIAL OF AWARD TO CULPABLE WHISTLE-
BLOWERS. 
Section 21F(c) of the Securities Exchange Act of 
1934 (15 U.S.C. 78u–6(c)) is amended— 
(1) in paragraph (2)— 
(A) in subparagraph (C), by striking ‘‘or’’ 
at the end; 
(B) in subparagraph (D), by striking the 
period and inserting ‘‘; or’’; and 
(C) by adding at the end the following: 
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‘‘(E) to any whistleblower who is respon-
sible for, or complicit in, the violation of the se-
curities laws for which the whistleblower pro-
vided information to the Commission.’’; and 
(2) by adding at the end the following: 
‘‘(3) DEFINITION.—For purposes of paragraph 
(2)(E), a person is responsible for, or complicit in, 
a violation of the securities laws if, with the intent 
to promote or assist the violation, the person— 
‘‘(A) procures, induces, or causes another 
person to commit the offense; 
‘‘(B) aids or abets another person in com-
mitting the offense; or 
‘‘(C) having a duty to prevent the viola-
tion, fails to make an effort the person is re-
quired to make.’’. 
SEC. 829. CLARIFICATION OF AUTHORITY TO IMPOSE SANC-
TIONS ON PERSONS ASSOCIATED WITH A 
BROKER OR DEALER. 
Section 15(b)(6)(A)(i) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78o(b)(6)(A)(i)) is amended by strik-
ing ‘‘enumerated’’ and all that follows and inserting ‘‘enu-
merated in subparagraph (A), (D), (E), (G), or (H) of 
paragraph (4) of this subsection;’’. 
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SEC. 830. COMPLAINT AND BURDEN OF PROOF REQUIRE-
MENTS FOR CERTAIN ACTIONS FOR BREACH 
OF FIDUCIARY DUTY. 
Section 36(b) of the Investment Company Act of 
1940 (15 U.S.C. 80a–35(b)) is amended by adding at the 
end the following: 
‘‘(7) In any such action brought by a security 
holder of a registered investment company on behalf 
of such company— 
‘‘(A) the complaint shall state with par-
ticularity all facts establishing a breach of fidu-
ciary duty, and, if an allegation of any such 
facts is based on information and belief, the 
complaint shall state with particularity all facts 
on which that belief is formed; and 
‘‘(B) such security holder shall have the 
burden of proving a breach of fiduciary duty by 
clear and convincing evidence.’’. 
SEC. 831. CONGRESSIONAL ACCESS TO INFORMATION 
HELD BY THE PUBLIC COMPANY ACCOUNT-
ING OVERSIGHT BOARD. 
Section 105(b)(5) of the Sarbanes-Oxley Act of 2002 
(15 U.S.C. 7215(b)(5)) is amended— 
(1) in subparagraph (A), by striking ‘‘subpara-
graphs (B) and (C)’’ and inserting ‘‘subparagraphs 
(B), (C), and (D)’’; and 
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(2) by adding at the end the following: 
‘‘(D) AVAILABILITY
TO
THE
CONGRES-
SIONAL COMMITTEES.—The Board shall make 
available to the Committees specified under sec-
tion 101(h)— 
‘‘(i) such information as the Commit-
tees shall request; and 
‘‘(ii) with respect to any confidential 
or privileged information provided in re-
sponse to a request under clause (i), in-
cluding any information subject to section 
104(g) and subparagraph (A), or any con-
fidential or privileged information provided 
orally in response to such a request, such 
information shall maintain the protections 
provided in subparagraph (A), and shall 
retain its confidential and privileged status 
in the hands of the Board and the Com-
mittees.’’. 
SEC. 832. ABOLISHING INVESTOR ADVISORY GROUP. 
The Public Company Accounting Oversight Board 
shall abolish the Investor Advisory Group. 
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SEC. 833. REPEAL OF REQUIREMENT FOR PUBLIC COM-
PANY ACCOUNTING OVERSIGHT BOARD TO 
USE CERTAIN FUNDS FOR MERIT SCHOLAR-
SHIP PROGRAM. 
(a) IN GENERAL.—Section 109(c) of the Sarbanes- 
Oxley Act of 2002 (15 U.S.C. 7219(c)) is amended by 
striking paragraph (2). 
(b) CONFORMING AMENDMENTS.—Section 109 of the 
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7219) is amend-
ed— 
(1) in subsection (c), by striking ‘‘USES
OF 
FUNDS’’ and all that follows through ‘‘The budget’’ 
and inserting ‘‘USES OF FUNDS.—The budget’’; and 
(2) in subsection (f), by striking ‘‘subsection 
(c)(1)’’ and inserting ‘‘subsection (c)’’. 
SEC. 834. REALLOCATION OF FINES FOR VIOLATIONS OF 
RULES OF MUNICIPAL SECURITIES RULE-
MAKING BOARD. 
(a) IN GENERAL.—Section 15B(c)(9) of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 78o–4(c)(9)) is 
amended to read as follows: 
‘‘(9) Fines collected for violations of the rules of the 
Board shall be deposited and credited as general revenue 
of the Treasury, except as otherwise provided in section 
308 of the Sarbanes-Oxley Act of 2002 or section 21F 
of this title.’’. 
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(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to fines collected after the date 
of enactment of this Act. 
Subtitle B—Eliminating Excessive 
Government Intrusion in the 
Capital Markets 
SEC. 841. REPEAL OF DEPARTMENT OF LABOR FIDUCIARY 
RULE AND REQUIREMENTS PRIOR TO RULE-
MAKING RELATING TO STANDARDS OF CON-
DUCT FOR BROKERS AND DEALERS. 
(a) REPEAL OF DEPARTMENT OF LABOR FIDUCIARY 
RULE.—The final rule of the Department of Labor titled 
‘‘Definition of the Term ‘Fiduciary’; Conflict of Interest 
Rule—Retirement Investment Advice’’ and related prohib-
ited transaction exemptions published April 8, 2016 (81 
Fed. Reg. 20946) shall have no force or effect. 
(b) STAY
ON RULES DEFINING CERTAIN FIDU-
CIARIES.—After the date of enactment of this Act, the 
Secretary of Labor shall not prescribe any regulation 
under the Employee Retirement Income Security Act of 
1974 (29 U.S.C. 1001 et seq.) defining the circumstances 
under which an individual is considered a fiduciary until 
the date that is 60 days after the Securities and Exchange 
Commission issues a final rule relating to standards of 
conduct for brokers and dealers pursuant to the second 
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subsection (k) of section 15 of the Securities Exchange 
Act of 1934 (15 U.S.C. 78o(k)). 
(c) REQUIREMENTS PRIOR TO RULEMAKING RELAT-
ING TO STANDARDS OF CONDUCT FOR BROKERS AND 
DEALERS.—The second subsection (k) of section 15 of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o(k)), as 
added by section 913(g)(1) of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act (12 U.S.C. 5301 
et seq.), is amended by adding at the end the following: 
‘‘(3) REQUIREMENTS PRIOR TO RULEMAKING.— 
The Commission shall not promulgate a rule pursu-
ant to paragraph (1) before providing a report to the 
Committee on Financial Services of the House of 
Representatives and the Committee on Banking, 
Housing, and Urban Affairs of the Senate and mak-
ing such report available on the Commission’s 
website describing whether— 
‘‘(A) retail investors (and such other cus-
tomers as the Commission may provide) are 
being harmed due to brokers or dealers oper-
ating under different standards of conduct than 
those that apply to investment advisors under 
section 211 of the Investment Advisers Act of 
1940 (15 U.S.C. 80b–11); 
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‘‘(B) alternative remedies will reduce any 
confusion or harm to retail investors due to 
brokers or dealers operating under different 
standards of conduct than those standards that 
apply to investment advisors under section 211 
of the Investment Advisers Act of 1940 (15 
U.S.C. 80b–11), including— 
‘‘(i) simplifying the titles used by bro-
kers, dealers, and investment advisers; and 
‘‘(ii) enhancing disclosure surrounding 
the different standards of conduct cur-
rently applicable to brokers, dealers, and 
investment advisers; 
‘‘(C) the adoption of a uniform fiduciary 
standard of conduct for brokers, dealers, and 
investment advisors would adversely impact the 
commissions of brokers and dealers, the avail-
ability of proprietary products offered by bro-
kers and dealers, and the ability of brokers and 
dealers to engage in principal transactions with 
customers; and 
‘‘(D) the adoption of a uniform fiduciary 
standard of conduct for brokers or dealers and 
investment advisors would adversely impact re-
tail investor access to personalized and cost-ef-
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fective investment advice, recommendations 
about securities, or the availability of such ad-
vice and recommendations. 
‘‘(4) ECONOMIC ANALYSIS.—The Commission’s 
conclusions contained in the report described in 
paragraph (3) shall be supported by economic anal-
ysis. 
‘‘(5) REQUIREMENTS
FOR
PROMULGATING
A 
RULE.—The Commission shall publish in the Fed-
eral Register alongside the rule promulgated pursu-
ant to paragraph (1) formal findings that such rule 
would reduce confusion or harm to retail customers 
(and such other customers as the Commission may 
by rule provide) due to different standards of con-
duct applicable to brokers, dealers, and investment 
advisors. 
‘‘(6) REQUIREMENTS UNDER INVESTMENT AD-
VISERS
ACT
OF
1940.—In proposing rules under 
paragraph (1) for brokers or dealers, the Commis-
sion shall consider the differences in the registration, 
supervision, and examination requirements applica-
ble to brokers, dealers, and investment advisors.’’. 
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SEC. 842. EXEMPTION FROM RISK RETENTION REQUIRE-
MENTS FOR NONRESIDENTIAL MORTGAGE. 
(a) IN GENERAL.—Section 15G of the Securities Ex-
change Act of 1934 (15 U.S.C. 78o–11) is amended— 
(1) in subsection (a)— 
(A) in paragraph (3)(B), by striking ‘‘and’’ 
at the end; 
(B) in paragraph (4)(B), by striking the 
period and inserting ‘‘; and’’; and 
(C) by adding at the end the following: 
‘‘(5) the term ‘asset-backed security’ refers only 
to an asset-backed security that is comprised wholly 
of residential mortgages.’’; 
(2) in subsection (b)— 
(A) by striking paragraph (1); and 
(B) by striking ‘‘(2) RESIDENTIAL MORT-
GAGES.—’’; 
(3) by striking subsection (h) and redesignating 
subsection (i) as subsection (h); and 
(4) in subsection (h) (as so redesignated)— 
(A) by striking ‘‘effective—’’ and all that 
follows through ‘‘(1) with respect to’’ and in-
serting ‘‘effective with respect to’’; 
(B) in paragraph (1), by striking ‘‘; and’’ 
and inserting a period; and 
(C) by striking paragraph (2). 
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(b) CONFORMING AMENDMENT.—Section 941 of the 
Dodd-Frank Wall Street Reform and Consumer Protec-
tion Act is amended by striking subsection (c). 
SEC. 843. FREQUENCY OF SHAREHOLDER APPROVAL OF 
EXECUTIVE COMPENSATION. 
Section 14A(a) of the Securities Exchange Act of 
1934 (15 U.S.C. 78n–1(a)) is amended— 
(1) in paragraph (1), by striking ‘‘Not less fre-
quently than once every 3 years’’ and inserting 
‘‘Each year in which there has been a material 
change to the compensation of executives of an 
issuer from the previous year’’; and 
(2) by striking paragraph (2) and redesignating 
paragraph (3) as paragraph (2). 
SEC. 844. SHAREHOLDER PROPOSALS. 
(a) RESUBMISSION THRESHOLDS.—The Securities 
and Exchange Commission shall revise section 240.14a– 
8(i)(12) of title 17, Code of Federal Regulations to— 
(1) in paragraph (i), adjust the 3 percent 
threshold to 6 percent; 
(2) in paragraph (ii), adjust the 6 percent 
threshold to 15 percent; and 
(3) in paragraph (iii), adjust the 10 percent 
threshold to 30 percent. 
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(b) HOLDING REQUIREMENT.—The Securities and 
Exchange Commission shall revise the holding require-
ment for a shareholder to be eligible to submit a share-
holder proposal to an issuer in section 240.14a–8(b)(1) 
of title 17, Code of Federal Regulations, to— 
(1) eliminate the option to satisfy the holding 
requirement by holding a certain dollar amount; 
(2) require the shareholder to hold 1 percent of 
the issuer’s securities entitled to be voted on the 
proposal, or such greater percentage as determined 
by the Commission; and 
(3) adjust the 1 year holding period to 3 years. 
(c) SHAREHOLDER PROPOSALS ISSUED BY PROX-
IES.—Section 14 of the Securities Exchange Act of 1934 
(15 U.S.C. 78n) is amended by adding at the end the fol-
lowing: 
‘‘(j) SHAREHOLDER PROPOSALS BY PROXIES NOT 
PERMITTED.—An issuer may not include in its proxy ma-
terials a shareholder proposal submitted by a person in 
such person’s capacity as a proxy, representative, agent, 
or person otherwise acting on behalf of a shareholder.’’. 
SEC. 845. PROHIBITION ON REQUIRING A SINGLE BALLOT. 
