I 
114TH CONGRESS 
1ST SESSION H. R. 1167 
To establish the Securities and Derivatives Commission in order to combine 
the functions of the Commodity Futures Trading Commission and the 
Securities and Exchange Commission in a single independent regulatory 
commission. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 27, 2015 
Mr. CAPUANO (for himself, Mr. HIMES, and Mr. LYNCH) introduced the fol-
lowing bill; which was referred to the Committee on Financial Services, 
and in addition to the Committee on Agriculture, for a period to be sub-
sequently determined by the Speaker, in each case for consideration of 
such provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To establish the Securities and Derivatives Commission in 
order to combine the functions of the Commodity Fu-
tures Trading Commission and the Securities and Ex-
change Commission in a single independent regulatory 
commission. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Markets and Trading Reorganization Act’’. 
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(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Purposes. 
Sec. 3. Definition. 
TITLE I—ESTABLISHMENT OF COMMISSION 
Sec. 101. Establishment. 
Sec. 102. Members; appointment; terms. 
Sec. 103. Organization of Commission. 
TITLE II—TRANSFERS OF FUNCTIONS 
Sec. 201. Commodity Futures Trading Commission functions. 
Sec. 202. Securities and Exchange Commission functions. 
TITLE III—ADMINISTRATIVE PROVISIONS 
Sec. 301. Personnel provisions. 
Sec. 302. General administrative provisions. 
TITLE IV—FEE AND FUNDING AUTHORITY 
Sec. 401. Funding authority of the Commission. 
TITLE V—TRANSITIONAL, SAVINGS, AND CONFORMING 
PROVISIONS 
Sec. 501. Savings provisions. 
Sec. 502. Reference. 
Sec. 503. Amendments. 
TITLE VI—EFFECTIVE DATE 
Sec. 601. Effective date. 
SEC. 2. PURPOSES. 
The purposes of this Act are— 
(1) to establish a single Federal regulatory body 
with jurisdiction over securities, derivatives, options, 
futures, and related markets and instruments; 
(2) to coordinate the regulation of relevant fi-
nancial markets; 
(3) to strengthen investor confidence in United 
States financial markets; and 
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(4) to ensure the efficiency and competitiveness 
of those markets. 
SEC. 3. DEFINITION. 
As used in this Act, the term ‘‘Commission’’, other 
than where expressly referring to the Securities and Ex-
change Commission or the Commodity Futures Trading 
Commission, means the Securities and Derivatives Com-
mission established by section 101 of this Act. 
TITLE I—ESTABLISHMENT OF 
COMMISSION 
SEC. 101. ESTABLISHMENT. 
There is established an independent regulatory com-
mission to be known as the Securities and Derivatives 
Commission. 
SEC. 102. MEMBERS; APPOINTMENT; TERMS. 
(a) COMPOSITION OF COMMISSION.—The Commis-
sion shall be composed of 5 commissioners appointed by 
the President, by and with the advice and consent of the 
Senate. One of the commissioners shall be designated by 
the President as chairperson. Not more than three of such 
commissioners shall be members of the same political 
party. Each commissioner shall be selected solely on the 
basis of integrity and demonstrated knowledge of the oper-
ations of the markets subject to the jurisdiction of the 
Commission. 
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for which the predecessor was appointed shall be ap-
pointed for the remainder of such term. 
SEC. 103. ORGANIZATION OF COMMISSION. 
(a) REQUIRED DIVISIONS.—The Commission shall 
establish the principal divisions and subdivisions of the 
Commission, including, at a minimum, the following three 
divisions: 
(1) A Markets and Trading Division with over-
sight of market conduct and utilities, the conduct of 
market professionals, and self-regulatory organiza-
tions with regard to such market professionals, in-
cluding related examination functions. 
(2) An Issuers and Financial Disclosures Divi-
sion with oversight of the issuance of securities, in-
cluding investment companies and related rules and 
examinations. 
(3) An Enforcement Division responsible for the 
enforcement of all rules of the Commission. 
(b) OTHER OFFICES.—The Commission may estab-
lish such other offices as it determines useful in the con-
duct of the Commission’s affairs. 
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TITLE II—TRANSFERS OF 
FUNCTIONS 
SEC. 201. COMMODITY FUTURES TRADING COMMISSION 
FUNCTIONS. 
There are transferred to the Commission all functions 
of the Commodity Futures Trading Commission and of 
any officer or component of the Commodity Futures Trad-
ing Commission. 
SEC. 202. SECURITIES AND EXCHANGE COMMISSION FUNC-
TIONS. 
There are transferred to the Commission all functions 
of the Securities and Exchange Commission and of any 
officer or component of the Securities and Exchange Com-
mission. 
TITLE III—ADMINISTRATIVE 
PROVISIONS 
SEC. 301. PERSONNEL PROVISIONS. 
