282 
(f) COMMODITY FUTURES TRADING COMMISSION RE-
QUIREMENTS.—Section 2 of the Commodity Exchange Act 
(7 U.S.C. 2) is amended by adding at the end the following: 
‘‘(k) INTERNATIONAL PROCESSES.— 
‘‘(1) NOTICE OF PROCESS; CONSULTATION.—At 
least 30 calendar days before the Commission partici-
pates in a process of setting financial standards as a 
part of any foreign or multinational entity, the Com-
mission shall— 
‘‘(A) issue a notice of the process, including 
the subject matter, scope, and goals of the proc-
ess, to— 
‘‘(i) the Committees on Financial Serv-
ices and Agriculture of the House of Rep-
resentatives; and 
‘‘(ii) the Committees on Banking, 
Housing, and Urban Affairs and Agri-
culture, Nutrition, and Forestry of the Sen-
ate; 
‘‘(B) make such notice available to the pub-
lic, including on the website of the Commission; 
and 
‘‘(C) solicit public comment, and consult 
with the committees described under subpara-
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graph (A), with respect to the subject matter, 
scope, and goals of the process. 
‘‘(2) PUBLIC REPORTS ON PROCESS.—After the 
end of any process described under paragraph (1), the 
Commission shall issue a public report on the topics 
that were discussed during the process and any new 
or revised rulemakings or policy changes that the 
Commission believes should be implemented as a re-
sult of the process. 
‘‘(3) NOTICE OF AGREEMENTS; CONSULTATION.— 
At least 90 calendar days before the Commission par-
ticipates in a process of setting financial standards as 
a part of any foreign or multinational entity, the 
Commission shall— 
‘‘(A) issue a notice of agreement to— 
‘‘(i) the Committees on Financial Serv-
ices and Agriculture of the House of Rep-
resentatives; and 
‘‘(ii) the Committees on Banking, 
Housing, and Urban Affairs and Agri-
culture, Nutrition, and Forestry of the Sen-
ate; 
‘‘(B) make such notice available to the pub-
lic, including on the website of the Commission; 
and 
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‘‘(C) consult with the committees described 
under subparagraph (A) with respect to the na-
ture of the agreement and any anticipated effects 
such agreement will have on the economy. 
‘‘(4) DEFINITION.—For purposes of this sub-
section, the term ‘process’ shall include any official 
proceeding or meeting on financial regulation of a 
recognized international organization with authority 
to set financial standards on a global or regional 
level, including the Financial Stability Board, the 
Basel Committee on Banking Supervision (or a simi-
lar organization), and the International Association 
of Insurance Supervisors (or a similar organiza-
tion).’’. 
TITLE VII—FED OVERSIGHT 
REFORM AND MODERNIZATION 
SEC. 701. REQUIREMENTS FOR POLICY RULES OF THE FED-
ERAL 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 defi-
nitions shall apply: 
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‘‘(1) APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘appropriate congressional commit-
tees’ means the Committee on Financial Services of 
the House of Representatives and the Committee on 
Banking, Housing, and Urban Affairs of the Senate. 
‘‘(2) DIRECTIVE POLICY RULE.—The term ‘Direc-
tive Policy Rule’ means a policy rule developed by the 
Federal Open Market Committee that meets the re-
quirements of subsection (c) and that provides the 
basis for the Open Market Operations Directive. 
‘‘(3) GDP.—The term ‘GDP’ means the gross do-
mestic 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 nec-
essary input to guide open-market operations; 
‘‘(B) shall include an estimate of, and the 
method of calculation for, the current rate of in-
flation 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— 
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‘‘(i) an estimate of real GDP, nominal 
GDP, or potential GDP; 
‘‘(ii) an estimate of the monetary ag-
gregate compiled by the Board of Governors 
of the Federal Reserve System and Federal 
reserve banks; or 
‘‘(iii) an interactive variable or a net 
estimate composed of the estimates described 
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 pursu-
ant to powers authorized under section 14 of this Act 
that guide open-market operations. 
‘‘(7) POLICY INSTRUMENT.—The term ‘Policy In-
strument’ means— 
‘‘(A) the nominal Federal funds rate; 
‘‘(B) the nominal rate of interest paid on 
nonborrowed reserves; or 
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287 
‘‘(C) the discount window primary credit 
interest rate most recently published on the Fed-
eral Reserve Statistical Release on selected inter-
est rates (daily or weekly), commonly referred to 
as the H.15 release. 
‘‘(8) POLICY
INSTRUMENT
TARGET.—The term 
‘Policy Instrument Target’ means the target for the 
Policy Instrument specified in the Open Market Oper-
ations Directive. 
‘‘(9) REFERENCE POLICY RULE.—The term ‘Ref-
erence Policy Rule’ means a calculation of the nomi-
nal Federal funds rate as equal to the sum of the fol-
lowing: 
‘‘(A) The rate of inflation over the previous 
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 Federal 
Open Market Committee, the Chairman of the Federal Open 
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288 
Market Committee shall submit to the appropriate congres-
sional committees and the Comptroller General of the 
United States a Directive Policy Rule and a statement that 
identifies the members of the Federal Open Market Com-
mittee who voted in favor of the Rule. 
‘‘(c) REQUIREMENTS
FOR
A
DIRECTIVE
POLICY 
RULE.—A Directive Policy Rule shall— 
‘‘(1) identify the Policy Instrument the Directive 
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 In-
puts; 
‘‘(3) include a function that comprehensively 
models the interactive relationship between the Inter-
mediate Policy Inputs; 
‘‘(4) include the coefficients of the Directive Pol-
icy Rule that generate the current Policy Instrument 
Target and a range of predicted future values for the 
Policy Instrument Target if changes occur in any In-
termediate Policy Input; 
‘‘(5) describe the procedure for adjusting the sup-
ply of bank reserves to achieve the Policy Instrument 
Target; 
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289 
‘‘(6) include a statement as to whether the Direc-
tive Policy Rule substantially conforms to the Ref-
erence Policy Rule and, if applicable— 
‘‘(A) an explanation of the extent to which 
it departs from the Reference Policy Rule; 
‘‘(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 such Rule is ex-
pected to support the economy in achieving stable 
prices and maximum natural employment 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-
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290 
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 Federal Open 
Market Committee, prepare and submit a compliance report 
to the appropriate congressional committees specifying 
whether the Directive Policy Rule submitted after that meet-
ing and the Federal Open Market Committee are in compli-
ance 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 adjustment of 
the Policy Instrument Target described under sub-
section (c)(2) be implemented if the Federal Open 
Market Committee determines that such plans cannot 
or should not be achieved due to changing market con-
ditions. 
‘‘(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 deter-
mination 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 determina-
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291 
tion. The Comptroller General shall, not later than 48 
hours after receiving such updated version, prepare 
and submit to the appropriate congressional commit-
tees a compliance report determining whether such 
updated version and the Federal Open Market Com-
mittee 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 Committee are not 
in compliance with this section in the report sub-
mitted pursuant to subsection (d), or that the updated 
version of the Directive Policy Rule and the Federal 
Open Market Committee are not in compliance with 
this section in the report submitted pursuant to sub-
section (e)(2), the Chairman of the Board of Gov-
ernors of the Federal Reserve System shall, if re-
quested 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. 
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292 
‘‘(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 pe-
riod of 7 legislative days described in paragraph (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 Market 
Committee upon request of the appropriate congres-
sional committee. Such committee may specify the pa-
rameters 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 appropriate 
congressional committees and not later than 7 legislative 
days after such request, appear before such committee to ex-
plain any change to the Directive Policy Rule.’’. 
SEC. 702. FEDERAL OPEN MARKET COMMITTEE BLACKOUT 
PERIOD. 
Section 12A of the Federal Reserve Act (12 U.S.C. 263) 
is amended by adding at the end the following new sub-
section: 
‘‘(d) BLACKOUT PERIOD.— 
‘‘(1) IN GENERAL.—During a blackout period, 
the only public communications that may be made by 
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293 
members and staff of the Committee with respect to 
macroeconomic or financial developments or about 
current or prospective monetary policy issues are the 
following: 
‘‘(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 specific 
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 meeting 
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 pro-
hibit the Chairman of the Board of Governors of the 
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294 
Federal Reserve System from participating in or 
issuing public communications.’’. 
SEC. 703. 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 Reserve 
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 directors 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 Reserve Banks of Minneapolis 
and Kansas City; and one by the boards of directors 
of the Federal Reserve Banks of Dallas and San 
Francisco.’’; and 
(3) by inserting after the second sentence the fol-
lowing: ‘‘In odd numbered calendar years, one rep-
resentative shall be elected from each of the Federal 
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Reserve Banks of Boston, Philadelphia, Richmond, 
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. 704. 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 ‘‘Feb-
ruary 20’’ each place it appears. 
(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 inserting ‘‘quar-
terly’’. 