Section 14 of the Securities Exchange Act of 1934 
(15 U.S.C. 78n) is amended by adding at the end the fol-
lowing: 
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‘‘(k) PROHIBITION ON REQUIRING A SINGLE BAL-
LOT.—The Commission may not require that a solicitation 
of a proxy, consent, or authorization to vote a security 
of an issuer in an election of members of the board of 
directors of the issuer be made using a single ballot or 
card that lists both individuals nominated by (or on behalf 
of) the issuer and individuals nominated by (or on behalf 
of) other proponents and permits the person granting the 
proxy, consent, or authorization to select from among indi-
viduals in both groups.’’. 
SEC. 846. REQUIREMENT FOR MUNICIPAL ADVISOR FOR 
ISSUERS OF MUNICIPAL SECURITIES. 
Section 15B(d) of the Securities Exchange Act of 
1934 (15 U.S.C. 78o–4(d)) is amended by adding at the 
end the following: 
‘‘(3) An issuer of municipal securities shall not be 
required to retain a municipal advisor prior to issuing any 
such securities.’’. 
SEC. 847. SMALL ISSUER EXEMPTION FROM INTERNAL 
CONTROL EVALUATION. 
Section 404(c) of the Sarbanes-Oxley Act of 2002 (15 
U.S.C. 7262(c)) is amended to read as follows: 
‘‘(c) EXEMPTION
FOR SMALLER ISSUERS.—Sub-
section (b) shall not apply with respect to any audit report 
prepared for an issuer that has total market capitalization 
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of less than $500,000,000, nor to any issuer that is a de-
pository 
institution 
with 
assets 
of 
less 
than 
$1,000,000,000.’’. 
SEC. 848. STREAMLINING OF APPLICATIONS FOR AN EX-
EMPTION FROM THE INVESTMENT COMPANY 
ACT OF 1940. 
Section 6(c) of the Investment Company Act of 1940 
(15 U.S.C. 80a–6(c)) is amended— 
(1) by striking ‘‘(c) The Commission’’ and in-
serting the following: 
‘‘(c) GENERAL EXEMPTIVE AUTHORITY.— 
‘‘(1) IN GENERAL.—The Commission’’; and 
(2) by adding at the end the following: 
‘‘(2) APPLICATION PROCESS.— 
‘‘(A) IN GENERAL.—A person who wishes 
to receive an exemption from the Commission 
pursuant to paragraph (1) shall file an applica-
tion with the Commission in such form and 
manner and containing such information as the 
Commission may require. 
‘‘(B) PUBLICATION; REJECTION
OF
IN-
VALID APPLICATIONS.— 
‘‘(i) IN GENERAL.—Not later than the 
end of the 5-day period beginning on the 
date that the Commission receives an ap-
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plication under subparagraph (A), the 
Commission shall either— 
‘‘(I) publish the application, in-
cluding by publication on the website 
of the Commission; or 
‘‘(II) if the Commission deter-
mines that the application does not 
comply with the proper form, manner, 
or information requirements described 
under subparagraph (A), reject such 
application and notify the applicant of 
the specific reasons the application 
was rejected. 
‘‘(ii) FAILURE TO PUBLISH APPLICA-
TION.—If the Commission does not reject 
an application under clause (i)(II), but 
fails to publish the application by the end 
of the time period specified under clause 
(i), such application shall be deemed to 
have been published on the date that is the 
end of such time period. 
‘‘(3) DETERMINATION BY COMMISSION.— 
‘‘(A) IN
GENERAL.—Not later than 45 
days after the date that the Commission pub-
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‘‘(i) the Commission determines that a 
longer period is appropriate and publishes 
the reasons for such determination; or 
‘‘(ii) the applicant consents to the 
longer period. 
‘‘(C) TIME PERIOD FOR WITHDRAWAL.—If 
the Commission makes a request under sub-
paragraph (A)(ii) for an applicant to withdraw 
an application, such application shall be deemed 
to be denied if the applicant informs the Com-
mission that the applicant will not withdraw the 
application or if the applicant does not with-
draw the application before the end of the 30- 
day period beginning on the date the Commis-
sion makes such request. 
‘‘(4) PROCEEDINGS; NOTICE AND HEARING.—If 
an application is denied pursuant to paragraph (3), 
the Commission shall provide the applicant with— 
‘‘(A) a written explanation for why the ap-
plication was not approved; and 
‘‘(B) an opportunity for hearing, if re-
quested by the applicant not later than 20 days 
after the date of such denial, with such hearing 
to be commenced not later than 30 days after 
the date of such denial. 
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‘‘(5) RESULT OF FAILURE TO INSTITUTE OR 
COMMENCE PROCEEDINGS.—An application shall be 
deemed to have been approved by the Commission, 
if— 
‘‘(A) the Commission fails to either ap-
prove, request the withdrawal of, or deny the 
application, 
as 
required 
under 
paragraph 
(3)(A), within the time period required under 
paragraph (3)(A), as such time period may 
have been extended pursuant to paragraph 
(3)(B); or 
‘‘(B) the applicant requests an opportunity 
for hearing, pursuant to paragraph (4)(B), but 
the Commission does not commence such hear-
ing within the time period required under para-
graph (4)(B). 
‘‘(6) RULEMAKING.—Not later than 180 days 
after the date of enactment of this paragraph, the 
Commission shall issue rules to carry out this sub-
section.’’. 
SEC. 849. RESTRICTION ON RECOVERY OF ERRONEOUSLY 
AWARDED COMPENSATION. 
Section 10D(b)(2) of the Securities Exchange Act of 
1934 (15 U.S.C. 78j–4(b)(2)) is amended by inserting be-
fore the period the following: ‘‘, where such executive offi-
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cer had control or authority over the financial reporting 
that resulted in the accounting restatement’’. 
SEC. 850. EXEMPTIVE AUTHORITY FOR CERTAIN PROVI-
SIONS RELATING TO REGISTRATION OF NA-
TIONALLY RECOGNIZED STATISTICAL RAT-
ING ORGANIZATIONS. 
Section 15E of the Securities Exchange Act of 1934 
(15 U.S.C. 78o–7) is amended by adding at the end the 
following: 
‘‘(w) COMMISSION EXEMPTIVE AUTHORITY.—The 
Commission, by rules and regulations upon its own mo-
tion, or by order upon application, may conditionally or 
unconditionally exempt any person from any provision or 
provisions of this title or of any rule or regulation there-
under, if and to the extent it determines that such rule, 
regulation, or requirement is creating a barrier to entry 
into the market for nationally recognized statistical rating 
organizations or impeding competition among such organi-
zations, or that such an exemption is necessary or appro-
priate in the public interest and is consistent with the pro-
tection of investors.’’. 
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SEC. 851. RISK-BASED EXAMINATIONS OF NATIONALLY 
RECOGNIZED STATISTICAL RATING ORGANI-
ZATIONS. 
Section 15E(p)(3) of the Securities Exchange Act of 
1934 (15 U.S.C. 78o–7(p)(3)) is amended— 
(1) in subparagraph (A)— 
(A) in the heading, by striking ‘‘ANNUAL’’ 
and inserting ‘‘RISK-BASED’’; 
(B) by striking ‘‘an examination’’ and in-
serting ‘‘examinations’’; and 
(C) by striking ‘‘at least annually’’; and 
(2) in subparagraph (B), in the matter pre-
ceding clause (i), by inserting ‘‘, as appropriate,’’ 
after ‘‘Each examination under subparagraph (A) 
shall include’’. 
SEC. 852. TRANSPARENCY OF CREDIT RATING METH-
ODOLOGIES. 
Section 15E(s) of the Securities Exchange Act of 
1934 (15 U.S.C. 78o–7(s)) is amended— 
(1) in paragraph (2)(B), by inserting before the 
semicolon the following: ‘‘rated by the nationally rec-
ognized statistical rating agency’’; and 
(2) in paragraph (3)— 
(A) in subparagraph (A)(ix), by inserting 
before the period the following: ‘‘, except that 
the Commission may not require the inclusion 
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of references to statutory or regulatory require-
ments or statutory provision headings or enu-
merators for any specific disclosure’’; 
(B) in subparagraph (B)(iv), by inserting 
before the period the following: ‘‘, except that 
the Commission may not require the inclusion 
of references to statutory or regulatory require-
ments or statutory provision headings or enu-
merators for any specific disclosure’’; and 
(C) by adding at the end the following: 
‘‘(C) NO MANDATE ON THE ORGANIZATION 
OF DISCLOSURES.—The Commission may not 
mandate the specific organization of the disclo-
sures required under this paragraph.’’. 
SEC. 853. REPEAL OF CERTAIN ATTESTATION REQUIRE-
MENTS RELATING TO CREDIT RATINGS. 
Section 15E of the Securities Exchange Act of 1934 
(15 U.S.C. 78o–7) is amended— 
(1) in subsection (c)(3)(B)— 
(A) in clause (i), by adding ‘‘and’’ at the 
end; 
(B) in clause (ii), by striking ‘‘; and’’ and 
inserting a period; and 
(C) by striking clause (iii); and 
(2) in subsection (q)(2)— 
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(A) in subparagraph (D), by adding ‘‘and’’ 
at the end; 
(B) in subparagraph (E), by striking ‘‘; 
and’’ and inserting a period; and 
(C) by striking subparagraph (F). 
SEC. 854. LOOK-BACK REVIEW BY NRSRO. 
Section 15E(h)(4)(A) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78o–7(h)(4)(A)) is amended— 
(1) by striking ‘‘Each nationally’’ and inserting 
the following: 
‘‘(i) IN GENERAL.—Each nationally’’; 
(2) by striking ‘‘underwriter’’ and inserting 
‘‘lead underwriter’’; 
(3) by striking ‘‘in any capacity’’; 
(4) by striking ‘‘during the 1-year period pre-
ceding the date an action was taken with respect to 
the credit rating’’; 
(5) by redesignating clauses (i) and (ii) as sub-
clauses (I) and (II), respectively, and adjusting the 
margin of such subclauses accordingly; 
(6) in subclause (I), as so redesignated, by in-
serting before the semicolon the following: ‘‘during 
the 1-year period preceding the departure of the em-
ployee from the nationally recognized statistical rat-
ing organization’’; and 
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(7) by adding at the end the following: 
‘‘(ii) MAINTENANCE OF RATINGS AC-
TIONS.—In the case of maintenance of rat-
ings actions, the requirement under clause 
(i) shall only apply to employees of a per-
son subject to a credit rating of the nation-
ally recognized statistical rating organiza-
tion or an issuer of a security or money 
market instrument subject to a credit rat-
ing of the nationally recognized statistical 
rating organization.’’. 
SEC. 855. APPROVAL OF CREDIT RATING PROCEDURES AND 
METHODOLOGIES. 
Section 15E(r)(1)(A) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78o–7(r)(1)(A)) is amended by insert-
ing ‘‘, or the Chief Credit Officer’’ after ‘‘performing a 
function similar to that of a board’’. 
SEC. 856. EXCEPTION FOR PROVIDING CERTAIN MATERIAL 
INFORMATION RELATING TO A CREDIT RAT-
ING. 
Section 15E(h)(3) of the Securities Exchange Act of 
1934 (15 U.S.C. 78o–7(h)(3)) is amended by adding at 
the end the following: 
‘‘(C) EXCEPTION FOR PROVIDING CERTAIN 
MATERIAL INFORMATION.—Rules issued under 
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this paragraph may not prohibit a person who 
participates in sales or marketing of a product 
or service of a nationally recognized statistical 
rating organization from providing material in-
formation, or information believed in good faith 
to be material, to the issuance or maintenance 
of a credit rating to a person who participates 
in determining or monitoring the credit rating, 
or developing or approving procedures or meth-
odologies used for determining the credit rating, 
so long as the information provided is not in-
tended to influence the determination of a cred-
it rating, or the procedures or methodologies 
used to determine credit ratings.’’. 
SEC. 857. REPEALS. 
(a) REPEALS.—The following provisions of title IX 
of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act are repealed, and the provisions of law 
amended or repealed by such sections are restored or re-
vived as if such sections had not been enacted: 
(1) Section 912. 
(2) Section 914. 
(3) Section 917. 
(4) Section 918. 
(5) Section 919A. 
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(6) Section 919B. 
(7) Section 919C. 
(8) Section 921. 
(9) Section 929T. 
(10) Section 929X. 
(11) Section 929Y. 
(12) Section 929Z. 
(13) Section 931. 
(14) Section 933. 
(15) Section 937. 
(16) Section 939B. 
(17) Section 939C. 
(18) Section 939D. 
(19) Section 939E. 
(20) Section 939F. 
(21) Section 939G. 
(22) Section 939H. 
(23) Section 946. 
(24) Subsection (b) of section 953. 
(25) Section 955. 
(26) Section 956. 
(27) Section 964. 
(28) Section 965. 
(29) Section 968. 
(30) Section 971. 
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(31) Section 972. 
(32) Section 976. 
(33) Section 977. 
(34) Section 978. 
(35) Section 984. 
(36) Section 989. 
(37) Section 989A. 
(38) Section 989F. 
(39) Subsection (b) of section 989G. 