(a) APPOINTMENT AND COMPENSATION.—The Com-
mission may appoint and fix the compensation of such of-
ficers and employees as may be necessary to carry out the 
functions of the Commission. Except as otherwise provided 
by law, such officers and employees shall be appointed in 
accordance with the civil service laws and the compensa-
tion of such employees shall be fixed in accordance with 
section 4802 of title 5, United States Code. The Commis-
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sion shall, in accordance with such section, adjust the com-
pensation of employees so that the compensation of em-
ployees transferred from the Commodity Futures Trading 
Commission pursuant to subsection (b) and the compensa-
tion of employees transferred from the Securities and Ex-
change Commission under such subsection are aligned. In 
making such an adjustment, the Commission shall not re-
duce the compensation of any employee. 
(b) TRANSFER OF EMPLOYEES.— 
(1) IN GENERAL.—All employees of the Com-
modity Futures Trading Commission and the Securi-
ties and Exchange Commission shall be transferred 
to the Commission. Each employee to be transferred 
under this subsection shall be transferred not later 
than 90 days after the effective date set forth in sec-
tion 601. 
(2) EMPLOYEE STATUS AND FUNCTIONS.— 
(A) STATUS.—The transfer of employees 
under this section shall not affect the status of 
the transferred employees as employees of an 
agency of the United States under any provi-
sion of law. Each transferred employee shall be 
placed in a position at the Commission with the 
same status and tenure as the transferred em-
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ployee held on the day before the date on which 
the employee was transferred. 
(B) FUNCTIONS.—To the extent prac-
ticable, each transferred employee shall be 
placed in a position at the Commission respon-
sible for the same functions and duties as the 
transferred employee had on the day before the 
date on which the employee was transferred, in 
accordance with the expertise and preferences 
of the transferred employee. 
(3) PERSONNEL ACTIONS LIMITED.— 
(A) PROTECTION.—Except as provided in 
subparagraph (B), each transferred employee 
shall not, during the 3-year period beginning on 
the transfer date, be involuntarily separated, or 
involuntarily reassigned outside his or her local-
ity pay area. 
(B) EXCEPTIONS.—Subparagraph (A) does 
not limit the right of the Commission to— 
(i) separate an employee for cause or 
for unacceptable performance; 
(ii) terminate an appointment to a po-
sition excepted from the competitive service 
because of its confidential policy-making, 
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policy-determining, 
or 
policy-advocating 
character; or 
(iii) reassign an employee outside such 
employee’s locality pay area when the 
Commission determines that the reassign-
ment is necessary for the efficient oper-
ation of the Commission. 
(4) PAY.— 
(A) PROTECTION.— 
(i) IN GENERAL.—Except as provided 
in clause (ii), each transferred employee 
shall, during the 3-year period beginning 
on the designated transfer date, receive 
pay at a rate equal to not less than the 
basic rate of pay (including any geographic 
differential) that the employee received 
during the pay period immediately pre-
ceding the date of transfer. 
(ii) 
LIMITATION.—Notwithstanding 
clause (i), if the employee was receiving a 
higher rate of basic pay on a temporary 
basis (because of a temporary assignment, 
temporary promotion, or other temporary 
action) immediately before the date of 
transfer, the Commission may reduce the 
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rate of basic pay on the date on which the 
rate would have been reduced but for the 
transfer, and the protected rate for the re-
mainder of the 3-year period shall be the 
reduced rate that would have applied, but 
for the transfer. 
(B) EXCEPTIONS.—Subparagraph (A) does 
not limit the right of the Commission to reduce 
the rate of basic pay of a transferred em-
ployee— 
(i) for cause or for unacceptable per-
formance; or 
(ii) with the consent of the employee. 
(C) 
PROTECTION
ONLY
WHILE
EM-
PLOYED.—Subparagraph (A) applies to a trans-
ferred employee only while that employee re-
mains employed by the Commission. 
(D) PAY
INCREASES
PERMITTED.—Sub-
paragraph (A) does not limit the authority of 
the Commission to increase the pay of a trans-
ferred employee. 
SEC. 302. GENERAL ADMINISTRATIVE PROVISIONS. 
(a) GENERAL AUTHORITY.—In carrying out any 
function transferred by this Act, the Commission, or any 
officer or employee of the Commission, may exercise any 
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authority available by law with respect to such function 
to the official or agency from which such function is trans-
ferred, and the actions of the Commission, or any officer 
or employee of the Commission in exercising such author-
ity shall have the same force and effect as when exercised 
by such official or agency. 
(b) RULES.—The Commission may prescribe such 
rules and regulations as the Commission determines nec-
essary or appropriate to administer and manage the func-
tions of the Commission. 