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296 
SEC. 705. 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 Supervision is va-
cant, the Vice Chairman for the Board of Governors 
of the Federal Reserve System (who has the responsi-
bility to serve in the absence of the Chairman) shall 
appear instead and provide the required written testi-
mony. If, at the time of any appearance described in 
this paragraph, both Vice Chairman positions are va-
cant, the Chairman of the Board of Governors of the 
Federal Reserve System shall appear instead and pro-
vide the required written testimony.’’. 
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297 
SEC. 706. SALARIES, FINANCIAL DISCLOSURES, AND OFFICE 
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 adding at the end the following new sub-
sections: 
‘‘(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 mem-
bers and employees of the Board of Governors of the 
Federal Reserve System shall— 
‘‘(A) disclose all brokerage accounts that 
they maintain, as well as those in which they 
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298 
control trading or have a financial interest (in-
cluding managed accounts, trust accounts, in-
vestment club accounts, and the 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 their 
brokers and dealers to send duplicate 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 Re-
serve System shall be subject to the prohibitions re-
lated to outside employment and activities described 
under section 4401.103(c) of title 5, Code of Federal 
Regulations, to the same extent as such prohibitions 
apply to an employee of the Securities and Exchange 
Commission. 
‘‘(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 Man-
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300 
‘‘(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 mem-
ber and the salaries of such individuals set by such member. 
A member may employ additional individuals as deter-
mined necessary by the Board of Governors.’’. 
SEC. 707. 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 221, 
is further amended— 
(1) in subparagraph (A)— 
(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)— 
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301 
(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 sentence, the 
Board shall, by rule, establish— 
‘‘(I) a method for determining the 
sufficiency of the collateral required 
under this paragraph; 
‘‘(II) acceptable classes of collat-
eral; 
‘‘(III) the amount of any discount 
of such value that the Federal reserve 
banks will apply for purposes of calcu-
lating the sufficiency of collateral 
under this paragraph; and 
‘‘(IV) a method for obtaining 
independent appraisals of the value of 
collateral the Federal reserve banks re-
ceive.’’; and 
(B) in clause (ii)— 
(i) by striking the second sentence; and 
(ii) by inserting after the first sentence 
the following: ‘‘A borrower shall not be eligi-
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ble to borrow from any emergency lending 
program or facility unless the Board and 
all federal banking regulators with jurisdic-
tion over the borrower certify that, at the 
time the borrower initially borrows 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 
subparagraph, the Board shall, with respect 
to a recipient of any loan or other financial 
assistance under this paragraph, establish 
by rule a minimum interest rate on the 
principal amount of any loan or other fi-
nancial assistance. 
‘‘(ii) MINIMUM
INTEREST
RATE
DE-
FINED.—In this subparagraph, the term 
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303 
‘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 difference 
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 re-
cent 90-day period. 
‘‘(F) FINANCIAL INSTITUTION PARTICIPANT 
DEFINED.—For purposes of this paragraph, the 
term ‘financial institution participant’— 
‘‘(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, 
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304 
or an entity controlled or sponsored by such 
an agency.’’. 
(b) CONFORMING AMENDMENT.—Section 11(r)(2)(A) 
of such Act 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.’’. 
SEC. 708. 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’’. 
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SEC. 709. 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 annually 
complete an audit of the Board of Governors of the Federal 
Reserve System and the Federal reserve banks under sub-
section (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 minority 
leaders of the House of Representatives, the ma-
jority 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 requests the 
report. 
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(2) CONTENTS.—The report under paragraph (1) 
shall include a detailed description of the findings 
and conclusion of the Comptroller General with re-
spect to the audit that is the subject of the report, to-
gether 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 amend-
ed 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 in-
serting ‘‘section 13(3)’’; and 
(C) by striking subsection (f). 
(2) FEDERAL RESERVE ACT.—Subsection (s) (re-
lating to ‘‘Federal Reserve Transparency and Release 
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 
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title 31, United States Code’’ and inserting 
‘‘means a program or facility, including any 
special purpose vehicle or other entity established 
by or on behalf of the Board of Governors of the 
Federal Reserve System or a Federal reserve 
bank, authorized by the Board of Governors 
under section 13(3), that is not subject 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 in-
serting ‘‘the information described in paragraph 
(1)’’; and 
(C) in paragraph (7), by striking ‘‘and sec-
tion 13(3)(C), section 714(f)(3)(C) of title 31, 
United States Code, and’’ and inserting ‘‘, sec-
tion 13(3)(C), and’’. 
SEC. 710. 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’’. 
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(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 recommendations 
of the National Monetary Commission, Congress cre-
ated the Federal Reserve System in 1913. As cur-
rently 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 stock-
holders of the 12 Federal Reserve Banks include na-
tional and certain State-chartered commercial banks, 
which operate on a fractional reserve basis. 
(4) Originally, Congress gave the Federal Re-
serve System a monetary mandate to provide an elas-
tic currency, within the context of a gold standard, in 
response to seasonal fluctuations in the demand for 
currency. 
(5) Congress also gave the Federal Reserve Sys-
tem a financial stability mandate to serve as the 
lender of last resort to solvent but illiquid banks dur-
ing a financial crisis. 
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(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 countries, 
demonstrate that price stability is desirable because 
both inflation and deflation damage the economy. 
(8) The economic challenge of recent years—most 
notably the bursting of the housing bubble, the finan-
cial crisis of 2008, and the ensuing anemic recov-
ery—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 
to place the financial system on a stronger, more sus-
tainable path going forward. 
(10) The Federal Reserve System has taken ex-
traordinary actions in response to the recent economic 
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-
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suing a policy of credit allocation by purchasing Fed-
eral 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 pol-
icy in the 21st century. 
(b) ESTABLISHMENT OF A CENTENNIAL MONETARY 
COMMISSION.—There is established a commission to be 
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, employment, prices, 
and financial stability over time; 
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(B) evaluate various operational regimes 
under which the Board of Governors of the Fed-
eral Reserve System and the Federal Open Mar-
ket Committee may conduct monetary policy in 
terms achieving the maximum sustainable level 
of output and employment and price stability 
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 
(vi) the gold standard; 
(C) evaluate the use of macro-prudential su-
pervision and regulation as a tool of monetary 
policy in terms of achieving the maximum sus-
tainable level of output and employment and 
price stability over the long term; 
(D) evaluate the use of the lender-of-last-re-
sort function of the Board of Governors of the 
Federal Reserve System as a tool of monetary 
policy in terms of achieving the maximum sus-
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312 
tainable 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 market 
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; 
(ii) Federal Reserve actions; and 
(iii) Federal debt. 
(2) REPORT.—Not later than December 1, 2017, 
the Commission shall submit to Congress and make 
publicly available a report containing a statement of 
the findings and conclusions of the Commission in 
carrying out the study under paragraph (1), together 
with the recommendations the Commission considers 
appropriate. In making such report, the Commission 
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shall specifically report on the considerations required 
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 
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 Chairman. 
(C) NON-VOTING MEMBERS.—The Commis-
sion shall contain 2 non-voting members as fol-
lows: 
(i) One member appointed by the Sec-
retary of the Treasury. 
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(ii) One member who is the president 
of a district Federal reserve bank appointed 
by the Chair of the Board of Governors 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. 
(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 Commission 
shall meet upon the call of the Chair or a major-
ity of its members. 
(6) QUORUM.—Seven voting members of the 
Commission shall constitute a quorum but a lesser 
number may hold hearings. 
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315 
(7) MEMBER OF CONGRESS DEFINED.—In this 
subsection, the term ‘‘Member of Congress’’ means a 
Senator or a Representative in, or Delegate or Resi-
dent Commissioner to, the Congress. 
(e) POWERS.— 
(1) HEARINGS AND SESSIONS.—The Commission 
or, on the authority of the Commission, any sub-
committee or member thereof, may, for the purpose 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 sub-
committee or member thereof considers appropriate. 
(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 de-
partment, bureau, agency, board, commission, of-
fice, independent establishment, or instrumen-
tality of the Government, any information, in-
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316 
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 establishment, or 
instrumentality of the government shall, to the 
extent authorized by law, furnish such informa-
tion upon request made by— 
(i) the Chair; 
(ii) the Chair of any subcommittee cre-
ated by a majority of the Commission; or 
(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 serv-
ices 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 Com-
mission, departments and agencies of the United 
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317 
States shall provide such services, funds, facili-
ties, 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.— 
(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 ap-
pointed without regard to the provisions of title 
5, United States Code, governing appointments 
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 re-
lating to classification and General Schedule pay 
rates, except that an individual so appointed 
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318 
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 de-
partment or agency may detail, on a reimbursable 
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 on June 1, 2017. 
(2) ADMINISTRATIVE ACTIVITIES BEFORE TERMI-
NATION.—The Commission may use the period be-
tween the submission of its report and its termination 
for the purpose of concluding its activities, including 
providing testimony to the committee of Congress con-
cerning its report. 
(h) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to carry out this section 
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$1,000,000, which shall remain available until the date on 
which the Commission terminates. 