(40) Section 989I. 
(b) CONFORMING AMENDMENTS.—The Dodd-Frank 
Wall Street Reform and Consumer Protection Act (12 
U.S.C. 5301) is amended— 
(1) in the table of contents in section 1(b), by 
striking the items relating to the sections described 
under paragraphs (1) through (23), (25) through 
(38), and (40) of subsection (a); 
(2) in section 953, by striking ‘‘(a) DISCLO-
SURE OF PAY VERSUS PERFORMANCE.—’’; and 
(3) in section 989G, by striking ‘‘(a) EXEMP-
TION.—’’. 
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SEC. 858. EXEMPTION OF AND REPORTING BY PRIVATE EQ-
UITY FUND ADVISERS. 
Section 203 of the Investment Advisers Act of 1940 
(15 U.S.C. 80b–3) is amended by adding at the end the 
following: 
‘‘(o) EXEMPTION OF AND REPORTING BY PRIVATE 
EQUITY FUND ADVISERS.— 
‘‘(1) IN GENERAL.—Except as provided in this 
subsection, no investment adviser shall be subject to 
the registration or reporting requirements of this 
title with respect to the provision of investment ad-
vice relating to a private equity fund. 
‘‘(2) MAINTENANCE OF RECORDS AND ACCESS 
BY COMMISSION.—Not later than 6 months after the 
date of enactment of this subsection, the Commis-
sion shall issue final rules— 
‘‘(A) to require investment advisers de-
scribed in paragraph (1) to maintain such 
records and provide to the Commission such an-
nual or other reports as the Commission, taking 
into account fund size, governance, investment 
strategy, risk, and other factors, determines 
necessary and appropriate in the public interest 
and for the protection of investors; and 
‘‘(B) to define the term ‘private equity 
fund’ for purposes of this subsection.’’. 
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SEC. 859. RECORDS AND REPORTS OF PRIVATE FUNDS. 
The Investment Advisers Act of 1940 (15 U.S.C. 
80b–1 et seq.) is amended— 
(1) in section 204(b)— 
(A) in paragraph (1)— 
(i) in subparagraph (A), by striking 
‘‘investors,’’ and all that follows and in-
serting ‘‘investors.’’; 
(ii) by striking subparagraph (B); and 
(iii) by striking ‘‘this title—’’ and all 
that follows through ‘‘to maintain’’ and in-
serting ‘‘this title to maintain’’; 
(B) in paragraph (3)(H)— 
(i) by striking ‘‘, in consultation with 
the Council,’’; and 
(ii) by striking ‘‘or for the assessment 
of systemic risk’’; 
(C) in paragraph (4), by striking ‘‘, or for 
the assessment of systemic risk’’; 
(D) in paragraph (5), by striking ‘‘or for 
the assessment of systemic risk’’; 
(E) in paragraph (6)(A)(ii), by striking ‘‘, 
or for the assessment of systemic risk’’; 
(F) by striking paragraph (7) and redesig-
nating paragraphs (8) through (11) as para-
graphs (7) through (10), respectively; and 
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(G) in paragraph (8) (as so redesignated), 
by striking ‘‘paragraph (8)’’ and inserting 
‘‘paragraph (7)’’; and 
(2) in section 211(e)— 
(A) by striking ‘‘after consultation with the 
Council but’’; and 
(B) by striking ‘‘subsection 204(b)’’ and 
inserting ‘‘section 204(b)’’. 
SEC. 860. DEFINITION OF ACCREDITED INVESTOR. 
(a) IN GENERAL.—Section 2(a)(15) of the Securities 
Act of 1933 (15 U.S.C. 77b(a)(15)) is amended— 
(1) by redesignating clauses (i) and (ii) as sub-
paragraphs (A) and (G), respectively; and 
(2) in subparagraph (A) (as so redesignated), 
by striking ‘‘; or’’ at the end and inserting a semi-
colon, and inserting after such subparagraph the fol-
lowing: 
‘‘(B) any natural person whose individual 
net worth, or joint net worth with that person’s 
spouse, exceeds $1,000,000 (which amount, 
along with the amounts set forth in subpara-
graph (C), shall be adjusted for inflation by the 
Commission every 5 years to the nearest 
$10,000 to reflect the change in the Consumer 
Price Index for All Urban Consumers published 
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by the Bureau of Labor Statistics) where, for 
purposes of calculating net worth under this 
subparagraph— 
‘‘(i) the person’s primary residence 
shall not be included as an asset; 
‘‘(ii) indebtedness that is secured by 
the person’s primary residence, up to the 
estimated fair market value of the primary 
residence at the time of the sale of securi-
ties, shall not be included as a liability (ex-
cept that if the amount of such indebted-
ness outstanding at the time of sale of se-
curities exceeds the amount outstanding 60 
days before such time, other than as a re-
sult of the acquisition of the primary resi-
dence, the amount of such excess shall be 
included as a liability); and 
‘‘(iii) indebtedness that is secured by 
the person’s primary residence in excess of 
the estimated fair market value of the pri-
mary residence at the time of the sale of 
securities shall be included as a liability; 
‘‘(C) any natural person who had an indi-
vidual income in excess of $200,000 in each of 
the 2 most recent years or joint income with 
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that person’s spouse in excess of $300,000 in 
each of those years and has a reasonable expec-
tation of reaching the same income level in the 
current year; 
‘‘(D) any natural person who, by reason of 
their net worth or income, is an accredited in-
vestor under section 230.215 of title 17, Code 
of Federal Regulations (as in effect on the day 
before the date of enactment of this subpara-
graph); 
‘‘(E) any natural person who is currently 
licensed or registered as a broker or investment 
adviser by the Commission, the Financial In-
dustry Regulatory Authority, or an equivalent 
self-regulatory organization (as defined in sec-
tion 3(a)(26) of the Securities Exchange Act of 
1934), or the securities division of a State or 
the equivalent State division responsible for li-
censing or registration of individuals in connec-
tion with securities activities; 
‘‘(F) any natural person the Commission 
determines, by regulation, to have demonstrable 
education or job experience to qualify such per-
son as having professional knowledge of a sub-
ject related to a particular investment, and 
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whose education or job experience is verified by 
the Financial Industry Regulatory Authority or 
an equivalent self-regulatory organization (as 
defined in section 3(a)(26) of the Securities Ex-
change Act of 1934); or’’. 
(b) REPEAL.—Section 413 of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act (Public Law 
111–203) is hereby repealed. 
SEC. 861. REPEAL OF CERTAIN PROVISIONS REQUIRING A 
STUDY AND REPORT TO CONGRESS. 
The following provisions of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act are repealed: 
(1) Section 412. 
(2) Section 415. 
(3) Section 416. 
(4) Section 417. 
SEC. 862. REPEAL. 
(a) REPEAL.—The following sections of title XV of 
the Dodd-Frank Wall Street Reform and Consumer Pro-
tection Act are repealed, and the provisions of law amend-
ed or repealed by such sections are restored or revived as 
if such sections had not been enacted: 
(1) Section 1502. 
(2) Section 1503. 
(3) Section 1504. 
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(4) Section 1505. 
(5) Section 1506. 
(b) CLERICAL AMENDMENT.—The table of contents 
in section 1(b) of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act is amended by striking the items 
relating to sections 1502, 1503, 1504, 1505, and 1506. 
Subtitle C—Harmonization of 
Derivatives Rules 
SEC. 871. COMMISSIONS REVIEW AND HARMONIZATION OF 
RULES RELATING TO THE REGULATION OF 
OVER-THE-COUNTER SWAPS MARKETS. 
The Securities and Exchange Commission and the 
Commodity Futures Trading Commission shall review 
each rule, order, and interpretive guidance issued by either 
such Commission pursuant to title VII of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act (15 
U.S.C. 8301 et seq.) and, where the Commissions find in-
consistencies in any such rules, orders, or interpretive 
guidance, shall jointly issue new rules, orders, or interpre-
tive guidance to resolve such inconsistencies. 
SEC. 872. TREATMENT OF TRANSACTIONS BETWEEN AF-
FILIATES. 
(a) COMMODITY EXCHANGE ACT.—Section 1a(47) of 
the Commodity Exchange Act (7 U.S.C. 1a(47)) is amend-
ed by adding at the end the following: 
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‘‘(G) TREATMENT OF SWAP TRANSACTIONS 
BETWEEN AFFILIATES.— 
‘‘(i) 
EXEMPTION
FROM
SWAP 
RULES.—Except as provided under clause 
(ii), the Commission may not regulate a 
swap under this Act if all of the following 
apply to such swap: 
‘‘(I) 
AFFILIATION.—One 
counterparty, directly or indirectly, 
holds a majority ownership interest in 
the other counterparty, or a third 
party, directly or indirectly, holds a 
majority ownership interest in both 
counterparties. 
‘‘(II) FINANCIAL STATEMENTS.— 
The affiliated counterparty that holds 
the majority interest in the other 
counterparty or the third party that, 
directly or indirectly, holds the major-
ity interests in both affiliated counter-
parties, reports its financial state-
ments on a consolidated basis under 
generally accepted accounting prin-
ciples or International Financial Re-
porting Standards, or other similar 
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standards, and the financial state-
ments include the financial results of 
the 
majority-owned 
affiliated 
counterparty or counterparties. 
‘‘(ii) REQUIREMENTS FOR EXEMPTED 
SWAPS.—With respect to a swap described 
under clause (i): 
‘‘(I) 
REPORTING
REQUIRE-
MENT.—If at least one counterparty is 
a swap dealer or major swap partici-
pant, that counterparty shall report 
the swap pursuant to section 4r, with-
in such time period as the Commis-
sion may by rule or regulation pre-
scribe— 
‘‘(aa) to a swap data reposi-
tory; or 
‘‘(bb) if there is no swap 
data repository that would accept 
the agreement, contract or trans-
action, to the Commission. 
‘‘(II) RISK
MANAGEMENT
RE-
QUIREMENT.—If 
at 
least 
one 
counterparty is a swap dealer or 
major swap participant, the swap 
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shall be subject to a centralized risk 
management program pursuant to 
section 4s(j) that is reasonably de-
signed to monitor and to manage the 
risks associated with the swap. 
‘‘(III) ANTI-EVASION
REQUIRE-
MENT.—The swap shall not be struc-
tured to evade the Dodd-Frank Wall 
Street Reform and Consumer Protec-
tion Act in violation of any rule pro-
mulgated by the Commission pursuant 
to section 721(c) of such Act.’’. 
(b) SECURITIES EXCHANGE ACT OF 1934.—Section 
3(a)(68) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a)(68)) is amended by adding at the end the 
following: 
‘‘(F) TREATMENT
OF
SECURITY-BASED 
SWAP TRANSACTIONS BETWEEN AFFILIATES.— 
‘‘(i) EXEMPTION
FROM
SECURITY- 
BASED SWAP RULES.—Except as provided 
under clause (ii), the Commission may not 
regulate a security-based swap under this 
Act if all of the following apply to such se-
curity-based swap: 
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‘‘(I) 
AFFILIATION.—One 
counterparty, directly or indirectly, 
holds a majority ownership interest in 
the other counterparty, or a third 
party, directly or indirectly, holds a 
majority ownership interest in both 
counterparties. 
‘‘(II) FINANCIAL STATEMENTS.— 
The affiliated counterparty that holds 
the majority interest in the other 
counterparty or the third party that, 
directly or indirectly, holds the major-
ity interests in both affiliated counter-
parties, reports its financial state-
ments on a consolidated basis under 
generally accepted accounting prin-
ciples or International Financial Re-
porting Standards, or other similar 
standards, and the financial state-
ments include the financial results of 
the 
majority-owned 
affiliated 
counterparty or counterparties. 
‘‘(ii) REQUIREMENTS FOR EXEMPTED 
SECURITY-BASED SWAPS.—With respect to 
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a security-based swap described under 
clause (i): 
‘‘(I) 
REPORTING
REQUIRE-
MENT.—If at least one counterparty is 
a security-based swap dealer or major 
security-based swap participant, that 
counterparty shall report the security- 
based swap pursuant to section 13A, 
within such time period as the Com-
mission may by rule or regulation pre-
scribe— 
‘‘(aa) to a security-based 
swap data repository; or 
‘‘(bb) if there is no security- 
based swap data repository that 
would accept the agreement, con-
tract or transaction, to the Com-
mission. 
‘‘(II) RISK
MANAGEMENT
RE-
QUIREMENT.—If 
at 
least 
one 
counterparty is a security-based swap 
dealer or major security-based swap 
participant, the security-based swap 
shall be subject to a centralized risk 
management program pursuant to 
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section 15F(j) that is reasonably de-
signed to monitor and to manage the 
risks associated with the security- 
based swap. 
‘‘(III) ANTI-EVASION
REQUIRE-
MENT.—The security-based swap shall 
not be structured to evade the Dodd- 
Frank Wall Street Reform and Con-
sumer Protection Act in violation of 
any rule promulgated by the Commis-
sion pursuant to section 761(b)(3) of 
such Act.’’. 
TITLE 
IX—REPEAL 
OF 
THE 
VOLCKER RULE AND OTHER 
PROVISIONS 
SEC. 901. REPEALS. 