(c) CONTRACTS.—The Commission may make, enter 
into, and perform such contracts, grants, leases, coopera-
tive agreements, or other similar transactions with Fed-
eral or other public agencies (including State and local 
governments) and private organizations and persons, and 
make such payments, by way of advance or reimburse-
ment, as the Commission may determine necessary or ap-
propriate to carry out functions of the Commission. 
(d) REGIONAL AND FIELD OFFICES.—The Commis-
sion may establish, alter, discontinue, or maintain such 
regional or other field offices as the Commission may find 
necessary or appropriate to perform functions of the Com-
mission. 
(e) RESERVE FUND.—The Commission may obligate 
amounts in the Reserve Fund established under section 
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4(i) of the Securities Exchange Act of 1934 (15 U.S.C. 
78d(i)), not to exceed a total of $100,000,000 in any 1 
fiscal year, as the Commission determines is necessary to 
carry out the functions of the Commission, including those 
transferred by title II of this Act. Any amounts in the 
reserve fund shall remain available until expended. Not 
later than 10 days after the date on which the Commission 
obligates amounts under this subsection, the Commission 
shall notify Congress of the date, amount, and purpose 
of the obligation. 
TITLE IV—FEE AND FUNDING 
AUTHORITY 
SEC. 401. FUNDING AUTHORITY OF THE COMMISSION. 
(a) COMMODITY FUTURES TRADING COMMISSION.— 
Section 12 of the Commodity Exchange Act (7 U.S.C. 16) 
is amended— 
(1) in subsection (b)(1), by striking ‘‘and as 
may be from time to time appropriated for by Con-
gress’’; 
(2) by striking subsection (d); and 
(3) in subsection (f)(3), by striking ‘‘Any pay-
ment or reimbursement accepted shall be considered 
a reimbursement to the appropriated funds of the 
Commission.’’ and inserting ‘‘Such payments or re-
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imbursements shall be available to the Commission 
without further appropriation.’’. 
(b) SECURITIES AND EXCHANGE COMMISSION.—Sec-
tion 31 of the Securities Exchange Act of 1934 (15 U.S.C. 
78ee) is amended— 
(1) in subsection (a)— 
(A) in the heading for such subsection, by 
striking ‘‘RECOVERY OF COSTS OF ANNUAL AP-
PROPRIATION’’ and inserting ‘‘IN GENERAL’’; 
and 
(B) by striking ‘‘recover the costs to the 
Government of the annual appropriation to the 
Commission by Congress’’ and inserting ‘‘cover 
the costs to the Commission for the supervision 
and regulation of securities markets and securi-
ties professionals, and use such fees and assess-
ments without further appropriation’’; 
(2) by striking subsection (i); 
(3) in subsection (j)— 
(A) by striking ‘‘regular appropriation to 
the Commission by Congress’’ each place such 
term appears and inserting ‘‘target offsetting 
collection amount’’; and 
(B) by amending paragraph (4)(A) to read 
as follows: 
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‘‘(A) ANNUAL ADJUSTMENT.—An adjusted 
rate prescribed under paragraph (1) shall take 
effect on the first day of the fiscal year to 
which such rate applies.’’; and 
(4) by striking subsection (k). 
TITLE 
V—TRANSITIONAL, 
SAV-
INGS, 
AND 
CONFORMING 
PROVISIONS 
SEC. 501. SAVINGS PROVISIONS. 
(a) CONTINUITY OF LEGAL INSTRUMENTS.—All or-
ders, determinations, rules, regulations, permits, grants, 
contracts, certificates, licenses, and privileges— 
(1) which have been issued, made, granted, or 
allowed to become effective by the President, the Se-
curities and Exchange Commission, or the Com-
modity Futures Trading Commission, or any compo-
nent thereof, or by a court of competent jurisdiction, 
in the performance of functions which are trans-
ferred under this Act to the Commission, and 
(2) which are in effect at the time this Act 
takes effect, 
shall continue in effect according to their terms until 
modified, terminated, superseded, set aside, or revoked in 
accordance with the law by the President, the Commission, 
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or other authorized official, a court of competent jurisdic-
tion, or by operation of law. 
(b) CONTINUITY OF PROCEEDINGS.— 
(1) IN GENERAL.—The provisions of this Act 
shall not affect any proceedings, including notices of 
proposed rulemaking, or any application for any li-
cense, permit, certificate, or financial assistance 
pending on the effective date of this Act before ei-
ther the Securities and Exchange Commission or the 
Commodity Futures Trading Commission, or any 
component thereof, functions of which are trans-
ferred by this Act. Such proceedings and applica-
tions, to the extent that they relate to functions so 
transferred, shall be continued. Orders shall be 
issued in such proceedings, appeals shall be taken 
therefrom, and payments shall be made pursuant to 
such orders, as if this Act had not been enacted and 
orders issued in any such proceedings shall continue 
in effect until modified, terminated, superseded, or 
revoked by the Commission, by a court of competent 
jurisdiction, or by operation of law. Nothing in this 
subsection shall be construed to prohibit the dis-
continuance or modification of any such proceeding 
under the same terms and conditions and to the 
same extent that such proceeding could have been 
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discontinued or modified if this Act had not been en-
acted. 