SEC. 711. PUBLIC TRANSCRIPTS OF FOMC MEETINGS. 
Section 12A of the Federal Reserve Act (12 U.S.C. 
263), as amended by this Act, is further amended by adding 
at the end the following: 
‘‘(e) PUBLIC TRANSCRIPTS OF MEETINGS.—The Com-
mittee shall— 
‘‘(1) record all meetings of the Committee; and 
‘‘(2) make the full transcript of such meetings 
available to the public.’’. 
TITLE 
VIII—DEMANDING 
AC-
COUNTABILITY 
FROM 
WALL 
STREET 
Subtitle A—SEC Penalties 
Modernization 
SEC. 801. ENHANCEMENT OF CIVIL PENALTIES FOR SECURI-
TIES LAWS VIOLATIONS. 
(a) UPDATED CIVIL MONEY PENALTIES.— 
(1) SECURITIES ACT OF 1933.— 
(A) MONEY PENALTIES IN ADMINISTRATIVE 
ACTIONS.—Section 8A(g)(2) of the Securities Act 
of 1933 (15 U.S.C. 77h–1(g)(2)) is amended— 
(i) in subparagraph (A)— 
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(I) by striking ‘‘$7,500’’ and in-
serting ‘‘$10,000’’; and 
(II) by striking ‘‘$75,000’’ and in-
serting ‘‘$100,000’’; 
(ii) in subparagraph (B)— 
(I) by striking ‘‘$75,000’’ and in-
serting ‘‘$100,000’’; and 
(II) by striking ‘‘$375,000’’ and 
inserting ‘‘$500,000’’; and 
(iii) by striking subparagraph (C) and 
inserting the following: 
‘‘(C) THIRD TIER.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A) and (B), the amount of 
penalty for each such act or omission shall 
not exceed the amount specified in clause 
(ii) if— 
‘‘(I) the act or omission described 
in paragraph (1) involved fraud, de-
ceit, manipulation, or deliberate or 
reckless disregard of a regulatory re-
quirement; and 
‘‘(II) such act or omission directly 
or indirectly resulted in— 
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321 
‘‘(aa) substantial losses or 
created a significant risk of sub-
stantial losses to other persons; or 
‘‘(bb) substantial pecuniary 
gain to the person who committed 
the act or omission. 
‘‘(ii) MAXIMUM
AMOUNT
OF
PEN-
ALTY.—The amount referred to in clause (i) 
is the greatest of— 
‘‘(I) $300,000 for a natural per-
son or $1,450,000 for any other person; 
‘‘(II) 3 times the gross amount of 
pecuniary gain to the person who com-
mitted the act or omission; or 
‘‘(III) the amount of losses in-
curred by victims as a result of the act 
or omission.’’. 
(B) MONEY PENALTIES IN CIVIL ACTIONS.— 
Section 20(d)(2) of the Securities Act of 1933 (15 
U.S.C. 77t(d)(2)) is amended— 
(i) in subparagraph (A)— 
(I) by striking ‘‘$5,000’’ and in-
serting ‘‘$10,000’’; and 
(II) by striking ‘‘$50,000’’ and in-
serting ‘‘$100,000’’; 
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322 
(ii) in subparagraph (B)— 
(I) by striking ‘‘$50,000’’ and in-
serting ‘‘$100,000’’; and 
(II) by striking ‘‘$250,000’’ and 
inserting ‘‘$500,000’’; and 
(iii) by striking subparagraph (C) and 
inserting the following: 
‘‘(C) THIRD TIER.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A) and (B), the amount of 
penalty for each such violation shall not ex-
ceed the amount specified in clause (ii) if— 
‘‘(I) the violation described in 
paragraph (1) involved fraud, deceit, 
manipulation, or deliberate or reckless 
disregard of a regulatory requirement; 
and 
‘‘(II) such violation directly or in-
directly resulted in substantial losses 
or created a significant risk of substan-
tial losses to other persons. 
‘‘(ii) MAXIMUM
AMOUNT
OF
PEN-
ALTY.—The amount referred to in clause (i) 
is the greatest of— 
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‘‘(I) $300,000 for a natural per-
son or $1,450,000 for any other person; 
‘‘(II) 3 times the gross amount of 
pecuniary gain to such defendant as a 
result of the violation; or 
‘‘(III) the amount of losses in-
curred by victims as a result of the vio-
lation.’’. 
(2) SECURITIES EXCHANGE ACT OF 1934.— 
(A) MONEY PENALTIES IN CIVIL ACTIONS.— 
Section 21(d)(3)(B) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78u(d)(3)(B)) is amend-
ed— 
(i) in clause (i)— 
(I) by striking ‘‘$5,000’’ and in-
serting ‘‘$10,000’’; and 
(II) by striking ‘‘$50,000’’ and in-
serting ‘‘$100,000’’; 
(ii) in clause (ii)— 
(I) by striking ‘‘$50,000’’ and in-
serting ‘‘$100,000’’; and 
(II) by striking ‘‘$250,000’’ and 
inserting ‘‘$500,000’’; and 
(iii) by striking clause (iii) and insert-
ing the following: 
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‘‘(iii) THIRD TIER.— 
‘‘(I) IN
GENERAL.—Notwithstanding 
clauses (i) and (ii), the amount of penalty 
for each such violation shall not exceed the 
amount specified in subclause (II) if— 
‘‘(aa) the violation described in 
subparagraph (A) involved fraud, de-
ceit, manipulation, or deliberate or 
reckless disregard of a regulatory re-
quirement; and 
‘‘(bb) such violation directly or 
indirectly resulted in substantial losses 
or created a significant risk of substan-
tial losses to other persons. 
‘‘(II) MAXIMUM
AMOUNT
OF
PEN-
ALTY.—The amount referred to in subclause 
(I) is the greatest of— 
‘‘(aa) $300,000 for a natural per-
son or $1,450,000 for any other person; 
‘‘(bb) 3 times the gross amount of 
pecuniary gain to such defendant as a 
result of the violation; or 
‘‘(cc) the amount of losses in-
curred by victims as a result of the vio-
lation.’’. 
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326 
‘‘(ii) such act or omission directly or 
indirectly resulted in substantial losses or 
created a significant risk of substantial 
losses to other persons or resulted in sub-
stantial pecuniary gain to the person who 
committed the act or omission. 
‘‘(B) MAXIMUM AMOUNT OF PENALTY.—The 
amount referred to in subparagraph (A) is the 
greatest of— 
‘‘(i) $300,000 for a natural person or 
$1,450,000 for any other person; 
‘‘(ii) 3 times the gross amount of pecu-
niary gain to the person who committed the 
act or omission; or 
‘‘(iii) the amount of losses incurred by 
victims as a result of the act or omission.’’. 
(3) INVESTMENT COMPANY ACT OF 1940.— 
(A) MONEY PENALTIES IN ADMINISTRATIVE 
ACTIONS.—Section 9(d)(2) of the Investment 
Company Act of 1940 (15 U.S.C. 80a–9(d)(2)) is 
amended— 
(i) in subparagraph (A)— 
(I) by striking ‘‘$5,000’’ and in-
serting ‘‘$10,000’’; and 
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327 
(II) by striking ‘‘$50,000’’ and in-
serting ‘‘$100,000’’; 
(ii) in subparagraph (B)— 
(I) by striking ‘‘$50,000’’ and in-
serting ‘‘$100,000’’; and 
(II) by striking ‘‘$250,000’’ and 
inserting ‘‘$500,000’’; and 
(iii) by striking subparagraph (C) and 
inserting the following: 
‘‘(C) THIRD TIER.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A) and (B), the amount of 
penalty for each such act or omission shall 
not exceed the amount specified in clause 
(ii) if— 
‘‘(I) the act or omission described 
in paragraph (1) involved fraud, de-
ceit, manipulation, or deliberate or 
reckless disregard of a regulatory re-
quirement; and 
‘‘(II) such act or omission directly 
or indirectly resulted in substantial 
losses or created a significant risk of 
substantial losses to other persons or 
resulted in substantial pecuniary gain 
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328 
to the person who committed the act or 
omission. 
‘‘(ii) MAXIMUM
AMOUNT
OF
PEN-
ALTY.—The amount referred to in clause (i) 
is the greatest of— 
‘‘(I) $300,000 for a natural per-
son or $1,450,000 for any other person; 
‘‘(II) 3 times the gross amount of 
pecuniary gain to the person who com-
mitted the act or omission; or 
‘‘(III) the amount of losses in-
curred by victims as a result of the act 
or omission.’’. 