(a) IN GENERAL.—The following sections of title VI 
of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act are repealed, and the provisions of law 
amended or repealed by such sections are restored or re-
vived as if such sections had not been enacted: 
(1) Section 603. 
(2) Section 618. 
(3) Section 619. 
(4) Section 620. 
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(5) Section 621. 
(b) CLERICAL AMENDMENT.—The table of contents 
under section 1(b) of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act is amended by striking the 
items relating to sections 603, 618, 619, 620, and 621. 
TITLE X—FED OVERSIGHT 
REFORM AND MODERNIZATION 
SEC. 1001. REQUIREMENTS FOR POLICY RULES OF THE 
FEDERAL OPEN MARKET COMMITTEE. 
The Federal Reserve Act (12 U.S.C. 221 et seq.) is 
amended by inserting after section 2B the following new 
section: 
‘‘SEC. 2C. DIRECTIVE POLICY RULES OF THE FEDERAL 
OPEN MARKET COMMITTEE. 
‘‘(a) DEFINITIONS.—In this section the following 
definitions shall apply: 
‘‘(1) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘appropriate congressional com-
mittees’ means the Committee on Financial Services 
of the House of Representatives and the Committee 
on Banking, Housing, and Urban Affairs of the Sen-
ate. 
‘‘(2) DIRECTIVE POLICY RULE.—The term ‘Di-
rective Policy Rule’ means a policy rule developed by 
the Federal Open Market Committee that meets the 
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requirements of subsection (c) and that provides the 
basis for the Open Market Operations Directive. 
‘‘(3) GDP.—The term ‘GDP’ means the gross 
domestic product of the United States as computed 
and published by the Department of Commerce. 
‘‘(4) INTERMEDIATE POLICY INPUT.—The term 
‘Intermediate Policy Input’— 
‘‘(A) may include any variable determined 
by the Federal Open Market Committee as a 
necessary input to guide open-market oper-
ations; 
‘‘(B) shall include an estimate of, and the 
method of calculation for, the current rate of 
inflation or current inflation expectations; and 
‘‘(C) shall include, specifying whether the 
variable or estimate is historical, current, or a 
forecast and the method of calculation, at least 
one of— 
‘‘(i) an estimate of real GDP, nominal 
GDP, or potential GDP; 
‘‘(ii) an estimate of the monetary ag-
gregate compiled by the Board of Gov-
ernors of the Federal Reserve System and 
Federal reserve banks; or 
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‘‘(iii) an interactive variable or a net 
estimate composed of the estimates de-
scribed in clauses (i) and (ii). 
‘‘(5) LEGISLATIVE DAY.—The term ‘legislative 
day’ means a day on which either House of Congress 
is in session. 
‘‘(6) OPEN MARKET OPERATIONS DIRECTIVE.— 
The term ‘Open Market Operations Directive’ means 
an order to achieve a specified Policy Instrument 
Target provided to the Federal Reserve Bank of 
New York by the Federal Open Market Committee 
pursuant to powers authorized under section 14 of 
this Act that guide open-market operations. 
‘‘(7) POLICY INSTRUMENT.—The term ‘Policy 
Instrument’ means— 
‘‘(A) the nominal Federal funds rate; 
‘‘(B) the nominal rate of interest paid on 
nonborrowed reserves; or 
‘‘(C) the discount window primary credit 
interest rate most recently published on the 
Federal Reserve Statistical Release on selected 
interest rates (daily or weekly), commonly re-
ferred to as the H.15 release. 
‘‘(8) POLICY INSTRUMENT TARGET.—The term 
‘Policy Instrument Target’ means the target for the 
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Policy Instrument specified in the Open Market Op-
erations Directive. 
‘‘(9) REFERENCE
POLICY
RULE.—The term 
‘Reference Policy Rule’ means a calculation of the 
nominal Federal funds rate as equal to the sum of 
the following: 
‘‘(A) The rate of inflation over the pre-
vious four quarters. 
‘‘(B) One-half of the percentage deviation 
of the real GDP from an estimate of potential 
GDP. 
‘‘(C) One-half of the difference between the 
rate of inflation over the previous four quarters 
and two percent. 
‘‘(D) Two percent. 
‘‘(b) SUBMITTING A DIRECTIVE POLICY RULE.—Not 
later than 48 hours after the end of a meeting of the Fed-
eral Open Market Committee, the Chairman of the Fed-
eral Open Market Committee shall submit to the appro-
priate congressional committees and the Comptroller Gen-
eral of the United States a Directive Policy Rule and a 
statement that identifies the members of the Federal Open 
Market Committee who voted in favor of the Directive Pol-
icy Rule. 
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‘‘(c) REQUIREMENTS
FOR
A DIRECTIVE POLICY 
RULE.—A Directive Policy Rule shall— 
‘‘(1) identify the Policy Instrument the Direc-
tive Policy Rule is designed to target; 
‘‘(2) describe the strategy or rule of the Federal 
Open Market Committee for the systematic quan-
titative adjustment of the Policy Instrument Target 
to respond to a change in the Intermediate Policy 
Inputs; 
‘‘(3) include a function that comprehensively 
models the interactive relationship between the In-
termediate Policy Inputs; 
‘‘(4) include the coefficients of the Directive 
Policy Rule that generate the current Policy Instru-
ment Target and a range of predicted future values 
for the Policy Instrument Target if changes occur in 
any Intermediate Policy Input; 
‘‘(5) describe the procedure for adjusting the 
supply of bank reserves to achieve the Policy Instru-
ment Target; 
‘‘(6) include a statement as to whether the Di-
rective Policy Rule substantially conforms to the 
Reference Policy Rule and, if applicable— 
‘‘(A) an explanation of the extent to which 
it departs from the Reference Policy Rule; 
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‘‘(B) a detailed justification for that depar-
ture; and 
‘‘(C) a description of the circumstances 
under which the Directive Policy Rule may be 
amended in the future; 
‘‘(7) include a certification that the Directive 
Policy Rule is expected to support the economy in 
achieving stable prices and maximum natural em-
ployment over the long term; 
‘‘(8) include a calculation that describes with 
mathematical precision the expected annual inflation 
rate over a 5-year period; and 
‘‘(9) include a plan to use the most accurate 
data, subject to all historical revisions, for inputs 
into the Directive Policy Rule and the Reference 
Policy Rule. 
‘‘(d) GAO REPORT.—The Comptroller General of the 
United States shall compare the Directive Policy Rule sub-
mitted under subsection (b) with the rule that was most 
recently submitted to determine whether the Directive Pol-
icy Rule has materially changed. If the Directive Policy 
Rule has materially changed, the Comptroller General 
shall, not later than 7 days after each meeting of the Fed-
eral Open Market Committee, prepare and submit a com-
pliance report to the appropriate congressional committees 
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specifying whether the Directive Policy Rule submitted 
after that meeting and the Federal Open Market Com-
mittee are in compliance with this section. 
‘‘(e) CHANGING MARKET CONDITIONS.— 
‘‘(1) RULE
OF
CONSTRUCTION.—Nothing in 
this Act shall be construed to require that the plans 
with respect to the systematic quantitative adjust-
ment of the Policy Instrument Target described 
under subsection (c)(2) be implemented if the Fed-
eral Open Market Committee determines that such 
plans cannot or should not be achieved due to 
changing market conditions. 
‘‘(2) GAO APPROVAL OF UPDATE.—Upon deter-
mining that plans described in paragraph (1) cannot 
or should not be achieved, the Federal Open Market 
Committee shall submit an explanation for that de-
termination and an updated version of the Directive 
Policy Rule to the Comptroller General of the 
United States and the appropriate congressional 
committees not later than 48 hours after making the 
determination. The Comptroller General shall, not 
later than 48 hours after receiving such updated 
version, prepare and submit to the appropriate con-
gressional committees a compliance report deter-
mining whether such updated version and the Fed-
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eral Open Market Committee are in compliance with 
this section. 
‘‘(f) DIRECTIVE POLICY RULE AND FEDERAL OPEN 
MARKET COMMITTEE NOT IN COMPLIANCE.— 
‘‘(1) IN GENERAL.—If the Comptroller General 
of the United States determines that the Directive 
Policy Rule and the Federal Open Market Com-
mittee are not in compliance with this section in the 
report submitted pursuant to subsection (d), or that 
the updated version of the Directive Policy Rule and 
the Federal Open Market Committee are not in com-
pliance with this section in the report submitted pur-
suant to subsection (e)(2), the Chairman of the 
Board of Governors of the Federal Reserve System 
shall, if requested by the chairman of either of the 
appropriate congressional committees, not later than 
7 legislative days after such request, testify before 
such committee as to why the Directive Policy Rule, 
the updated version, or the Federal Open Market 
Committee is not in compliance. 
‘‘(2) GAO AUDIT.—Notwithstanding subsection 
(b) of section 714 of title 31, United States Code, 
upon submitting a report of noncompliance pursuant 
to subsection (d) or subsection (e)(2) and after the 
period of 7 legislative days described in paragraph 
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(1), the Comptroller General shall audit the conduct 
of monetary policy by the Board of Governors of the 
Federal Reserve System and the Federal Open Mar-
ket Committee upon request of the appropriate con-
gressional committee. Such committee may specify 
the parameters of such audit. 
‘‘(g) CONGRESSIONAL HEARINGS.—The Chairman of 
the Board of Governors of the Federal Reserve System 
shall, if requested by the chairman of either of the appro-
priate congressional committees and not later than 7 legis-
lative days after such request, appear before such com-
mittee to explain any change to the Directive Policy 
Rule.’’. 
SEC. 1002. FEDERAL OPEN MARKET COMMITTEE BLACK-
OUT PERIOD. 
Section 12A of the Federal Reserve Act (12 U.S.C. 
263) is amended by adding at the end the following new 
subsection: 
‘‘(d) BLACKOUT PERIOD.— 
‘‘(1) IN GENERAL.—During a blackout period, 
the only public communications that may be made 
by members and staff of the Committee with respect 
to macroeconomic or financial developments or about 
current or prospective monetary policy issues are the 
following: 
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‘‘(A) The dissemination of published data, 
surveys, and reports that have been cleared for 
publication by the Board of Governors of the 
Federal Reserve System. 
‘‘(B) Answers to technical questions spe-
cific to a data release. 
‘‘(C) Communications with respect to the 
prudential or supervisory functions of the 
Board of Governors. 
‘‘(2) BLACKOUT PERIOD DEFINED.—For pur-
poses of this subsection, and with respect to a meet-
ing of the Committee described under subsection (a), 
the term ‘blackout period’ means the time period 
that— 
‘‘(A) begins immediately after midnight on 
the day that is one week prior to the date on 
which such meeting takes place; and 
‘‘(B) ends at midnight on the day after the 
date on which such meeting takes place. 
‘‘(3) EXEMPTION
FOR
CHAIRMAN
OF
THE 
BOARD
OF
GOVERNORS.—Nothing in this section 
shall prohibit the Chairman of the Board of Gov-
ernors of the Federal Reserve System from partici-
pating in or issuing public communications.’’. 
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SEC. 1003. PUBLIC TRANSCRIPTS OF FOMC MEETINGS. 
Section 12A of the Federal Reserve Act (12 U.S.C. 
263), as amended by section 1002, is further amended by 
adding at the end the following: 
‘‘(e) PUBLIC TRANSCRIPTS
OF MEETINGS.—The 
Committee shall— 
‘‘(1) record all meetings of the Committee; and 
‘‘(2) make the full transcript of such meetings 
available to the public.’’. 
SEC. 1004. MEMBERSHIP OF FEDERAL OPEN MARKET COM-
MITTEE. 
Section 12A(a) of the Federal Reserve Act (12 
U.S.C. 263(a)) is amended— 
(1) in the first sentence, by striking ‘‘five’’ and 
inserting ‘‘six’’; 
(2) in the second sentence, by striking ‘‘One by 
the board of directors’’ and all that follows through 
the period at the end and inserting the following: 
‘‘One by the boards of directors of the Federal Re-
serve Banks of New York and Boston; one by the 
boards of directors of the Federal Reserve Banks of 
Philadelphia and Cleveland; one by the boards of di-
rectors of the Federal Reserve Banks of Richmond 
and Atlanta; one by the boards of directors of the 
Federal Reserve Banks of Chicago and St. Louis; 
one by the boards of directors of the Federal Re-
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serve Banks of Minneapolis and Kansas City; and 
one by the boards of directors of the Federal Re-
serve Banks of Dallas and San Francisco.’’; and 
(3) by inserting after the second sentence the 
following: ‘‘In odd numbered calendar years, one 
representative shall be elected from each of the Fed-
eral Reserve Banks of Boston, Philadelphia, Rich-
mond, Chicago, Minneapolis, and Dallas. In even- 
numbered calendar years, one representative shall be 
elected from each of the Federal Reserve Banks of 
New York, Cleveland, Atlanta, St. Louis, Kansas 
City, and San Francisco.’’. 
SEC. 1005. FREQUENCY OF TESTIMONY OF THE CHAIRMAN 
OF THE BOARD OF GOVERNORS OF THE FED-
ERAL RESERVE SYSTEM TO CONGRESS. 