(2) REGULATIONS CONCERNING TRANSFERS.— 
The Commission may prescribe regulations providing 
for the orderly transfer of proceedings continued 
under paragraph (1) to the Commission. 
(c) PENDING LITIGATION.—Except as provided in 
subsection (e)— 
(1) the provisions of this Act shall not affect 
suits commenced prior to the effective date of this 
Act; and 
(2) in all such suits, proceedings shall be had, 
appeals taken, and judgments rendered in the same 
manner and effect as if this Act had not been en-
acted. 
(d) NONABATEMENT.—No suit, action, or other pro-
ceeding commenced by or against any officer in the official 
capacity of such individual as an officer of the Securities 
and Exchange Commission or the Commodity Futures 
Trading Commission, or any component thereof, functions 
of which are transferred by this Act, shall abate by reason 
of the enactment of this Act. No cause of action by or 
against any department or agency, functions of which are 
transferred by this Act, or by or against any officer there-
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of in the official capacity of such officer shall abate by 
reason of the enactment of this Act. 
(e) SUBSTITUTION OF PARTIES.—If, before the date 
on which this Act takes effect, the Securities and Ex-
change Commission or the Commodity Futures Trading 
Commission, or any component thereof, or officer thereof 
in the official capacity of such officer, is a party to a suit, 
and under this Act any function of such department, agen-
cy, or officer is transferred to the Commission or any 
other official of the Commission, then such suit shall be 
continued with the Commission or other appropriate offi-
cial of the Commission substituted or added as a party. 
(f) JUDICIAL REVIEW AS REQUIRED BY EXISTING 
LAW.—Orders and actions of the Commission in the exer-
cise of functions transferred under this Act shall be sub-
ject to judicial review to the same extent and in the same 
manner as if such orders and actions had been by the 
agency or office, or part thereof, exercising such functions 
immediately preceding their transfer. Any statutory re-
quirements relating to notice, hearings, action upon the 
record, or administrative review that apply to any function 
transferred by this Act shall apply to the exercise of such 
function by the Commission. 
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(1) SECURITIES EXCHANGE ACT.—Sections 4(a) 
of the Securities Exchange Act of 1934 (15 U.S.C. 
78d(a)) is amended— 
(A) by striking ‘‘There is hereby estab-
lished a Securities and Exchange Commission 
(hereinafter referred to as the ‘Commission’) to 
be composed of five commissioners to be ap-
pointed by the President by and with the advice 
and consent of the Senate. Not more than three 
of such commissioners shall be members of the 
same political party, and in making appoint-
ments members of different political parties 
shall be appointed alternately as nearly as may 
be practicable.’’; and 
(B) by striking ‘‘Each commissioner shall 
hold office for a term of five years and until his 
successor is appointed and has qualified, except 
that he shall not so continue to serve beyond 
the expiration of the next session of Congress 
subsequent to the expiration of said fixed term 
of office, and except (1) any commissioner ap-
pointed to fill a vacancy occurring prior to the 
expiration of the term for which his predecessor 
was appointed shall be appointed for the re-
mainder of such term, and (2) the terms of of-
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fice of the commissioners first taking office 
after the enactment of this title shall expire as 
designated by the President at the time of nom-
ination, one at the end of one year, one at the 
end of two years, one at the end of three years, 
one at the end of four years, and one at the end 
of five years, after the date of the enactment of 
this title.’’. 
(2) COMMODITY EXCHANGE ACT.—Section 2(a) 
of the Commodity Exchange Act (7 U.S.C. 2a) is 
amended by striking paragraphs (2), (3), and (4). 
(3) DODD-FRANK.—Section 111(b)(1) of the 
Dodd-Frank Wall Street Reform and Consumer Pro-
tection Act (12 U.S.C. 5321(b)(1)) is amended— 
(A) by amending subparagraph (E) to read 
as follows: 
‘‘(E) the Chairperson of the Securities and 
Derivatives Commission;’’; 
(B) by striking subparagraph (G); and 
(C) by redesignating subparagraphs (H), 
(I), and (J) as subparagraphs (G), (H), and 
(I), respectively. 
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TITLE VI—EFFECTIVE DATE 
SEC. 601. EFFECTIVE DATE. 
The provisions of this Act shall take effect 1 year 
after the date of enactment of this Act, except that the 
President may nominate and the Senate confirm Commis-
sioners prior to such date. 
Æ 
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