(B) MONEY PENALTIES IN CIVIL ACTIONS.— 
Section 42(e)(2) of the Investment Company Act 
of 1940 (15 U.S.C. 80a–41(e)(2)) is amended— 
(i) in subparagraph (A)— 
(I) by striking ‘‘$5,000’’ and in-
serting ‘‘$10,000’’; and 
(II) by striking ‘‘$50,000’’ and in-
serting ‘‘$100,000’’; 
(ii) in subparagraph (B)— 
(I) by striking ‘‘$50,000’’ and in-
serting ‘‘$100,000’’; and 
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329 
(II) by striking ‘‘$250,000’’ and 
inserting ‘‘$500,000’’; and 
(iii) by striking subparagraph (C) and 
inserting the following: 
‘‘(C) THIRD TIER.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A) and (B), the amount of 
penalty for each such violation shall not ex-
ceed the amount specified in clause (ii) if— 
‘‘(I) the violation described in 
paragraph (1) involved fraud, deceit, 
manipulation, or deliberate or reckless 
disregard of a regulatory requirement; 
and 
‘‘(II) such violation directly or in-
directly resulted in substantial losses 
or created a significant risk of substan-
tial losses to other persons. 
‘‘(ii) MAXIMUM
AMOUNT
OF
PEN-
ALTY.—The amount referred to in clause (i) 
is the greatest of— 
‘‘(I) $300,000 for a natural per-
son or $1,450,000 for any other person; 
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330 
‘‘(II) 3 times the gross amount of 
pecuniary gain to such defendant as a 
result of the violation; or 
‘‘(III) the amount of losses in-
curred by victims as a result of the vio-
lation.’’. 
(4) INVESTMENT ADVISERS ACT OF 1940.— 
(A) MONEY PENALTIES IN ADMINISTRATIVE 
ACTIONS.—Section 203(i)(2) of the Investment 
Advisers Act of 1940 (15 U.S.C. 80b–3(i)(2)) is 
amended— 
(i) in subparagraph (A)— 
(I) by striking ‘‘$5,000’’ and in-
serting ‘‘$10,000’’; and 
(II) by striking ‘‘$50,000’’ and in-
serting ‘‘$100,000’’; 
(ii) in subparagraph (B)— 
(I) by striking ‘‘$50,000’’ and in-
serting ‘‘$100,000’’; and 
(II) by striking ‘‘$250,000’’ and 
inserting ‘‘$500,000’’; and 
(iii) by striking subparagraph (C) and 
inserting the following: 
‘‘(C) THIRD TIER.— 
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331 
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A) and (B), the amount of 
penalty for each such act or omission shall 
not exceed the amount specified in clause 
(ii) if— 
‘‘(I) the act or omission described 
in paragraph (1) involved fraud, de-
ceit, manipulation, or deliberate or 
reckless disregard of a regulatory re-
quirement; and 
‘‘(II) such act or omission directly 
or indirectly resulted in substantial 
losses or created a significant risk of 
substantial losses to other persons or 
resulted in substantial pecuniary gain 
to the person who committed the act or 
omission. 
‘‘(ii) MAXIMUM
AMOUNT
OF
PEN-
ALTY.—The amount referred to in clause (i) 
is the greatest of— 
‘‘(I) $300,000 for a natural per-
son or $1,450,000 for any other person; 
‘‘(II) 3 times the gross amount of 
pecuniary gain to the person who com-
mitted the act or omission; or 
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332 
‘‘(III) the amount of losses in-
curred by victims as a result of the act 
or omission.’’. 
(B) MONEY PENALTIES IN CIVIL ACTIONS.— 
Section 209(e)(2) of the Investment Advisers Act 
of 1940 (15 U.S.C. 80b–9(e)(2)) is amended— 
(i) in subparagraph (A)— 
(I) by striking ‘‘$5,000’’ and in-
serting ‘‘$10,000’’; and 
(II) by striking ‘‘$50,000’’ and in-
serting ‘‘$100,000’’; 
(ii) in subparagraph (B)— 
(I) by striking ‘‘$50,000’’ and in-
serting ‘‘$100,000’’; and 
(II) by striking ‘‘$250,000’’ and 
inserting ‘‘$500,000’’; and 
(iii) by striking subparagraph (C) and 
inserting the following: 
‘‘(C) THIRD TIER.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A) and (B), the amount of 
penalty for each such violation shall not ex-
ceed the amount specified in clause (ii) if— 
‘‘(I) the violation described in 
paragraph (1) involved fraud, deceit, 
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333 
manipulation, or deliberate or reckless 
disregard of a regulatory requirement; 
and 
‘‘(II) such violation directly or in-
directly resulted in substantial losses 
or created a significant risk of substan-
tial losses to other persons. 
‘‘(ii) MAXIMUM
AMOUNT
OF
PEN-
ALTY.—The amount referred to in clause (i) 
is the greatest of— 
‘‘(I) $300,000 for a natural per-
son or $1,450,000 for any other person; 
‘‘(II) 3 times the gross amount of 
pecuniary gain to such defendant as a 
result of the violation; or 
‘‘(III) the amount of losses in-
curred by victims as a result of the vio-
lation.’’. 
(b) PENALTIES FOR RECIDIVISTS.— 
(1) SECURITIES ACT OF 1933.— 
(A) MONEY PENALTIES IN ADMINISTRATIVE 
ACTIONS.—Section 8A(g)(2) of the Securities Act 
of 1933 (15 U.S.C. 77h–1(g)(2)) is amended by 
adding at the end the following: 
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335 
any Commission action alleging fraud by that 
defendant.’’. 
(2) SECURITIES EXCHANGE ACT OF 1934.— 
(A) MONEY PENALTIES IN CIVIL ACTIONS.— 
Section 21(d)(3)(B) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78u(d)(3)(B)) is amended 
by adding at the end the following: 
‘‘(iv) FOURTH TIER.—Notwithstanding 
clauses (i), (ii), and (iii), the maximum 
amount of penalty for each such violation 
shall be 3 times the otherwise applicable 
amount in such clauses if, within the 5-year 
period preceding such violation, the defend-
ant was criminally convicted for securities 
fraud or became subject to a judgment or 
order imposing monetary, equitable, or ad-
ministrative relief in any Commission ac-
tion alleging fraud by that defendant.’’. 
(B) MONEY PENALTIES IN ADMINISTRATIVE 
ACTIONS.—Section 21B(b) of the Securities Ex-
change Act of 1934 (15 U.S.C. 78u–2(b)) is 
amended by adding at the end the following: 
‘‘(4) FOURTH
TIER.—Notwithstanding para-
graphs (1), (2), and (3), the maximum amount of 
penalty for each such act or omission shall be 3 times 
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336 
the otherwise applicable amount in such paragraphs 
if, within the 5-year period preceding such act or 
omission, the person who committed the act or omis-
sion was criminally convicted for securities fraud or 
became subject to a judgment or order imposing mon-
etary, equitable, or administrative relief in any Com-
mission action alleging fraud by that person.’’. 
(3) INVESTMENT COMPANY ACT OF 1940.— 
(A) MONEY PENALTIES IN ADMINISTRATIVE 
ACTIONS.—Section 9(d)(2) of the Investment 
Company Act of 1940 (15 U.S.C. 80a–9(d)(2)) is 
amended by adding at the end the following: 
‘‘(D) FOURTH TIER.—Notwithstanding sub-
paragraphs (A), (B), and (C), the maximum 
amount of penalty for each such act or omission 
shall be 3 times the otherwise applicable amount 
in such subparagraphs if, within the 5-year pe-
riod preceding such act or omission, the person 
who committed the act or omission was crimi-
nally convicted for securities fraud or became 
subject to a judgment or order imposing mone-
tary, equitable, or administrative relief in any 
Commission action alleging fraud by that per-
son.’’. 
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337 
(B) MONEY PENALTIES IN CIVIL ACTIONS.— 
Section 42(e)(2) of the Investment Company Act 
of 1940 (15 U.S.C. 80a–41(e)(2)) is amended by 
adding at the end the following: 
‘‘(D) FOURTH TIER.—Notwithstanding sub-
paragraphs (A), (B), and (C), the maximum 
amount of penalty for each such violation shall 
be 3 times the otherwise applicable amount in 
such subparagraphs if, within the 5-year period 
preceding such violation, the defendant was 
criminally convicted for securities fraud or be-
came subject to a judgment or order imposing 
monetary, equitable, or administrative relief in 
any Commission action alleging fraud by that 
defendant.’’. 
(4) INVESTMENT ADVISERS ACT OF 1940.— 
(A) MONEY PENALTIES IN ADMINISTRATIVE 
ACTIONS.—Section 203(i)(2) of the Investment 
Advisers Act of 1940 (15 U.S.C. 80b–3(i)(2)) is 
amended by adding at the end the following: 
‘‘(D) FOURTH TIER.—Notwithstanding sub-
paragraphs (A), (B), and (C), the maximum 
amount of penalty for each such act or omission 
shall be 3 times the otherwise applicable amount 
in such subparagraphs if, within the 5-year pe-
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338 
riod preceding such act or omission, the person 
who committed the act or omission was crimi-
nally convicted for securities fraud or became 
subject to a judgment or order imposing mone-
tary, equitable, or administrative relief in any 
Commission action alleging fraud by that per-
son.’’. 
