investment company or by an affiliated registered in-
vestment company, in contravention of such rules as 
the Commission may adopt to define, and prescribe 
means reasonably necessary to prevent, such acts, 
practices, or courses of business as are fraudulent, 
deceptive or manipulative. 
‘‘(2) CODES
OF
ETHICS.—The rules adopted 
under paragraph (1) shall include requirements for 
the adoption of codes of ethics by a registered in-
vestment company and investment advisers of, and 
principal underwriters for, such investment compa-
nies establishing such standards as are reasonably 
necessary to prevent such acts, practices, or courses 
of business. Such rules and regulations shall require 
each such registered investment company to disclose 
such codes of ethics (and any changes therein) in 
the periodic report to shareholders of such company, 
and to disclose such code of ethics and any waivers 
and material violations thereof on a readily acces-
sible electronic public information facility of such 
company and in such additional form and manner as 
the Commission shall require by rule or regulation. 
‘‘(3) ADDITIONAL COMPLIANCE PROCEDURES.— 
The rules adopted under paragraph (1) shall—
‘‘(A) require each registered investment 
company and investment adviser to adopt and 
implement general policies and procedures rea-
sonably designed to prevent violations of this 
title, the Securities Act of 1933 (15 U.S.C. 78a 
et seq.), the Securities Exchange Act of 1934 
(15 U.S.C. 78a et seq.), the Sarbanes-Oxley Act 
of 2002 (15 U.S.C. 7201 et seq.) and amend-
ments made by that Act, the Trust Indenture 
Act of 1939 (15 U.S.C. 77aaa et seq.), the In-
vestment Advisers Act of 1940 (15 U.S.C. 80b 
et seq.), the Securities Investor Protection Act 
of 1970 (15 U.S.C. 78aaa et seq.), subchapter 
II of chapter 53 of title 31, United States Code, 
chapter 2 of title I of Public Law 91–508 (12 
U.S.C. 1951 et seq.), or section 21 of the Fed-
eral Deposit Insurance Act (12 U.S.C. 1829b); 
‘‘(B) require each registered investment 
company and registered investment adviser to 
review such policies and procedures annually for 
their adequacy and the effectiveness of their im-
plementation; and 
‘‘(C) require each registered investment 
company to appoint a chief compliance officer
to be responsible for overseeing such policies 
and procedures— 
‘‘(i) whose compensation shall be ap-
proved by the members of the board of di-
rectors of the company who are not inter-
ested persons of the company; 
‘‘(ii) who shall report directly to the 
members of the board of directors of the 
company who are not interested persons of 
such company, privately as such members 
request, but not less frequently than annu-
ally; and 
‘‘(iii) whose report to such members 
shall include any violations or waivers of, 
and any other significant issues arising 
under, such policies and procedures. 
‘‘(4) 
CERTIFICATIONS.—The 
rules 
adopted 
under paragraph (1) shall require each senior execu-
tive officer, or such officers designated by the Com-
mission, of an investment adviser of a registered in-
vestment company to certify in each periodic report 
to shareholders, or other appropriate disclosure doc-
ument, that— 
‘‘(A) procedures are in place for verifying 
that the determination of current net asset
value of any redeemable security issued by the 
company used in computing periodically the 
current price for the purpose of purchase, re-
demption, and sale complies with the require-
ments of this title and the rules and regulations 
issued under this title, and the company is in 
compliance with such procedures; 
‘‘(B) procedures are in place to ensure 
that, if the shares of the company are offered 
as different classes of shares, such classes are 
designed in the interests of shareholders, and 
could reasonably be an appropriate investment 
option for a shareholder; 
‘‘(C) procedures are in place to ensure that 
information about the portfolio securities of the 
company is not disclosed in violation of the se-
curities laws or the code of ethics of the com-
pany; 
‘‘(D) the members of the board of directors 
who are not interested persons of the company 
have reviewed and approved the compensation 
of the portfolio manager of the company in con-
nection with their consideration of the invest-
ment advisory contract under section 15(c); and
‘‘(E) the company has established and en-
forces a code of ethics, as required by para-
graph (2).’’. 
(b) 
WHISTLEBLOWER
PROTECTION.—Section 
1514A(a) of title 18, United States Code, is amended by 
striking the matter preceding paragraph (1) and inserting 
the following: 
‘‘(a) WHISTLEBLOWER PROTECTION FOR EMPLOY-
EES OF PUBLICLY TRADED COMPANIES AND REGISTERED 
INVESTMENT COMPANIES.—No company with a class of 
securities registered under section 12 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78l), or that is required 
to file reports under section 15(d) of the Securities and 
Exchange Act of 1934 (15 U.S.C. 78o(d)), or that is an 
investment adviser, principal underwriter, or significant 
service provider (as such terms are defined under section 
2(a) of the Investment Company Act of 1940 (15 U.S.C. 
80a–2(a)) of an investment company which is registered 
under section 8 of the Investment Company Act of 1940, 
or any officer, employee, contractor, subcontractor, or 
agent of such company, may discharge, demote, suspend, 
threaten, harass, or in any other manner discriminate 
against an employee in the terms and conditions of em-
ployment because of any lawful act done by the em-
ployee—’’.
TITLE II—FUND TRANSPARENCY 
SEC. 201. COST CONSOLIDATION AND CLARITY. 
(a) EXPENSE RATIO COMPUTATION.— 
(1) IN GENERAL.—The Commission shall, by 
rule, develop a standardized method of calculating 
the expense ratio of a registered investment com-
pany that accounts for as many operating costs to 
shareholders of such companies as is practicable. 
(2) SEPARATE
DISCLOSURES.—In developing 
the method of calculation required under paragraph 
(1), if the Commission determines that the inclusion 
of certain costs in such calculation will lead to a sig-
nificant risk of confusing or misleading shareholders, 
the Commission shall develop separate standardized 
methods for the calculation and disclosure of such 
costs. 
(b) TRANSACTION COST RATIO.—The Commission 
shall, by rule, develop a standardized method of computing 
the transaction cost ratio of a registered investment com-
pany that practicably and fairly accounts for actual trans-
action costs to shareholders, including, at a minimum, bro-
kerage commissions and bid-ask spread costs. Such com-
putation, if necessary for ease of administration, may be 
based upon a fair method of estimation or a standardized 
derivation from easily ascertainable information.
(c) DISCLOSURE OF EXPENSE RATIO AND TRANS-
ACTION COST RATIO.—The Commission shall, by rule, re-
quire the prominent disclosure of the expense ratio and 
the transaction cost ratio of a registered company, both 
separately and as a total investment cost ratio, in— 
(1) each annual report of the registered invest-
ment company; 
(2) any prospectus of the registered investment 
company, as part of a fee table; and 
(3) such other filings with the Commission as 
the Commission determines appropriate. 
(d) ACTUAL COST DISCLOSURE.—The Commission 
shall, by rule, require, on at least an annual basis, the 
prominent disclosure in the shareholder account statement 
of a registered investment company of the actual dollar 
amount of the projected annual costs of each shareholder 
of the company, based upon the asset value of the share-
holder at the time of the disclosure. 
(e) DEFINITION OF FEES AND EXPENSES.— 
(1) IN GENERAL.—The Commission shall, by 
rule, define all specific allowable types or categories 
of fees and expenses that may be borne by the 
shareholders of a registered investment company. 
(2) NEW FEES AND EXPENSES.—No new fee or 
expense, other than any defined under paragraph