(a) IN GENERAL.—Section 2B of the Federal Reserve 
Act (12 U.S.C. 225b) is amended— 
(1) by striking ‘‘semi-annual’’ each place it ap-
pears and inserting ‘‘quarterly’’; and 
(2) in subsection (a)(2)— 
(A) by inserting ‘‘and October 20’’ after 
‘‘July 20’’ each place it appears; and 
(B) by inserting ‘‘and May 20’’ after 
‘‘February 20’’ each place it appears. 
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(b) CONFORMING AMENDMENT.—Paragraph (12) of 
section 10 of the Federal Reserve Act (12 U.S.C. 
247b(12)) is amended by striking ‘‘semi-annual’’ and in-
serting ‘‘quarterly’’. 
SEC. 1006. VICE CHAIRMAN FOR SUPERVISION REPORT RE-
QUIREMENT. 
Paragraph (12) of section 10 of the Federal Reserve 
Act (12 U.S.C. 247(b)) is amended— 
(1) by redesignating such paragraph as para-
graph (11); and 
(2) in such paragraph, by adding at the end the 
following: ‘‘In each such appearance, the Vice Chair-
man for Supervision shall provide written testimony 
that includes the status of all pending and antici-
pated rulemakings that are being made by the 
Board of Governors of the Federal Reserve System. 
If, at the time of any appearance described in this 
paragraph, the position of Vice Chairman for Super-
vision is vacant, the Vice Chairman for the Board of 
Governors of the Federal Reserve System (who has 
the responsibility to serve in the absence of the 
Chairman) shall appear instead and provide the re-
quired written testimony. If, at the time of any ap-
pearance described in this paragraph, both Vice 
Chairman positions are vacant, the Chairman of the 
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Board of Governors of the Federal Reserve System 
shall appear instead and provide the required writ-
ten testimony.’’. 
SEC. 1007. SALARIES, FINANCIAL DISCLOSURES, AND OF-
FICE STAFF OF THE BOARD OF GOVERNORS 
OF THE FEDERAL RESERVE SYSTEM. 
(a) IN GENERAL.—Section 11 of the Federal Reserve 
Act (12 U.S.C. 248) is amended— 
(1) by redesignating the second subsection (s) 
(relating to ‘‘Assessments, Fees, and Other Charges 
for Certain Companies’’) as subsection (t); and 
(2) by inserting before subsection (w), as added 
by section 371(a), the following new subsections: 
‘‘(u) ETHICS STANDARDS FOR MEMBERS AND EM-
PLOYEES.— 
‘‘(1) PROHIBITED AND RESTRICTED FINANCIAL 
INTERESTS AND TRANSACTIONS.—The members and 
employees of the Board of Governors of the Federal 
Reserve System shall be subject to the provisions 
under section 4401.102 of title 5, Code of Federal 
Regulations, to the same extent as such provisions 
apply to an employee of the Securities and Exchange 
Commission. 
‘‘(2) TREATMENT
OF
BROKERAGE
ACCOUNTS 
AND AVAILABILITY OF ACCOUNT STATEMENTS.—The 
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members and employees of the Board of Governors 
of the Federal Reserve System shall— 
‘‘(A) disclose all brokerage accounts that 
the member or employee maintains, as well as 
any accounts in which the member or employee 
controls trading or has a financial interest (in-
cluding managed accounts, trust accounts, in-
vestment club accounts, and accounts of 
spouses or minor children who live with the 
member or employee); and 
‘‘(B) with respect to any securities account 
that the member or employee is required to dis-
close to the Board of Governors, authorize the 
brokers and dealers of such account to send du-
plicate account statements directly to Board of 
Governors. 
‘‘(3) PROHIBITIONS RELATED TO OUTSIDE EM-
PLOYMENT AND ACTIVITIES.—The members and em-
ployees of the Board of Governors of the Federal 
Reserve System shall be subject to the prohibitions 
related to outside employment and activities de-
scribed under section 4401.103(c) of title 5, Code of 
Federal Regulations, to the same extent as such pro-
hibitions apply to an employee of the Securities and 
Exchange Commission. 
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‘‘(4) ADDITIONAL
ETHICS
STANDARDS.—The 
members and employees of the Board of Governors 
of the Federal Reserve System shall be subject to— 
‘‘(A) the employee responsibilities and con-
duct regulations of the Office of Personnel 
Management under part 735 of title 5, Code of 
Federal Regulations; 
‘‘(B) the canons of ethics contained in sub-
part C of part 200 of title 17, Code of Federal 
Regulations, to the same extent as such subpart 
applies to the employees of the Securities and 
Exchange Commission; and 
‘‘(C) the regulations concerning the con-
duct of members and employees and former 
members and employees contained in subpart M 
of part 200 of title 17, Code of Federal Regula-
tions, to the same extent as such subpart ap-
plies to the employees of the Securities and Ex-
change Commission. 
‘‘(v) DISCLOSURE OF STAFF SALARIES AND FINAN-
CIAL INFORMATION.—The Board of Governors of the Fed-
eral Reserve System shall make publicly available, on the 
website of the Board of Governors, a searchable database 
that contains the names of all members, officers, and em-
ployees of the Board of Governors who receive an annual 
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salary in excess of the annual rate of basic pay for GS– 
15 of the General Schedule, and— 
‘‘(1) the yearly salary information for such indi-
viduals, along with any nonsalary compensation re-
ceived by such individuals; and 
‘‘(2) any financial disclosures required to be 
made by such individuals.’’. 
(b) OFFICE STAFF
FOR EACH MEMBER
OF
THE 
BOARD OF GOVERNORS.—Subsection (l) of section 11 of 
the Federal Reserve Act (12 U.S.C. 248) is amended by 
adding at the end the following: ‘‘Each member of the 
Board of Governors of the Federal Reserve System may 
employ, at a minimum, 2 individuals, with such individuals 
selected by such member and the salaries of such individ-
uals set by such member. A member may employ addi-
tional individuals as determined necessary by the Board 
of Governors.’’. 
SEC. 1008. AMENDMENTS TO POWERS OF THE BOARD OF 
GOVERNORS OF THE FEDERAL RESERVE SYS-
TEM. 
(a) IN GENERAL.—Section 13(3) of the Federal Re-
serve Act (12 U.S.C. 343(3)), as amended by section 
111(b)(3), is further amended— 
(1) in subparagraph (A)— 
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(A) by inserting ‘‘that pose a threat to the 
financial stability of the United States’’ after 
‘‘unusual and exigent circumstances’’; and 
(B) by inserting ‘‘and by the affirmative 
vote of not less than nine presidents of the Fed-
eral reserve banks’’ after ‘‘five members’’; 
(2) in subparagraph (B)— 
(A) in clause (i), by inserting at the end 
the following: ‘‘Federal reserve banks may not 
accept equity securities issued by the recipient 
of any loan or other financial assistance under 
this paragraph as collateral. Not later than 6 
months after the date of enactment of this sen-
tence, the Board shall, by rule, establish— 
‘‘(I) a method for determining 
the sufficiency of the collateral re-
quired under this paragraph; 
‘‘(II) acceptable classes of collat-
eral; 
‘‘(III) the amount of any dis-
count on the value of the collateral 
that the Federal reserve banks will 
apply for purposes of calculating the 
sufficiency of collateral under this 
paragraph; and 
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‘‘(IV) a method for obtaining 
independent appraisals of the value of 
collateral the Federal reserve banks 
receive.’’; and 
(B) in clause (ii)— 
(i) by striking the second sentence; 
and 
(ii) by inserting after the first sen-
tence the following: ‘‘A borrower shall not 
be eligible to borrow from any emergency 
lending program or facility unless the 
Board and all Federal banking regulators 
with jurisdiction over the borrower certify 
that, at the time the borrower initially bor-
rows under the program or facility, the 
borrower is not insolvent.’’; 
(3) by inserting ‘‘financial institution’’ before 
‘‘participant’’ each place such term appears; 
(4) in subparagraph (D)(i), by inserting ‘‘finan-
cial institution’’ before ‘‘participants’’; and 
(5) by adding at the end the following new sub-
paragraphs: 
‘‘(E) PENALTY RATE.— 
‘‘(i) IN GENERAL.—Not later than 6 
months after the date of enactment of this 
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subparagraph, the Board shall, with re-
spect to a recipient of any loan or other fi-
nancial assistance under this paragraph, 
establish by rule a minimum interest rate 
on the principal amount of any loan or 
other financial assistance. 
‘‘(ii) MINIMUM
INTEREST
RATE
DE-
FINED.—In this subparagraph, the term 
‘minimum interest rate’ shall mean the 
sum of— 
‘‘(I) the average of the secondary 
discount rate of all Federal Reserve 
banks over the most recent 90-day pe-
riod; and 
‘‘(II) the average of the dif-
ference between a distressed corporate 
bond yield index (as defined by rule of 
the Board) and a bond yield index of 
debt issued by the United States (as 
defined by rule of the Board) over the 
most recent 90-day period. 
‘‘(F) FINANCIAL
INSTITUTION
PARTICI-
PANT
DEFINED.—For purposes of this para-
graph, the term ‘financial institution partici-
pant’— 
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‘‘(i) means a company that is pre-
dominantly engaged in financial activities 
(as defined in section 102(a) of the Dodd- 
Frank Wall Street Reform and Consumer 
Protection Act (12 U.S.C. 5311(a))); and 
‘‘(ii) does not include an agency de-
scribed in subparagraph (W) of section 
5312(a)(2) of title 31, United States Code, 
or an entity controlled or sponsored by 
such an agency.’’. 
(b) 
CONFORMING
AMENDMENT.—Section 
11(r)(2)(A) of the Federal Reserve Act (12 U.S.C. 
248(r)(2)(A)) is amended— 
(1) in clause (ii)(IV), by striking ‘‘; and’’ and 
inserting a semicolon; 
(2) in clause (iii), by striking the period at the 
end and inserting ‘‘; and’’; and 
(3) by adding at the end the following new 
clause: 
‘‘(iv) the available members secure the affirma-
tive vote of not less than nine presidents of the Fed-
eral reserve banks.’’. 
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SEC. 1009. INTEREST RATES ON BALANCES MAINTAINED AT 
A FEDERAL RESERVE BANK BY DEPOSITORY 
INSTITUTIONS ESTABLISHED BY FEDERAL 
OPEN MARKET COMMITTEE. 
Subparagraph (A) of section 19(b)(12) of the Federal 
Reserve Act (12 U.S.C. 461(b)(12)(A)) is amended by in-
serting ‘‘established by the Federal Open Market Com-
mittee’’ after ‘‘rate or rates’’. 
SEC. 1010. AUDIT REFORM AND TRANSPARENCY FOR THE 
BOARD OF GOVERNORS OF THE FEDERAL RE-
SERVE SYSTEM. 
(a) IN GENERAL.—Notwithstanding section 714 of 
title 31, United States Code, or any other provision of law, 
the Comptroller General of the United States shall annu-
ally complete an audit of the Board of Governors of the 
Federal Reserve System and the Federal reserve banks 
under subsection (b) of such section 714 within 12 months 
after the date of the enactment of this Act. 
(b) REPORT.— 
(1) IN GENERAL.—Not later than 90 days after 
each audit required pursuant to subsection (a) is 
completed, the Comptroller General— 
(A) shall submit to Congress a report on 
such audit; and 
(B) shall make such report available to the 
Speaker of the House, the majority and minor-
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ity leaders of the House of Representatives, the 
majority and minority leaders of the Senate, the 
Chairman and Ranking Member of the com-
mittee and each subcommittee of jurisdiction in 
the House of Representatives and the Senate, 
and any other Member of Congress who re-
quests the report. 
(2) CONTENTS.—The report under paragraph 
(1) shall include a detailed description of the find-
ings and conclusion of the Comptroller General with 
respect to the audit that is the subject of the report, 
together with such recommendations for legislative 
or administrative action as the Comptroller General 
may determine to be appropriate. 
(c) REPEAL OF CERTAIN LIMITATIONS.—Subsection 
(b) of section 714 of title 31, United States Code, is 
amended by striking the second sentence. 
(d) TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) IN
GENERAL.—Section 714 of title 31, 
United States Code, is amended— 
(A) in subsection (d)(3), by striking ‘‘or 
(f)’’ each place such term appears; 
(B) in subsection (e), by striking ‘‘the 
third undesignated paragraph of section 13’’ 
and inserting ‘‘section 13(3)’’; and 
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(C) by striking subsection (f). 