(B) MONEY PENALTIES IN CIVIL ACTIONS.— 
Section 209(e)(2) of the Investment Advisers Act 
of 1940 (15 U.S.C. 80b–9(e)(2)) is amended by 
adding at the end the following: 
‘‘(D) FOURTH TIER.—Notwithstanding sub-
paragraphs (A), (B), and (C), the maximum 
amount of penalty for each such violation shall 
be 3 times the otherwise applicable amount in 
such subparagraphs if, within the 5-year period 
preceding such violation, the defendant was 
criminally convicted for securities fraud or be-
came subject to a judgment or order imposing 
monetary, equitable, or administrative relief in 
any Commission action alleging fraud by that 
defendant.’’. 
(c) VIOLATIONS OF INJUNCTIONS AND BARS.— 
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339 
(1) SECURITIES ACT OF 1933.—Section 20(d) of 
the Securities Act of 1933 (15 U.S.C. 77t(d)) is 
amended— 
(A) in paragraph (1), by inserting after 
‘‘the rules or regulations thereunder,’’ the fol-
lowing: ‘‘a Federal court injunction or a bar ob-
tained or entered by the Commission under this 
title,’’; and 
(B) by striking paragraph (4) and inserting 
the following: 
‘‘(4) SPECIAL PROVISIONS RELATING TO A VIOLA-
TION OF AN INJUNCTION OR CERTAIN ORDERS.— 
‘‘(A) IN GENERAL.—Each separate violation 
of an injunction or order described in subpara-
graph (B) shall be a separate offense, except that 
in the case of a violation through a continuing 
failure to comply with such injunction or order, 
each day of the failure to comply with the in-
junction or order shall be deemed a separate of-
fense. 
‘‘(B) INJUNCTIONS AND ORDERS.—Subpara-
graph (A) shall apply with respect to any action 
to enforce— 
‘‘(i) a Federal court injunction ob-
tained pursuant to this title; 
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340 
‘‘(ii) an order entered or obtained by 
the Commission pursuant to this title that 
bars, suspends, places limitations on the ac-
tivities or functions of, or prohibits the ac-
tivities of, a person; or 
‘‘(iii) a cease-and-desist order entered 
by the Commission pursuant to section 
8A.’’. 
(2) SECURITIES EXCHANGE ACT OF 1934.—Sec-
tion 21(d)(3) of the Securities Exchange Act of 1934 
(15 U.S.C. 78u(d)(3)) is amended— 
(A) in subparagraph (A), by inserting after 
‘‘the rules or regulations thereunder,’’ the fol-
lowing: ‘‘a Federal court injunction or a bar ob-
tained or entered by the Commission under this 
title,’’; and 
(B) by striking subparagraph (D) and in-
serting the following: 
‘‘(D) SPECIAL PROVISIONS RELATING TO A VIO-
LATION OF AN INJUNCTION OR CERTAIN ORDERS.— 
‘‘(i) IN GENERAL.—Each separate violation 
of an injunction or order described in clause (ii) 
shall be a separate offense, except that in the case 
of a violation through a continuing failure to 
comply with such injunction or order, each day 
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341 
of the failure to comply with the injunction or 
order shall be deemed a separate offense. 
‘‘(ii) INJUNCTIONS
AND
ORDERS.—Clause 
(i) shall apply with respect to an action to en-
force— 
‘‘(I) a Federal court injunction ob-
tained pursuant to this title; 
‘‘(II) an order entered or obtained by 
the Commission pursuant to this title that 
bars, suspends, places limitations on the ac-
tivities or functions of, or prohibits the ac-
tivities of, a person; or 
‘‘(III) a cease-and-desist order entered 
by the Commission pursuant to section 
21C.’’. 
(3) INVESTMENT COMPANY ACT OF 1940.—Section 
42(e) of the Investment Company Act of 1940 (15 
U.S.C. 80a–41(e)) is amended— 
(A) in paragraph (1), by inserting after 
‘‘the rules or regulations thereunder,’’ the fol-
lowing: ‘‘a Federal court injunction or a bar ob-
tained or entered by the Commission under this 
title,’’; and 
(B) by striking paragraph (4) and inserting 
the following: 
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342 
‘‘(4) SPECIAL PROVISIONS RELATING TO A VIOLA-
TION OF AN INJUNCTION OR CERTAIN ORDERS.— 
‘‘(A) IN GENERAL.—Each separate violation 
of an injunction or order described in subpara-
graph (B) shall be a separate offense, except that 
in the case of a violation through a continuing 
failure to comply with such injunction or order, 
each day of the failure to comply with the in-
junction or order shall be deemed a separate of-
fense. 
‘‘(B) INJUNCTIONS AND ORDERS.—Subpara-
graph (A) shall apply with respect to any action 
to enforce— 
‘‘(i) a Federal court injunction ob-
tained pursuant to this title; 
‘‘(ii) an order entered or obtained by 
the Commission pursuant to this title that 
bars, suspends, places limitations on the ac-
tivities or functions of, or prohibits the ac-
tivities of, a person; or 
‘‘(iii) a cease-and-desist order entered 
by the Commission pursuant to section 
9(f).’’. 
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343 
(4) INVESTMENT ADVISERS ACT OF 1940.—Sec-
tion 209(e) of the Investment Advisers Act of 1940 (15 
U.S.C. 80b–9(e)) is amended— 
(A) in paragraph (1), by inserting after 
‘‘the rules or regulations thereunder,’’ the fol-
lowing: ‘‘a Federal court injunction or a bar ob-
tained or entered by the Commission under this 
title,’’; and 
(B) by striking paragraph (4) and inserting 
the following: 
‘‘(4) SPECIAL PROVISIONS RELATING TO A VIOLA-
TION OF AN INJUNCTION OR CERTAIN ORDERS.— 
‘‘(A) IN GENERAL.—Each separate violation 
of an injunction or order described in subpara-
graph (B) shall be a separate offense, except that 
in the case of a violation through a continuing 
failure to comply with such injunction or order, 
each day of the failure to comply with the in-
junction or order shall be deemed a separate of-
fense. 
‘‘(B) INJUNCTIONS AND ORDERS.—Subpara-
graph (A) shall apply with respect to any action 
to enforce— 
‘‘(i) a Federal court injunction ob-
tained pursuant to this title; 
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344 
‘‘(ii) an order entered or obtained by 
the Commission pursuant to this title that 
bars, suspends, places limitations on the ac-
tivities or functions of, or prohibits the ac-
tivities of, a person; or 
‘‘(iii) a cease-and-desist order entered 
by the Commission pursuant to section 
203(k).’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply with respect to conduct that occurs after 
the date of the enactment of this Act. 
SEC. 802. UPDATED CIVIL MONEY PENALTIES OF PUBLIC 
COMPANY ACCOUNTING OVERSIGHT BOARD. 
(a) IN GENERAL.—Section 105(c)(4)(D) of the Sar-
banes-Oxley Act of 2002 (15 U.S.C. 7215(c)(4)(D)) is 
amended— 
(1) in clause (i)— 
(A) by striking ‘‘$100,000’’ and inserting 
‘‘$200,000’’; and 
(B) by striking ‘‘$2,000,000’’ and inserting 
‘‘$4,000,000’’; and 
(2) in clause (ii)— 
(A) by striking ‘‘$750,000’’ and inserting 
‘‘$1,000,000’’; and 
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345 
(B) by striking ‘‘$15,000,000’’ and inserting 
‘‘$20,000,000’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply with respect to conduct that occurs after 
the date of the enactment of this Act. 
SEC. 803. UPDATED CIVIL MONEY PENALTY FOR CONTROL-
LING PERSONS IN CONNECTION WITH IN-
SIDER TRADING. 
(a) IN GENERAL.—Section 21A(a)(3) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78u–1(a)(3)) is amended 
by striking ‘‘$1,000,000’’ and inserting ‘‘$2,000,000’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply with respect to conduct that occurs after 
the date of the enactment of this Act. 
SEC. 804. UPDATE OF CERTAIN OTHER PENALTIES. 
(a) IN GENERAL.—Section 32 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78ff) is amended— 
(1) in subsection (a), by striking ‘‘$5,000,000’’ 
and inserting ‘‘$7,000,000’’; and 
(2) in subsection (c)— 
(A) in paragraph (1)— 
(i) in subparagraph (A), by striking 
‘‘$2,000,000’’ and inserting ‘‘$4,000,000’’; 
and 
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346 
(ii) in subparagraph (B), by striking 
‘‘$10,000’’ and inserting ‘‘$50,000’’; and 
(B) in paragraph (2)— 
(i) in subparagraph (A), by striking 
‘‘$100,000’’ and inserting ‘‘$250,000’’; and 
(ii) in subparagraph (B), by striking 
‘‘$10,000’’ and inserting ‘‘$50,000’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply with respect to conduct that occurs after 
the date of the enactment of this Act. 
SEC. 805. MONETARY SANCTIONS TO BE USED FOR THE RE-
LIEF OF VICTIMS. 
