(2) REPORT TO CONGRESS.—Not later than 2 
years after the date of enactment of this Act, the 
Commission shall submit a report to the Congress 
on the results of the study and review required by 
this paragraph. 
SEC. 4. ENHANCED COMPENSATION STRUCTURE REPORT-
ING TO REDUCE PERVERSE INCENTIVES. 
(a) ENHANCED DISCLOSURE
AND REPORTING
OF 
COMPENSATION ARRANGEMENTS.—Not later than 270 
days after the date of enactment of this Act, the appro-
priate Federal regulators jointly shall prescribe regula-
tions to require each covered financial institution to dis-
close to the appropriate Federal regulator the structures 
of the incentive-based compensation arrangements for offi-
cers and employees of such institution sufficient to deter-
mine whether the compensation structure— 
(1) is aligned with sound risk management; 
(2) is structured to account for the time hori-
zon of risks; and 
(3) meets such other criteria as the appropriate 
Federal regulators jointly may determine to be ap-
propriate to reduce unreasonable incentives for offi-
cers and employees to take undue risks that— 
(A) could threaten the safety and sound-
ness of covered financial institutions; or 
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(B) could have serious adverse effects on 
economic conditions or financial stability. 
(b) PROHIBITION
ON
CERTAIN
COMPENSATION 
STRUCTURES.—Not later than 270 days after the date of 
enactment of this Act, and taking into account the factors 
described in paragraphs (1), (2), and (3) of subsection (a), 
the appropriate Federal regulators shall jointly prescribe 
regulations that prohibit any compensation structure or 
incentive-based payment arrangement, or any feature of 
any such compensation structure or arrangement, that the 
regulators determine encourages inappropriate risks by fi-
nancial institutions or officers or employees of covered fi-
nancial institutions that— 
(1) could threaten the safety and soundness of 
covered financial institutions; or 
(2) could have serious adverse effects on eco-
nomic conditions or financial stability. 
(c) ENFORCEMENT.—The provisions of this section 
shall be enforced under section 505 of the Gramm-Leach- 
Bliley Act and, for purposes of such section, a violation 
of this section shall be treated as a violation of subtitle 
A of title V of such Act. 
(d) DEFINITIONS.—As used in this section— 
(1) the term ‘‘appropriate Federal regulator’’ 
means— 
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(A) the Board of Governors of the Federal 
Reserve System; 
(B) the Office of the Comptroller of the 
Currency; 
(C) the Board of Directors of the Federal 
Deposit Insurance Corporation; 
(D) the Director of the Office of Thrift 
Supervision; 
(E) the National Credit Union Administra-
tion Board; and 
(F) the Securities and Exchange Commis-
sion; and 
(2) the term ‘‘covered financial institution’’ 
means— 
(A) a depository institution or depository 
institution holding company, as such terms are 
defined in section 3 of the Federal Deposit In-
surance Act (12 U.S.C. 1813); 
(B) a broker-dealer registered under sec-
tion 15 of the Securities Exchange Act of 1934 
(15 U.S.C. 78o); 
(C) a credit union, as described in section 
19(b)(1)(A)(iv) of the Federal Reserve Act; 
(D) an investment advisor, as such term is 
defined in section 202(a)(11) of the Investment 
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Advisers Act of 1940 (15 U.S.C. 80b–2(a)(11)); 
and 
(E) any other financial institution that the 
appropriate Federal regulators, jointly, by rule, 
determine should be treated as a covered finan-
cial institution for purposes of this section. 
Æ 
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