(2) FEDERAL
RESERVE
ACT.—Subsection (s) 
(relating to ‘‘Federal Reserve Transparency and Re-
lease of Information’’) of section 11 of the Federal 
Reserve Act (12 U.S.C. 248) is amended— 
(A) in paragraph (4)(A), by striking ‘‘has 
the same meaning as in section 714(f)(1)(A) of 
title 31, United States Code’’ and inserting 
‘‘means a program or facility, including any 
special purpose vehicle or other entity estab-
lished by or on behalf of the Board of Gov-
ernors of the Federal Reserve System or a Fed-
eral reserve bank, authorized by the Board of 
Governors under section 13(3), that is not sub-
ject to audit under section 714(e) of title 31, 
United States Code’’; 
(B) in paragraph (6), by striking ‘‘or in 
section 714(f)(3)(C) of title 31, United States 
Code, the information described in paragraph 
(1) and information concerning the transactions 
described in section 714(f) of such title,’’ and 
inserting ‘‘the information described in para-
graph (1)’’; and 
(C) in paragraph (7), by striking ‘‘and sec-
tion 13(3)(C), section 714(f)(3)(C) of title 31, 
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United States Code, and’’ and inserting ‘‘, sec-
tion 13(3)(C), and’’. 
SEC. 1011. ESTABLISHMENT OF A CENTENNIAL MONETARY 
COMMISSION. 
(a) FINDINGS.—Congress finds the following: 
(1) The Constitution endows Congress with the 
power ‘‘to coin money, regulate the value thereof’’. 
(2) Following the financial crisis known as the 
Panic of 1907, Congress established the National 
Monetary Commission to provide recommendations 
for the reform of the financial and monetary systems 
of the United States. 
(3) Incorporating several of the recommenda-
tions of the National Monetary Commission, Con-
gress created the Federal Reserve System in 1913. 
As currently organized, the Federal Reserve System 
consists of the Board of Governors in Washington, 
District of Columbia, and the Federal reserve banks 
organized into 12 districts around the United States. 
The stockholders of the 12 Federal reserve banks in-
clude national and certain State-chartered commer-
cial banks, which operate on a fractional reserve 
basis. 
(4) Originally, Congress gave the Federal Re-
serve System a monetary mandate to provide an 
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elastic currency, within the context of a gold stand-
ard, in response to seasonal fluctuations in the de-
mand for currency. 
(5) Congress also gave the Federal Reserve 
System a financial stability mandate to serve as the 
lender of last resort to solvent but illiquid banks 
during a financial crisis. 
(6) In 1977, Congress changed the monetary 
mandate of the Federal Reserve System to a dual 
mandate for maximum employment and stable 
prices. 
(7) Empirical studies and historical evidence, 
both within the United States and in other coun-
tries, demonstrate that price stability is desirable be-
cause both inflation and deflation damage the econ-
omy. 
(8) The economic challenge of recent years— 
most notably the bursting of the housing bubble, the 
financial crisis of 2008, and the ensuing anemic re-
covery—have occurred at great cost in terms of lost 
jobs and output. 
(9) Policymakers are reexamining the structure 
and functioning of financial institutions and markets 
to determine what, if any, changes need to be made 
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to place the financial system on a stronger, more 
sustainable path going forward. 
(10) The Federal Reserve System has taken ex-
traordinary actions in response to the recent eco-
nomic challenges. 
(11) The Federal Open Market Committee has 
engaged in multiple rounds of quantitative easing, 
providing unprecedented liquidity to financial mar-
kets, while committing to holding short-term interest 
rates low for a seemingly indefinite period, and pur-
suing a policy of credit allocation by purchasing 
Federal agency debt and mortgage-backed securities. 
(12) In the wake of the recent extraordinary ac-
tions of the Federal Reserve System, Congress—con-
sistent with its constitutional responsibilities and as 
it has done periodically throughout the history of the 
United States—has once again renewed its examina-
tion of monetary policy. 
(13) Central in such examination has been a re-
newed look at what is the most proper mandate for 
the Federal Reserve System to conduct monetary 
policy in the 21st century. 
(b) ESTABLISHMENT OF A CENTENNIAL MONETARY 
COMMISSION.—There is established a commission to be 
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known as the ‘‘Centennial Monetary Commission’’ (in this 
section referred to as the ‘‘Commission’’). 
(c) STUDY AND REPORT ON MONETARY POLICY.— 
(1) STUDY.—The Commission shall— 
(A) examine how United States monetary 
policy since the creation of the Board of Gov-
ernors of the Federal Reserve System in 1913 
has affected the performance of the United 
States economy in terms of output, employ-
ment, prices, and financial stability over time; 
(B) evaluate various operational regimes 
under which the Board of Governors of the 
Federal Reserve System and the Federal Open 
Market Committee may conduct monetary pol-
icy in terms achieving the maximum sustainable 
level of output and employment and price sta-
bility over the long term, including— 
(i) discretion in determining monetary 
policy without an operational regime; 
(ii) price level targeting; 
(iii) inflation rate targeting; 
(iv) nominal gross domestic product 
targeting (both level and growth rate); 
(v) the use of monetary policy rules; 
and 
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(vi) the gold standard; 
(C) evaluate the use of macro-prudential 
supervision and regulation as a tool of mone-
tary policy in terms of achieving the maximum 
sustainable level of output and employment and 
price stability over the long term; 
(D) evaluate the use of the lender-of-last- 
resort function of the Board of Governors of 
the Federal Reserve System as a tool of mone-
tary policy in terms of achieving the maximum 
sustainable level of output and employment and 
price stability over the long term; 
(E) recommend a course for United States 
monetary policy going forward, including— 
(i) the legislative mandate; 
(ii) the operational regime; 
(iii) the securities used in open-mar-
ket operations; and 
(iv) transparency issues; and 
(F) consider the effects of the GDP output 
and employment targets of the ‘‘dual mandate’’ 
(both from the creation of the dual mandate in 
1977 until the present time and estimates of 
the future effect of the dual mandate ) on— 
(i) United States economic activity; 
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(ii) actions of the Board of Governors 
of the Federal Reserve System; and 
(iii) Federal debt. 
(2) REPORT.—Not later than 1 year after the 
date of the enactment of this section, the Commis-
sion shall submit to Congress and make publicly 
available a report containing a statement of the find-
ings and conclusions of the Commission in carrying 
out the study under paragraph (1), together with 
the recommendations the Commission considers ap-
propriate. In making such report, the Commission 
shall specifically report on the considerations re-
quired under paragraph (1)(F). 
(d) MEMBERSHIP.— 
(1) NUMBER AND APPOINTMENT.— 
(A) APPOINTED VOTING MEMBERS.—The 
Commission shall contain 12 voting members as 
follows: 
(i) Six members appointed by the 
Speaker of the House of Representatives, 
with four members from the majority party 
and two members from the minority party. 
(ii) Six members appointed by the 
President Pro Tempore of the Senate, with 
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four members from the majority party and 
two members from the minority party. 
(B) CHAIRMAN.—The Speaker of the 
House of Representatives and the majority 
leader of the Senate shall jointly designate one 
of the members of the Commission as Chair-
man. 
(C) NON-VOTING
MEMBERS.—The Com-
mission shall contain 2 non-voting members as 
follows: 
(i) One member appointed by the Sec-
retary of the Treasury. 
(ii) One member who is the president 
of a district Federal reserve bank ap-
pointed by the Chair of the Board of Gov-
ernors of the Federal Reserve System. 
(2) PERIOD OF APPOINTMENT.—Each member 
shall be appointed for the life of the Commission. 
(3) TIMING OF APPOINTMENT.—All members of 
the Commission shall be appointed not later than 30 
days after the date of the enactment of this section. 
(4) VACANCIES.—A vacancy in the Commission 
shall not affect its powers, and shall be filled in the 
manner in which the original appointment was 
made. 
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(5) MEETINGS.— 
(A) INITIAL
MEETING.—The Commission 
shall hold its initial meeting and begin the oper-
ations of the Commission as soon as is prac-
ticable. 
(B) FURTHER MEETINGS.—The Commis-
sion shall meet upon the call of the Chair or a 
majority of its members. 
(6) QUORUM.—Seven voting members of the 
Commission shall constitute a quorum but a lesser 
number may hold hearings. 
(7) MEMBER OF CONGRESS DEFINED.—In this 
subsection, the term ‘‘Member of Congress’’ means 
a Senator or a Representative in, or Delegate or 
Resident Commissioner to, the Congress. 
(e) POWERS.— 
(1) HEARINGS AND SESSIONS.—The Commis-
sion or, on the authority of the Commission, any 
subcommittee or member thereof, may, for the pur-
pose of carrying out this section, hold hearings, sit 
and act at times and places, take testimony, receive 
evidence, or administer oaths as the Commission or 
such subcommittee or member thereof considers ap-
propriate. 
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(2) CONTRACT AUTHORITY.—To the extent or 
in the amounts provided in advance in appropriation 
Acts, the Commission may contract with and com-
pensate government and private agencies or persons 
to enable the Commission to discharge its duties 
under this section, without regard to section 3709 of 
the Revised Statutes (41 U.S.C. 5). 
(3) OBTAINING OFFICIAL DATA.— 
(A) IN GENERAL.—The Commission is au-
thorized to secure directly from any executive 
department, bureau, agency, board, commission, 
office, independent establishment, or instrumen-
tality of the Government, any information, in-
cluding suggestions, estimates, or statistics, for 
the purposes of this section. 
(B) REQUESTING
OFFICIAL
DATA.—The 
head of such department, bureau, agency, 
board, commission, office, independent estab-
lishment, or instrumentality of the government 
shall, to the extent authorized by law, furnish 
such information upon request made by— 
(i) the Chair; 
(ii) the Chair of any subcommittee 
created by a majority of the Commission; 
or 
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(iii) any member of the Commission 
designated by a majority of the commission 
to request such information. 
(4) ASSISTANCE FROM FEDERAL AGENCIES.— 
(A) 
GENERAL
SERVICES
ADMINISTRA-
TION.—The Administrator of General Services 
shall provide to the Commission on a reimburs-
able basis administrative support and other 
services for the performance of the functions of 
the Commission. 
(B) OTHER
DEPARTMENTS
AND
AGEN-
CIES.—In addition to the assistance prescribed 
in subparagraph (A), at the request of the 
Commission, departments and agencies of the 
United States shall provide such services, funds, 
facilities, staff, and other support services as 
may be authorized by law. 
(5) POSTAL
SERVICE.—The Commission may 
use the United States mails in the same manner and 
under the same conditions as other departments and 
agencies of the United States. 
(f) COMMISSION PERSONNEL.— 
(1) APPOINTMENT
AND
COMPENSATION
OF 
STAFF.— 
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(A) IN GENERAL.—Subject to rules pre-
scribed by the Commission, the Chair may ap-
point and fix the pay of the executive director 
and other personnel as the Chair considers ap-
propriate. 
(B) APPLICABILITY
OF
CIVIL
SERVICE 
LAWS.—The staff of the Commission may be 
appointed without regard to the provisions of 
title 5, United States Code, governing appoint-
ments in the competitive service, and may be 
paid without regard to the provisions of chapter 
51 and subchapter III of chapter 53 of that 
title relating to classification and General 
Schedule pay rates, except that an individual so 
appointed may not receive pay in excess of level 
V of the Executive Schedule. 
(2) CONSULTANTS.—The Commission may pro-
cure temporary and intermittent services under sec-
tion 3109(b) of title 5, United States Code, but at 
rates for individuals not to exceed the daily equiva-
lent of the rate of pay for a person occupying a posi-
tion at level IV of the Executive Schedule. 
(3) STAFF OF FEDERAL AGENCIES.—Upon re-
quest of the Commission, the head of any Federal 
department or agency may detail, on a reimbursable 
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basis, any of the personnel of such department or 
agency to the Commission to assist it in carrying out 
its duties under this section. 
(g) TERMINATION OF COMMISSION.— 
(1) IN GENERAL.—The Commission shall termi-
nate 6 months after the date on which the report is 
submitted under subsection (c)(2). 
(2) ADMINISTRATIVE ACTIVITIES BEFORE TER-
MINATION.—The Commission may use the period be-
tween the submission of its report and its termi-
nation for the purpose of concluding its activities, 
including providing testimony to the committee of 
Congress concerning its report. 
(h) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
$1,000,000, which shall remain available until the date on 
which the Commission terminates. 
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TITLE 
XI—IMPROVING 
INSUR-
ANCE 
COORDINATION 
THROUGH AN INDEPENDENT 
ADVOCATE 
SEC. 1101. REPEAL OF THE FEDERAL INSURANCE OFFICE; 
CREATION OF THE OFFICE OF THE INDE-
PENDENT INSURANCE ADVOCATE. 
(a) ESTABLISHMENT.—Section 313 of title 31, 
United States Code, is amended to read as follows (and 
conforming the table of contents for chapter 3 of such title 
accordingly): 
‘‘§ 313. Office of the Independent Insurance Advocate 
‘‘(a) ESTABLISHMENT.—There is established in the 
Department of the Treasury a bureau to be known as the 
Office of the Independent Insurance Advocate (in this sec-
tion referred to as the ‘Office’). 
‘‘(b) INDEPENDENT INSURANCE ADVOCATE.— 
‘‘(1) ESTABLISHMENT OF POSITION.—The chief 
officer of the Office of the Independent Insurance 
Advocate shall be known as the Independent Insur-
ance Advocate. The Independent Insurance Advocate 
shall perform the duties of such office under the 
general direction of the Secretary of the Treasury. 
‘‘(2) APPOINTMENT.—The Independent Insur-
ance Advocate shall be appointed by the President, 
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by and with the advice and consent of the Senate, 
from among persons having insurance expertise. 