(a) IN GENERAL.—Section 308(a) of the Sarbanes- 
Oxley Act of 2002 (15 U.S.C. 7246(a)) is amended to read 
as follows: 
‘‘(a) MONETARY SANCTIONS TO BE USED FOR THE 
RELIEF OF VICTIMS.—If, in any judicial or administrative 
action brought by the Commission under the securities laws, 
the Commission obtains a monetary sanction (as defined 
in section 21F(a) of the Securities Exchange Act of 1934) 
against any person for a violation of such laws, or such 
person agrees, in settlement of any such action, to such 
monetary sanction, the amount of such monetary sanction 
shall, on the motion or at the direction of the Commission, 
be added to and become part of a disgorgement fund or other 
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347 
fund established for the benefit of the victims of such viola-
tion.’’. 
(b) 
MONETARY
SANCTION
DEFINED.—Section 
21F(a)(4)(A) of the Securities Exchange Act of 1934 (15 
U.S.C. 78u–6(a)(4)(A)) is amended by striking ‘‘ordered’’ 
and inserting ‘‘required’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section apply with respect to any monetary sanction or-
dered or required to be paid before or after the date of enact-
ment of this Act. 
SEC. 806. GAO REPORT ON USE OF CIVIL MONEY PENALTY 
AUTHORITY BY COMMISSION. 
(a) IN GENERAL.—Not later than 2 years after the 
date of the enactment of this Act, the Comptroller General 
of the United States shall submit to the Committee on Fi-
nancial Services of the House of Representatives and the 
Committee on Banking, Housing, and Urban Affairs of the 
Senate a report on the use by the Commission of the author-
ity to impose or obtain civil money penalties for violations 
of the securities laws during the period beginning on June 
1, 2010, and ending on the date of the enactment of this 
Act. 
(b) MATTERS REQUIRED TO BE INCLUDED.—The mat-
ters covered by the report required by subsection (a) shall 
include the following: 
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348 
(1) The types of violations for which civil money 
penalties were imposed or obtained. 
(2) The types of persons on whom civil money 
penalties were imposed or from whom such penalties 
were obtained. 
(3) The number and dollar amount of civil 
money penalties imposed or obtained, disaggregated 
as follows: 
(A) Penalties imposed in administrative ac-
tions and penalties obtained in judicial actions. 
(B) Penalties imposed on or obtained from 
issuers (individual and aggregate filers) and 
penalties imposed on or obtained from other per-
sons. 
(C) Penalties permitted to be retained for 
use by the Commission and penalties deposited 
in the general fund of the Treasury of the United 
States. 
(4) For penalties imposed on or obtained from 
issuers: 
(A) Whether the violations involved resulted 
in direct economic benefit to the issuers. 
(B) The impact of the penalties on the 
shareholders of the issuers. 
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349 
(c) DEFINITIONS.—In this section, the terms ‘‘Commis-
sion’’, ‘‘issuer’’, and ‘‘securities laws’’ have the meanings 
given such terms in section 3(a) of the Securities Exchange 
Act of 1934 (15 U.S.C. 78c(a)). 
Subtitle B—FIRREA Penalties 
Modernization 
SECTION 811. INCREASE OF CIVIL AND CRIMINAL PEN-
ALTIES ORIGINALLY ESTABLISHED IN THE FI-
NANCIAL INSTITUTIONS REFORM, RECOVERY, 
AND ENFORCEMENT ACT OF 1989. 
(a) AMENDMENTS TO FIRREA.— Section 951(b) of 
the Financial Institutions Reform, Recovery, and Enforce-
ment Act of 1989 (12 U.S.C. 1833a(b)) is amended— 
(1) in paragraph (1), by striking ‘‘$1,000,000’’ 
and inserting ‘‘$1,500,000’’; and 
(2) in paragraph (2), by striking ‘‘$1,000,000 
per day or $5,000,000’’ and inserting ‘‘$1,500,000 per 
day or $7,500,000’’. 
(b) AMENDMENTS
TO
THE HOME OWNERS’ LOAN 
ACT.—The Home Owners’ Loan Act (12 U.S.C. 1461 et 
seq.) is amended— 
(1) in section 5(v)(6), by striking ‘‘$1,000,000’’ 
and inserting ‘‘$1,500,000’’; and 
(2) in section 10— 
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350 
(A) 
in 
subsection 
(r)(3), 
by 
striking 
‘‘$1,000,000’’ and inserting ‘‘$1,500,000’’; and 
(B) in subsection (i)(1)(B), by striking 
‘‘$1,000,000’’ and inserting ‘‘$1,500,000’’. 
(c) AMENDMENTS TO THE FEDERAL DEPOSIT INSUR-
ANCE ACT.—The Federal Deposit Insurance Act (12 U.S.C. 
1811 et seq.) is amended— 
(1) in section 7— 
(A) in subsection (a)(1), by striking 
‘‘$1,000,000’’ and inserting ‘‘$1,500,000’’; and 
(B) in subsection (j)(16)(D), by striking 
‘‘$1,000,000’’ each place such term appears and 
inserting ‘‘$1,500,000’’; 
(2) in section 8— 
(A) in subsection (i)(2)(D), by striking 
‘‘$1,000,000’’ each place such term appears and 
inserting ‘‘$1,500,000’’; and 
(B) 
in 
subsection 
(j), 
by 
striking 
‘‘$1,000,000’’ and inserting ‘‘$1,500,000’’; and 
(3) in section 19(b), by striking ‘‘$1,000,000’’ 
and inserting ‘‘$1,500,000’’. 
(d) AMENDMENTS TO THE FEDERAL CREDIT UNION 
ACT.—The Federal Credit Union Act (12 U.S.C. 1751 et 
seq.) is amended— 
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351 
(1) 
in 
section 
202(a)(3), 
by 
striking 
‘‘$1,000,000’’ and inserting ‘‘$1,500,000’’; 
(2) 
in 
section 
205(d)(3), 
by 
striking 
‘‘$1,000,000’’ and inserting ‘‘$1,500,000’’; and 
(3) in section 206— 
(A) in subsection (k)(2)(D), by striking 
‘‘$1,000,000’’ each place such term appears and 
inserting ‘‘$1,500,000’’; and 
(B) 
in 
subsection 
(l), 
by 
striking 
‘‘$1,000,000’’ and inserting ‘‘$1,500,000’’. 
(e) AMENDMENTS TO THE REVISED STATUTES OF THE 
UNITED STATES.—Title LXII of the Revised Statutes of the 
United States is amended— 
(1) in section 5213(c), by striking ‘‘$1,000,000’’ 
and inserting ‘‘$1,500,000’’; and 
(2) 
in 
section 
5239(b)(4), 
by 
striking 
‘‘$1,000,000’’ each place such term appears and in-
serting ‘‘$1,500,000’’. 
(f) AMENDMENTS TO THE FEDERAL RESERVE ACT.— 
The Federal Reserve Act (12 U.S.C. 221 et seq.) is amend-
ed— 
(1) in the 6th undesignated paragraph of section 
9, 
by 
striking 
‘‘$1,000,000’’ 
and 
inserting 
‘‘$1,500,000’’; 
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352 
(2) in section 19(l)(4), by striking ‘‘$1,000,000’’ 
each 
place 
such 
term 
appears 
and 
inserting 
‘‘$1,500,000’’; and 
(3) in section 29(d), by striking ‘‘$1,000,000’’ 
each 
place 
such 
term 
appears 
and 
inserting 
‘‘$1,500,000’’. 
(g) AMENDMENTS TO THE BANK HOLDING COMPANY 
ACT AMENDMENTS OF 1970.—Section 106(b)(2)(F)(iv) of 
the Bank Holding Company Act Amendments of 1970 (12 
U.S.C. 
1978(b)(2)(F)(iv)) 
is 
amended 
by 
striking 
‘‘$1,000,000’’ each place such term appears and inserting 
‘‘$1,500,000’’. 
(h) AMENDMENTS TO THE BANK HOLDING COMPANY 
ACT OF 1956.—Section 8 of the Bank Holding Company 
Act of 1956 (12 U.S.C. 1847) is amended— 
(1) 
in 
subsection 
(a)(2), 
by 
striking 
‘‘$1,000,000’’ and inserting ‘‘$1,500,000’’; and 
(2) 
in 
subsection 
(d)(3), 
by 
striking 
‘‘$1,000,000’’ and inserting ‘‘$1,500,000’’. 