‘‘(3) TERM.— 
‘‘(A) IN GENERAL.—The Independent In-
surance Advocate shall serve a term of 6 years, 
unless sooner removed by the President upon 
reasons which shall be communicated to the 
Senate. 
‘‘(B) SERVICE AFTER EXPIRATION.—If a 
successor is not nominated and confirmed by 
the end of the term of service of the Inde-
pendent Insurance Advocate, the person serving 
as Independent Insurance Advocate shall con-
tinue to serve until such time a successor is ap-
pointed and confirmed. 
‘‘(C) VACANCY.—An Independent Insur-
ance Advocate who is appointed to serve the re-
mainder of a predecessor’s uncompleted term 
shall be eligible thereafter to be appointed to a 
full 6 year term. 
‘‘(D) ACTING
OFFICIAL
ON
FINANCIAL 
STABILITY OVERSIGHT COUNCIL.—In the event 
of a vacancy in the office of the Independent 
Insurance Advocate, and pending the appoint-
ment and confirmation of a successor, or during 
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the absence or disability of the Independent In-
surance Advocate, the President shall appoint a 
federal official appointed by the President and 
confirmed by the Senate from a member agency 
of the Financial Stability Oversight Council, not 
otherwise serving on the Council, who shall 
serve as a member of the Council and act in the 
place of the Independent Insurance Advocate 
until such vacancy, absence, or disability con-
cludes. 
‘‘(4) EMPLOYMENT.—The Independent Insur-
ance Advocate shall be an employee of the Federal 
Government within the definition of employee under 
section 2105 of title 5, United States Code. 
‘‘(c) INDEPENDENCE; OVERSIGHT.— 
‘‘(1) INDEPENDENCE.—The Secretary of the 
Treasury may not delay or prevent the issuance of 
any rule or the promulgation of any regulation by 
the Independent Insurance Advocate, and may not 
intervene in any matter or proceeding before the 
Independent Insurance Advocate, unless otherwise 
specifically provided by law. 
‘‘(2) OVERSIGHT
BY
INSPECTOR
GENERAL.— 
The Office of the Independent Insurance Advocate 
shall be an office in the establishment of the Depart-
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ment of the Treasury for purposes of the Inspector 
General Act of 1978 (5 U.S.C. App.). 
‘‘(d) RETENTION OF EXISTING STATE REGULATORY 
AUTHORITY.—Nothing in this section or section 314 shall 
be construed to establish or provide the Office or the De-
partment of the Treasury with general supervisory or reg-
ulatory authority over the business of insurance. 
‘‘(e) BUDGET.— 
‘‘(1) ANNUAL TRANSMITTAL.—For each fiscal 
year, the Independent Insurance Advocate shall 
transmit a budget estimate and request to the Sec-
retary of the Treasury, which shall specify the ag-
gregate amount of funds requested for such fiscal 
year for the operations of the Office of the Inde-
pendent Insurance Advocate. 
‘‘(2) INCLUSIONS.—In transmitting the pro-
posed budget to the President for approval, the Sec-
retary of the Treasury shall include— 
‘‘(A) an aggregate request for the Inde-
pendent Insurance Advocate; and 
‘‘(B) any comments of the Independent In-
surance Advocate with respect to the proposal. 
‘‘(3) PRESIDENT’S
BUDGET.—The President 
shall include in each budget of the United States 
Government submitted to the Congress— 
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‘‘(A) a separate statement of the budget 
estimate prepared in accordance with paragraph 
(1); 
‘‘(B) the amount requested by the Presi-
dent for the Independent Insurance Advocate; 
and 
‘‘(C) any comments of the Independent In-
surance Advocate with respect to the proposal if 
the Independent Insurance Advocate concludes 
that the budget submitted by the President 
would substantially inhibit the Independent In-
surance Advocate from performing the duties of 
the office. 
‘‘(f) ASSISTANCE.—The Secretary of the Treasury 
shall provide the Independent Insurance Advocate such 
services, funds, facilities and other support services as the 
Independent Insurance Advocate may request and as the 
Secretary may approve. 
‘‘(g) PERSONNEL.— 
‘‘(1) EMPLOYEES.—The Independent Insurance 
Advocate may fix the number of, and appoint and 
direct, the employees of the Office, in accordance 
with the applicable provisions of title 5, United 
States Code. The Independent Insurance Advocate is 
authorized to employ attorneys, analysts, economists, 
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and other employees as may be deemed necessary to 
assist the Independent Insurance Advocate to carry 
out the duties and functions of the Office. Unless 
otherwise provided expressly by law, any individual 
appointed under this paragraph shall be an employee 
as defined in section 2105 of title 5, United States 
Code, and subject to the provisions of such title and 
other laws generally applicable to the employees of 
the Executive Branch. 
‘‘(2) COMPENSATION.—Employees of the Office 
shall be paid in accordance with the provisions of 
chapter 51 and subchapter III of chapter 53 of title 
5, United States Code, relating to classification and 
General Schedule pay rates. 
‘‘(3) PROCUREMENT
OF
TEMPORARY
AND 
INTERMITTENT SERVICES.—The Independent Insur-
ance Advocate may procure temporary and intermit-
tent services under section 3109(b) of title 5, United 
States Code, at rates for individuals which do not 
exceed the daily equivalent of the annual rate of 
basic pay prescribed for Level V of the Executive 
Schedule under section 5316 of such title. 
‘‘(4) DETAILS.—Any employee of the Federal 
Government may be detailed to the Office with or 
without reimbursement, and such detail shall be 
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without interruption or loss of civil service status or 
privilege. An employee of the Federal Government 
detailed to the Office shall report to and be subject 
to oversight by the Independent Insurance Advocate 
during the assignment to the office, and may be 
compensated by the branch, department, or agency 
from which the employee was detailed. 
‘‘(5) INTERGOVERNMENTAL PERSONNEL.—The 
Independent Insurance Advocate may enter into 
agreements under subchapter VI of chapter 33 of 
title 5, United States Code, with State and local 
governments, institutions of higher education, Indian 
tribal governments, and other eligible organizations 
for the assignment of intermittent, part-time, and 
full-time personnel, on a reimbursable or non-reim-
bursable basis. 
‘‘(h) ETHICS.— 
‘‘(1) DESIGNATED
ETHICS
OFFICIAL.—The 
Legal Counsel of the Financial Stability Oversight 
Council, or in the absence of a Legal Counsel of the 
Council, the designated ethics official of any Council 
member agency, as chosen by the Independent In-
surance Advocate, shall be the ethics official for the 
Independent Insurance Advocate. 
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‘‘(2) RESTRICTION
ON
REPRESENTATION.—In 
addition to any restriction under section 205(c) of 
title18, United States Code, except as provided in 
subsections (d) through (i) of section 205 of such 
title, the Independent Insurance Advocate (except in 
the proper discharge of official duties) shall not, 
with or without compensation, represent anyone to 
or before any officer or employee of— 
‘‘(A) the Financial Stability Oversight 
Council on any matter; or 
‘‘(B) the Department of Justice with re-
spect to litigation involving a matter described 
in subparagraph (A). 
‘‘(3) COMPENSATION FOR SERVICES PROVIDED 
BY ANOTHER.—For purposes of section 203 of title 
18, United States Code, and if a special government 
employee— 
‘‘(A) the Independent Insurance Advocate 
shall not be subject to the restrictions of sub-
section (a)(1) of section 203,of title 18, United 
States Code, for sharing in compensation 
earned by another for representations on mat-
ters covered by such section; and 
‘‘(B) a person shall not be subject to the 
restrictions of subsection (a)(2) of such section 
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for sharing such compensation with the Inde-
pendent Insurance Advocate. 
‘‘(i) ADVISORY, TECHNICAL, AND PROFESSIONAL 
COMMITTEES.—The Independent Insurance Advocate may 
appoint such special advisory, technical, or professional 
committees as may be useful in carrying out the functions 
of the Office and the members of such committees may 
be staff of the Office, or other persons, or both. 
‘‘(j) MISSION AND FUNCTIONS.— 
‘‘(1) MISSION.—In carrying out the functions 
under this subsection, the mission of the Office shall 
be to act as an independent advocate on behalf of 
the interests of United States policyholders on pru-
dential aspects of insurance matters of importance, 
and to provide perspective on protecting their inter-
ests, separate and apart from any other Federal 
agency or State insurance regulator. 
‘‘(2) OFFICE.—The Office shall have the au-
thority— 
‘‘(A) to coordinate Federal efforts on pru-
dential aspects of international insurance mat-
ters, including representing the United States, 
as appropriate, in the International Association 
of Insurance Supervisors (or a successor entity) 
and assisting the Secretary in negotiating cov-
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ered agreements (as such term is defined in 
subsection (q)) in coordination with States (in-
cluding State insurance commissioners) and the 
United States Trade Representative; 
‘‘(B) to consult with the States (including 
State insurance regulators) regarding insurance 
matters of national importance and prudential 
insurance matters of international importance; 
‘‘(C) to assist the Secretary in admin-
istering the Terrorism Insurance Program es-
tablished in the Department of the Treasury 
under the Terrorism Risk Insurance Act of 
2002 (15 U.S.C. 6701 note); 
‘‘(D) to observe all aspects of the insur-
ance industry, including identifying issues or 
gaps in the regulation of insurers that could 
contribute to a systemic crisis in the insurance 
industry or the United States financial system; 
and 
‘‘(E) to make determinations and exercise 
the authority under subsection (m) with respect 
to covered agreements and State insurance 
measures. 
‘‘(3) MEMBERSHIP
ON
FINANCIAL
STABILITY 
OVERSIGHT COUNCIL.— 
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‘‘(A) IN GENERAL.—The Independent In-
surance Advocate shall serve, pursuant to sec-
tion 111(b)(1)(J) of the Financial Stability Act 
of 2010 (12 U.S.C. 5321(b)(1)(J)), as a mem-
ber on the Financial Stability Oversight Coun-
cil. 
‘‘(B) AUTHORITY.—To assist the Financial 
Stability Oversight Council with its responsibil-
ities to monitor international insurance develop-
ments, advise the Congress, and make rec-
ommendations, the Independent Insurance Ad-
vocate shall have the authority— 
‘‘(i) to regularly consult with inter-
national insurance supervisors and inter-
national financial stability counterparts; 
‘‘(ii) to consult with the Board of 
Governors of the Federal Reserve System 
and the States with respect to representing 
the United States, as appropriate, in the 
International Association of Insurance Su-
pervisors (including to become a non-voting 
member thereof), particularly on matters 
of systemic risk; 
‘‘(iii) to participate at the Financial 
Stability Board of The Group of Twenty 
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and to join with other members from the 
United States including on matters related 
to insurance; and 
‘‘(iv) to participate with the United 
States delegation to the Organization for 
Economic Cooperation and Development 
and observe and participate at the Insur-
ance and Private Pensions Committee. 
‘‘(4) LIMITATIONS ON PARTICIPATION IN SU-
PERVISORY COLLEGES.—The Office may not engage 
in any activities that it is not specifically authorized 
to engage in under this section or any other provi-
sion of law, including participation in any super-
visory college or other meetings or fora for coopera-
tion and communication between the involved insur-
ance supervisors established for the fundamental 
purpose of facilitating the effectiveness of super-
vision of entities which belong to an insurance 
group. 
‘‘(k) SCOPE.—The authority of the Office as specified 
and limited in this section shall extend to all lines of insur-
ance except— 
‘‘(1) health insurance, as determined by the 
Secretary in coordination with the Secretary of 
Health and Human Services based on section 2791 
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of the Public Health Service Act (42 U.S.C. 300gg- 
91); 
‘‘(2) long-term care insurance, except long-term 
care insurance that is included with life or annuity 
insurance components, as determined by the Sec-
retary in coordination with the Secretary of Health 
and Human Services, and in the case of long-term 
care insurance that is included with such compo-
nents, the Secretary shall coordinate with the Sec-
retary of Health and Human Services in performing 
the functions of the Office; and 
‘‘(3) crop insurance, as established by the Fed-
eral Crop Insurance Act (7 U.S.C. 1501 et seq.). 
‘‘(l) ACCESS TO INFORMATION.—In carrying out the 
functions required under subsection (j), the Office may co-
ordinate with any relevant Federal agency and any State 
insurance regulator (or other relevant Federal or State 
regulatory agency, if any, in the case of an affiliate of an 
insurer) and any publicly available sources for the provi-
sion to the Office of publicly available information. Not-
withstanding any other provision of law, each such rel-
evant Federal agency and State insurance regulator or 
other Federal or State regulatory agency is authorized to 
provide to the Office such data or information. 
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‘‘(m) PREEMPTION PURSUANT TO COVERED AGREE-
MENTS.— 
‘‘(1) STANDARDS.—A State insurance measure 
shall be preempted pursuant to this section or sec-
tion 314 if, and only to the extent that the Inde-
pendent Insurance Advocate determines, in accord-
ance with this subsection, that the measure— 
‘‘(A) results in less favorable treatment of 
a non-United States insurer domiciled in a for-
eign jurisdiction that is subject to a covered 
agreement than a United States insurer domi-
ciled, licensed, or otherwise admitted in that 
State; and 
‘‘(B) is inconsistent with a covered agree-
ment. 