(i) AMENDMENTS
TO TITLE 18, UNITED STATES 
CODE.—Title 18, United States Code, is amended— 
(1) in section 215(a) of chapter 11, by striking 
‘‘$1,000,000’’ and inserting ‘‘$1,500,000’’; 
(2) in chapter 31— 
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353 
(A) in section 656, by striking ‘‘$1,000,000’’ 
and inserting ‘‘$1,500,000’’; and 
(B) in section 657, by striking ‘‘$1,000,000’’ 
and inserting ‘‘$1,500,000’’; 
(3) in chapter 47— 
(A) 
in 
section 
1005, 
by 
striking 
‘‘$1,000,000’’ and inserting ‘‘$1,500,000’’; 
(B) 
in 
section 
1006, 
by 
striking 
‘‘$1,000,000’’ and inserting ‘‘$1,500,000’’; 
(C) 
in 
section 
1007, 
by 
striking 
‘‘$1,000,000’’ and inserting ‘‘$1,500,000’’; and 
(D) 
in 
section 
1014, 
by 
striking 
‘‘$1,000,000’’ and inserting ‘‘$1,500,000’’; and 
(4) in chapter 63— 
(A) 
in 
section 
1341, 
by 
striking 
‘‘$1,000,000’’ and inserting ‘‘$1,500,000’’; 
(B) 
in 
section 
1343, 
by 
striking 
‘‘$1,000,000’’ and inserting ‘‘$1,500,000’’; and 
(C) 
in 
section 
1344, 
by 
striking 
‘‘$1,000,000’’ and inserting ‘‘$1,500,000’’. 
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354 
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 Pro-
tection Act are repealed, and the provisions of law amended 
or repealed by such sections are restored or revived as if 
such sections had not been enacted: 
(1) Section 603. 
(2) Section 618. 
(3) Section 619. 
(4) Section 620. 
(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. 
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355 
TITLE X—UNLEASHING OPPOR-
TUNITIES FOR SMALL BUSI-
NESSES, 
INNOVATORS, 
AND 
JOB CREATORS BY FACILI-
TATING CAPITAL FORMATION 
Subtitle A—Small Business Merg-
ers, Acquisitions, Sales, and Bro-
kerage Simplification 
SEC. 1001. REGISTRATION EXEMPTION FOR MERGER AND 
ACQUISITION BROKERS. 
Section 15(b) of the Securities Exchange Act of 1934 
(15 U.S.C. 78o(b)) is amended by adding at the end the 
following: 
‘‘(13) REGISTRATION EXEMPTION FOR MERGER 
AND ACQUISITION BROKERS.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), an M&A broker shall be ex-
empt from registration under this section. 
‘‘(B) EXCLUDED
ACTIVITIES.—An M&A 
broker is not exempt from registration under this 
paragraph if such broker does any of the fol-
lowing: 
‘‘(i) Directly or indirectly, in connec-
tion with the transfer of ownership of an el-
igible privately held company, receives, 
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356 
holds, transmits, or has custody of the funds 
or securities to be exchanged by the parties 
to the transaction. 
‘‘(ii) Engages on behalf of an issuer in 
a public offering of any class of securities 
that is registered, or is required to be reg-
istered, with the Commission under section 
12 or with respect to which the issuer files, 
or is required to file, periodic information, 
documents, and reports under subsection 
(d). 
‘‘(iii) Engages on behalf of any party 
in a transaction involving a public shell 
company. 
‘‘(C) DISQUALIFICATIONS.—An M&A broker 
is not exempt from registration under this para-
graph if such broker is subject to— 
‘‘(i) suspension or revocation of reg-
istration under paragraph (4); 
‘‘(ii) a statutory disqualification de-
scribed in section 3(a)(39); 
‘‘(iii) a disqualification under the 
rules adopted by the Commission under sec-
tion 926 of the Investor Protection and Se-
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357 
curities Reform Act of 2010 (15 U.S.C. 77d 
note); or 
‘‘(iv) a final order described in para-
graph (4)(H). 
‘‘(D) RULE OF CONSTRUCTION.—Nothing in 
this paragraph shall be construed to limit any 
other authority of the Commission to exempt any 
person, or any class of persons, from any provi-
sion of this title, or from any provision of any 
rule or regulation thereunder. 
‘‘(E) DEFINITIONS.—In this paragraph: 
‘‘(i) CONTROL.—The term ‘control’ 
means the power, directly or indirectly, to 
direct the management or policies of a com-
pany, whether through ownership of securi-
ties, by contract, or otherwise. There is a 
presumption of control for any person 
who— 
‘‘(I) is a director, general partner, 
member or manager of a limited liabil-
ity company, or officer exercising exec-
utive responsibility (or has similar sta-
tus or functions); 
‘‘(II) has the right to vote 20 per-
cent or more of a class of voting securi-
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358 
ties or the power to sell or direct the 
sale of 20 percent or more of a class of 
voting securities; or 
‘‘(III) in the case of a partnership 
or limited liability company, has the 
right to receive upon dissolution, or 
has contributed, 20 percent or more of 
the capital. 
‘‘(ii) ELIGIBLE PRIVATELY HELD COM-
PANY.—The term ‘eligible privately held 
company’ means a privately held company 
that meets both of the following conditions: 
‘‘(I) The company does not have 
any class of securities registered, or re-
quired to be registered, with the Com-
mission under section 12 or with re-
spect to which the company files, or is 
required to file, periodic information, 
documents, and reports under sub-
section (d). 
‘‘(II) In the fiscal year ending im-
mediately before the fiscal year in 
which the services of the M&A broker 
are initially engaged with respect to 
the securities transaction, the company 
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359 
meets either or both of the following 
conditions (determined in accordance 
with the historical financial account-
ing records of the company): 
‘‘(aa) The earnings of the 
company before interest, taxes, de-
preciation, and amortization are 
less than $25,000,000. 
‘‘(bb) The gross revenues of 
the 
company 
are 
less 
than 
$250,000,000. 
‘‘(iii) M&A BROKER.—The term ‘M&A 
broker’ means a broker, and any person as-
sociated with a broker, engaged in the busi-
ness of effecting securities transactions sole-
ly in connection with the transfer of owner-
ship of an eligible privately held company, 
regardless of whether the broker acts on be-
half of a seller or buyer, through the pur-
chase, sale, exchange, issuance, repurchase, 
or redemption of, or a business combination 
involving, securities or assets of the eligible 
privately held company, if the broker rea-
sonably believes that— 
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360 
‘‘(I) upon consummation of the 
transaction, any person acquiring se-
curities or assets of the eligible pri-
vately held company, acting alone or 
in concert, will control and, directly or 
indirectly, will be active in the man-
agement of the eligible privately held 
company or the business conducted 
with the assets of the eligible privately 
held company; and 
‘‘(II) if any person is offered secu-
rities in exchange for securities or as-
sets of the eligible privately held com-
pany, such person will, prior to becom-
ing legally bound to consummate the 
transaction, receive or have reasonable 
access to the most recent fiscal year- 
end financial statements of the issuer 
of the securities as customarily pre-
pared by the management of the issuer 
in the normal course of operations and, 
if the financial statements of the issuer 
are audited, reviewed, or compiled, any 
related statement by the independent 
accountant, a balance sheet dated not 
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361 
more than 120 days before the date of 
the offer, and information pertaining 
to the management, business, results of 
operations for the period covered by the 
foregoing financial statements, and 
material loss contingencies of the 
issuer. 
‘‘(iv) PUBLIC
SHELL
COMPANY.—The 
term ‘public shell company’ is a company 
that at the time of a transaction with an el-
igible privately held company— 
‘‘(I) has any class of securities 
registered, or required to be registered, 
with the Commission under section 12 
or that is required to file reports pur-
suant to subsection (d); 
‘‘(II) has no or nominal oper-
ations; and 
‘‘(III) has— 
‘‘(aa) no or nominal assets; 
‘‘(bb) assets consisting solely 
of cash and cash equivalents; or 
‘‘(cc) assets consisting of any 
amount of cash and cash equiva-
lents and nominal other assets. 
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362 
‘‘(F) INFLATION ADJUSTMENT.— 
‘‘(i) IN GENERAL.—On the date that is 
5 years after the date of the enactment of 
this paragraph, and every 5 years there-
after, each dollar amount in subparagraph 
(E)(ii)(II) shall be adjusted by— 
‘‘(I) dividing the annual value of 
the Employment Cost Index For Wages 
and Salaries, Private Industry Work-
ers (or any successor index), as pub-
lished by the Bureau of Labor Statis-
tics, for the calendar year preceding 
the calendar year in which the adjust-
ment is being made by the annual 
value of such index (or successor) for 
the calendar year ending December 31, 
2012; and 
‘‘(II) 
multiplying 
such 
dollar 
amount by the quotient obtained under 
subclause (I). 
‘‘(ii) ROUNDING.—Each dollar amount 
determined under clause (i) shall be round-
ed to the nearest multiple of $100,000.’’. 
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363 
SEC. 1002. EFFECTIVE DATE. 
This subtitle and any amendment made by this sub-
title shall take effect on the date that is 90 days after the 
date of the enactment of this Act. 
Subtitle B—Encouraging Employee 
Ownership 
SEC. 1006. INCREASED THRESHOLD FOR DISCLOSURES RE-
LATING TO COMPENSATORY BENEFIT PLANS. 