‘‘(2) DETERMINATION.— 
‘‘(A) NOTICE
OF
POTENTIAL
INCONSIST-
ENCY.—Before 
making 
any 
determination 
under paragraph (1), the Independent Insur-
ance Advocate shall— 
‘‘(i) notify and consult with the appro-
priate State regarding any potential incon-
sistency or preemption; 
‘‘(ii) notify and consult with the 
United States Trade Representative re-
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garding any potential inconsistency or pre-
emption; 
‘‘(iii) cause to be published in the 
Federal Register notice of the issue re-
garding the potential inconsistency or pre-
emption, including a description of each 
State insurance measure at issue and any 
applicable covered agreement; 
‘‘(iv) provide interested parties a rea-
sonable opportunity to submit written com-
ments to the Office; and 
‘‘(v) consider any comments received. 
‘‘(B) SCOPE OF REVIEW.—For purposes of 
this subsection, any determination of the Inde-
pendent Insurance Advocate regarding State in-
surance measures, and any preemption under 
paragraph (1) as a result of such determina-
tion, shall be limited to the subject matter con-
tained within the covered agreement involved 
and shall achieve a level of protection for insur-
ance or reinsurance consumers that is substan-
tially equivalent to the level of protection 
achieved under State insurance or reinsurance 
regulation. 
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‘‘(C) NOTICE OF DETERMINATION OF IN-
CONSISTENCY.—Upon making any determina-
tion under paragraph (1), the Director shall— 
‘‘(i) notify the appropriate State of 
the determination and the extent of the in-
consistency; 
‘‘(ii) establish a reasonable period of 
time, which shall not be less than 30 days, 
before the determination shall become ef-
fective; and 
‘‘(iii) notify the Committees on Finan-
cial Services and Ways and Means of the 
House of Representatives and the Commit-
tees on Banking, Housing, and Urban Af-
fairs and Finance of the Senate. 
‘‘(3) NOTICE OF EFFECTIVENESS.—Upon the 
conclusion of the period referred to in paragraph 
(2)(C)(ii), if the basis for such determination still 
exists, the determination shall become effective and 
the Independent Insurance Advocate shall— 
‘‘(A) cause to be published a notice in the 
Federal Register that the preemption has be-
come effective, as well as the effective date; and 
‘‘(B) notify the appropriate State. 
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‘‘(4) LIMITATION.—No State may enforce a 
State insurance measure to the extent that such 
measure has been preempted under this subsection. 
‘‘(5) APPLICABILITY OF ADMINISTRATIVE PRO-
CEDURES
ACT.—Determinations of inconsistency 
made pursuant to paragraph (2) shall be subject to 
the applicable provisions of subchapter II of chapter 
5 of title 5, United States Code (relating to adminis-
trative procedure), and chapter 7 of such title (relat-
ing to judicial review), except that in any action for 
judicial review of a determination of inconsistency, 
the court shall determine the matter de novo. 
‘‘(n) CONSULTATION.—The Independent Insurance 
Advocate shall consult with State insurance regulators, in-
dividually or collectively, to the extent the Independent In-
surance Advocate determines appropriate, in carrying out 
the functions of the Office. 
‘‘(o) NOTICES AND REQUESTS FOR COMMENT.—In 
addition to the other functions and duties specified in this 
section, the Independent Insurance Advocate may pre-
scribe such notices and requests for comment in the Fed-
eral Register as are deemed necessary related to and gov-
erning the manner in which the duties and authorities of 
the Independent Insurance Advocate are carried out; 
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‘‘(p) SAVINGS PROVISIONS.—Nothing in this section 
shall— 
‘‘(1) preempt— 
‘‘(A) any State insurance measure that 
governs any insurer’s rates, premiums, under-
writing, or sales practices; 
‘‘(B) any State coverage requirements for 
insurance; 
‘‘(C) the application of the antitrust laws 
of any State to the business of insurance; or 
‘‘(D) any State insurance measure gov-
erning the capital or solvency of an insurer, ex-
cept to the extent that such State insurance 
measure results in less favorable treatment of a 
non-United State insurer than a United States 
insurer; or 
‘‘(2) affect the preemption of any State insur-
ance measure otherwise inconsistent with and pre-
empted by Federal law. 
‘‘(q) RETENTION OF AUTHORITY OF FEDERAL FI-
NANCIAL REGULATORY AGENCIES.—Nothing in this sec-
tion or section 314 shall be construed to limit the author-
ity of any Federal financial regulatory agency, including 
the authority to develop and coordinate policy, negotiate, 
and enter into agreements with foreign governments, au-
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thorities, regulators, and multinational regulatory commit-
tees and to preempt State measures to affect uniformity 
with international regulatory agreements. 
‘‘(r) RETENTION OF AUTHORITY OF UNITED STATES 
TRADE REPRESENTATIVE.—Nothing in this section or 
section 314 shall be construed to affect the authority of 
the Office of the United States Trade Representative pur-
suant to section 141 of the Trade Act of 1974 (19 U.S.C. 
2171) or any other provision of law, including authority 
over the development and coordination of United States 
international trade policy and the administration of the 
United States trade agreements program. 
‘‘(s) 
CONGRESSIONAL
TESTIMONY.—The 
Inde-
pendent Insurance Advocate shall appear before the Com-
mittee on Financial Services of the House of Representa-
tives and the Committee on Banking, Housing, and Urban 
Affairs at semi-annual hearings and shall provide testi-
mony, which shall include submitting written testimony in 
advance of such appearances to such committees and to 
the Committee on Ways and Means of the House of Rep-
resentatives and the Committee on Finance of the Senate, 
on the following matters: 
‘‘(1) OFFICE ACTIVITIES.—The efforts, activi-
ties, objectives, and plans of the Office. 
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‘‘(2) SECTION
313(L)
ACTIONS.—Any actions 
taken by the Office pursuant to subsection (l) (re-
garding preemption pursuant to covered agree-
ments). 
‘‘(3) INSURANCE INDUSTRY.—The state of, and 
developments in, the insurance industry. 
‘‘(4) U.S. AND GLOBAL INSURANCE AND REIN-
SURANCE MARKETS.—The breadth and scope of the 
global insurance and reinsurance markets and the 
critical role such markets plays in supporting insur-
ance in the United States and the ongoing impacts 
of part II of the Nonadmitted and Reinsurance Re-
form Act of 2010 on the ability of State regulators 
to access reinsurance information for regulated com-
panies in their jurisdictions. 
‘‘(5) OTHER.—Any other matters as deemed 
relevant by the Independent Insurance Advocate or 
requested by such Committees. 
‘‘(t) REPORT UPON END OF TERM OF OFFICE.—Not 
later than two months prior to the expiration of the term 
of office, or discontinuation of service, of each individual 
serving as the Independent Insurance Advocate, the Inde-
pendent Insurance Advocate shall submit a report to the 
Committees on Financial Services and Ways and Means 
of the House of Representatives and the Committees on 
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Banking, Housing, and Urban Affairs and Finance of the 
Senate setting forth recommendations regarding the Fi-
nancial Stability Oversight Council and the role, duties, 
and functions of the Independent Insurance Advocate. 
‘‘(u) DEFINITIONS.—In this section and section 314, 
the following definitions shall apply: 
‘‘(1) AFFILIATE.—The term ‘affiliate’ means, 
with respect to an insurer, any person who controls, 
is controlled by, or is under common control with the 
insurer. 
‘‘(2) COVERED
AGREEMENT.—The term ‘cov-
ered agreement’ means a written bilateral or multi-
lateral agreement regarding prudential measures 
with respect to the business of insurance or reinsur-
ance that— 
‘‘(A) is entered into between the United 
States and one or more foreign governments, 
authorities, or regulatory entities; and 
‘‘(B) relates to the recognition of pruden-
tial measures with respect to the business of in-
surance or reinsurance that achieves a level of 
protection for insurance or reinsurance con-
sumers that is substantially equivalent to the 
level of protection achieved under State insur-
ance or reinsurance regulation. 
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‘‘(3) INSURER.—The term ‘insurer’ means any 
person engaged in the business of insurance, includ-
ing reinsurance. 
‘‘(4) FEDERAL FINANCIAL REGULATORY AGEN-
CY.—The term ‘Federal financial regulatory agency’ 
means the Department of the Treasury, the Board 
of Governors of the Federal Reserve System, the Of-
fice of the Comptroller of the Currency, the Office 
of Thrift Supervision, the Securities and Exchange 
Commission, the Commodity Futures Trading Com-
mission, the Federal Deposit Insurance Corporation, 
the Federal Housing Finance Agency, or the Na-
tional Credit Union Administration. 
‘‘(5) FINANCIAL STABILITY OVERSIGHT COUN-
CIL.—The term ‘Financial Stability Oversight Coun-
cil ’ means the Financial Stability Oversight Council 
established under section 111(a) of the Dodd-Frank 
Wall Street Reform and Consumer Protection Act 
(12 U.S.C. 5321(a)). 
‘‘(6) MEMBER
AGENCY.—The term ‘member 
agency’ has the meaning given such term in section 
111(a) of the Dodd-Frank Wall Street Reform and 
Consumer Protection Act (12 U.S.C. 5321(a)). 
‘‘(7) NON-UNITED STATES INSURER.—The term 
‘non-United States insurer’ means an insurer that is 
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organized under the laws of a jurisdiction other than 
a State, but does not include any United States 
branch of such an insurer. 
‘‘(8) OFFICE.—The term ‘Office’ means the Of-
fice of the Independent Insurance Advocate estab-
lished by this section. 
‘‘(9) STATE INSURANCE MEASURE.—The term 
‘State insurance measure’ means any State law, reg-
ulation, administrative ruling, bulletin, guideline, or 
practice relating to or affecting prudential measures 
applicable to insurance or reinsurance. 
‘‘(10) STATE
INSURANCE
REGULATOR.—The 
term ‘State insurance regulator’ means any State 
regulatory authority responsible for the supervision 
of insurers. 
‘‘(11) SUBSTANTIALLY
EQUIVALENT
TO
THE 
LEVEL OF PROTECTION ACHIEVED.—The term ‘sub-
stantially equivalent to the level of protection 
achieved’ means the prudential measures of a for-
eign government, authority, or regulatory entity 
achieve a similar outcome in consumer protection as 
the outcome achieved under State insurance or rein-
surance regulation. 
‘‘(12) UNITED
STATES
INSURER.—The term 
‘United States insurer’ means— 
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‘‘(A) an insurer that is organized under 
the laws of a State; or 
‘‘(B) a United States branch of a non- 
United States insurer.’’. 
(b) PAY AT LEVEL III OF EXECUTIVE SCHEDULE.— 
Section 5314 of title 5, United States Code, is amended 
by adding at the end the following new item: 
‘‘Independent Insurance Advocate, Department 
of the Treasury.’’. 
(c) INDEPENDENCE.—Section 111 of Public Law 93– 
495 (12 U.S.C. 250) is amended— 
(1) by inserting ‘‘the Independent Insurance 
Advocate of the Department of the Treasury,’’ after 
‘‘Federal Housing Finance Agency,’’; and 
(2) by inserting ‘‘or official’’ before ‘‘submitting 
them’’. 
(d) TRANSFER OF EMPLOYEES.—All employees of 
the Department of Treasury who are performing staff 
functions for the independent member of the Financial 
Stability Oversight Council under section 111(b)(2)(J) of 
the Dodd-Frank Wall Street Reform and Consumer Pro-
tection Act (12 U.S.C. 5321(b)(2)(J)) on a full-time 
equivalent basis as of the date of enactment of this Act 
shall be eligible for transfer to the Office of the Inde-
pendent Insurance Advocate established pursuant to the 
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amendment made by subsection (a) of this section for ap-
pointment as an employee and shall be transferred at the 
joint discretion of the Independent Insurance Advocate 
and the eligible employee. Any employee eligible for trans-
fer that is not appointed within 360 days from the date 
of enactment of this Act shall be eligible for detail under 
section 313(f)(4) of title 31, United States Code. 
(e) TEMPORARY SERVICE; TRANSITION.—Notwith-
standing the amendment made by subsection (a) of this 
section, during the period beginning on the date of the 
enactment of this Act and ending on the date on which 
the Independent Insurance Advocate is appointed and con-
firmed pursuant to section 313(b)(2) of title 31, United 
States Code, as amended by such amendment, the person 
serving, on such date of enactment, as the independent 
member of the Financial Stability Oversight Council pur-
suant to section 111(b)(1)(J) of the Dodd-Frank Wall 
Street Reform and Consumer Protection Act (12 U.S.C. 
5321(b)(1)(J)) shall act for all purposes as, and with the 
full powers of, the Independent Insurance Advocate. 
(f) COMPARABILITY
IN
COMPENSATION
SCHED-
ULES.—Subsection (a) of section 1206 of the Financial 
Institutions Reform, Recovery, and Enforcement Act of 
1989 (12 U.S.C. 1833b(a)), as amended by section 
711(c)(11)(D), is further amended by inserting ‘‘the Of-
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