Not later than 60 days after the date of the enactment 
of this Act, the Securities and Exchange Commission shall 
revise section 230.701(e) of title 17, Code of Federal Regula-
tions, so as to increase from $5,000,000 to $10,000,000 the 
aggregate sales price or amount of securities sold during 
any consecutive 12-month period in excess of which the 
issuer is required under such section to deliver an addi-
tional disclosure to investors. The Commission shall index 
for inflation such aggregate sales price or amount every 5 
years to reflect the change in the Consumer Price Index for 
All Urban Consumers published by the Bureau of Labor 
Statistics, rounding to the nearest $1,000,000. 
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364 
Subtitle C—Small Company 
Disclosure Simplification 
SEC. 1011. EXEMPTION FROM XBRL REQUIREMENTS FOR 
EMERGING GROWTH COMPANIES AND OTHER 
SMALLER COMPANIES. 
(a) EXEMPTION
FOR EMERGING GROWTH COMPA-
NIES.—Emerging growth companies are exempted from the 
requirements to use Extensible Business Reporting Lan-
guage (XBRL) for financial statements and other periodic 
reporting required to be filed with the Commission under 
the securities laws. Such companies may elect to use XBRL 
for such reporting. 
(b) EXEMPTION FOR OTHER SMALLER COMPANIES.— 
Issuers with total annual gross revenues of less than 
$250,000,000 are exempt from the requirements to use 
XBRL for financial statements and other periodic reporting 
required to be filed with the Commission under the securi-
ties laws. Such issuers may elect to use XBRL for such re-
porting. An exemption under this subsection shall continue 
in effect until— 
(1) the date that is five years after the date of 
enactment of this Act; or 
(2) the date that is two years after a determina-
tion by the Commission, by order after conducting the 
analysis required by section 3, that the benefits of 
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365 
such requirements to such issuers outweigh the costs, 
but no earlier than three years after enactment of this 
Act. 
(c) MODIFICATIONS TO REGULATIONS.—Not later than 
60 days after the date of enactment of this Act, the Commis-
sion shall revise its regulations under parts 229, 230, 232, 
239, 240, and 249 of title 17, Code of Federal Regulations, 
to reflect the exemptions set forth in subsections (a) and 
(b). 
SEC. 1012. ANALYSIS BY THE SEC. 
The Commission shall conduct an analysis of the costs 
and benefits to issuers described in section 1011(b) of the 
requirements to use XBRL for financial statements and 
other periodic reporting required to be filed with the Com-
mission under the securities laws. Such analysis shall in-
clude an assessment of— 
(1) how such costs and benefits may differ from 
the costs and benefits identified by the Commission in 
the order relating to interactive data to improve fi-
nancial reporting (dated January 30, 2009; 74 Fed. 
Reg. 6776) because of the size of such issuers; 
(2) the effects on efficiency, competition, capital 
formation, and financing and on analyst coverage of 
such issuers (including any such effects resulting from 
use of XBRL by investors); 
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366 
(3) the costs to such issuers of— 
(A) submitting data to the Commission in 
XBRL; 
(B) posting data on the website of the issuer 
in XBRL; 
(C) software necessary to prepare, submit, 
or post data in XBRL; and 
(D) any additional consulting services or 
filing agent services; 
(4) the benefits to the Commission in terms of 
improved ability to monitor securities markets, assess 
the potential outcomes of regulatory alternatives, and 
enhance investor participation in corporate govern-
ance and promote capital formation; and 
(5) the effectiveness of standards in the United 
States for interactive filing data relative to the stand-
ards of international counterparts. 
SEC. 1013. REPORT TO CONGRESS. 
Not later than one year after the date of enactment 
of this Act, the Commission shall provide the Committee 
on Financial Services of the House of Representatives and 
the Committee on Banking, Housing, and Urban Affairs 
of the Senate a report regarding— 
(1) the progress in implementing XBRL report-
ing within the Commission; 
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367 
(2) the use of XBRL data by Commission offi-
cials; 
(3) the use of XBRL data by investors; 
(4) the results of the analysis required by section 
1012; and 
(5) any additional information the Commission 
considers relevant for increasing transparency, de-
creasing costs, and increasing efficiency of regulatory 
filings with the Commission. 
SEC. 1014. DEFINITIONS. 
As used in this subtitle, the terms ‘‘Commission’’, 
‘‘emerging growth company’’, ‘‘issuer’’, and ‘‘securities 
laws’’ have the meanings given such terms in section 3 of 
the Securities Exchange Act of 1934 (15 U.S.C. 78c). 
Subtitle 
D—Securities 
and 
Ex-
change 
Commission 
Overpay-
ment Credit 
SEC. 1016. REFUNDING OR CREDITING OVERPAYMENT OF 
SECTION 31 FEES. 
(a) IN GENERAL.—Section 31 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78ee) is amended by adding 
at the end the following: 
‘‘(n) OVERPAYMENT.—If a national securities ex-
change or national securities association pays to the Com-
mission an amount in excess of fees and assessments due 
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under this section and informs the Commission of such 
amount paid in excess within 10 years of the date of the 
payment, the Commission shall offset future fees and assess-
ments due by such exchange or association in an amount 
equal to such excess amount.’’. 
(b) APPLICABILITY.—The amendment made by this 
section shall apply to any fees and assessments paid before, 
on, or after the date of enactment of this section. 
Subtitle E—Fair Access to 
Investment Research 
SEC. 1021. SAFE HARBOR FOR INVESTMENT FUND RE-
SEARCH. 
(a) EXPANSION OF THE SAFE HARBOR.—Not later 
than the end of the 45-day period beginning on the date 
of enactment of this Act, the Securities and Exchange Com-
mission shall propose, and not later than the end of the 
180-day period beginning on such date, the Commission 
shall adopt, upon such terms, conditions, or requirements 
as the Commission may determine necessary or appropriate 
in the public interest, for the protection of investors, and 
for the promotion of capital formation, revisions to section 
230.139 of title 17, Code of Federal Regulations, to provide 
that a covered investment fund research report that is pub-
lished or distributed by a broker or dealer— 
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(1) shall be deemed, for purposes of sections 
2(a)(10) and 5(c) of the Securities Act of 1933 (15 
U.S.C. 77b(a)(10), 77e(c)), not to constitute an offer 
for sale or an offer to sell a security that is the subject 
of an offering pursuant to a registration statement 
that is effective, even if the broker or dealer is partici-
pating or will participate in the registered offering of 
the covered investment fund’s securities; and 
(2) shall be deemed to satisfy the conditions of 
subsection (a)(1) or (a)(2) of section 230.139 of title 
17, Code of Federal Regulations, or any successor pro-
visions, for purposes of the Commission’s rules and 
regulations under the Federal securities laws and the 
rules of any self-regulatory organization. 
(b) IMPLEMENTATION OF SAFE HARBOR.—In imple-
menting the safe harbor pursuant to subsection (a), the 
Commission shall— 
(1) not, in the case of a covered investment fund 
with a class of securities in substantially continuous 
distribution, condition the safe harbor on whether the 
broker’s or dealer’s publication or distribution of a 
covered investment fund research report constitutes 
such broker’s or dealer’s initiation or reinitiation of 
research coverage on such covered investment fund or 
its securities; 
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(2) not— 
(A) require the covered investment fund to 
have been registered as an investment company 
under the Investment Company Act of 1940 (15 
U.S.C. 80a–1 et seq.) or subject to the reporting 
requirements of section 13 or 15(d) of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 78m, 
78o(d)) for any period exceeding the period of 
time referenced under paragraph (a)(1)(i)(A)(1) 
of section 230.139 of title 17, Code of Federal 
Regulations; or 
(B) impose a minimum float provision ex-
ceeding 
that 
referenced 
in 
paragraph 
(a)(1)(i)(A)(1)(i) of section 230.139 of title 17, 
Code of Federal Regulations; 
(3) provide that a self-regulatory organization 
may not maintain or enforce any rule that would— 
(A) prohibit the ability of a member to pub-
lish or distribute a covered investment fund re-
search report solely because the member is also 
participating in a registered offering or other 
distribution of any securities of such covered in-
vestment fund; or 
(B) prohibit the ability of a member to par-
ticipate in a registered offering or other distribu-
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tion of securities of a covered investment fund 
solely because the member has published or dis-
tributed a covered investment fund research re-
port about such covered investment fund or its 
securities; and 
(4) provide that a covered investment fund re-
search report shall not be subject to section 24(b) of 
the Investment Company Act of 1940 (15 U.S.C. 80a– 
24(b)) or the rules and regulations thereunder, except 
that such report may still be subject to such section 
and the rules and regulations thereunder to the extent 
that it is otherwise not subject to the content stand-
ards in the rules of any self-regulatory organization 
related to research reports, including those contained 
in the rules governing communications with the pub-
lic regarding investment companies or substantially 
similar standards. 
(c) RULES OF CONSTRUCTION.—Nothing in this Act 
shall be construed as in any way limiting— 
(1) the applicability of the antifraud or 
antimanipulation provisions of the Federal securities 
laws and rules adopted thereunder to a covered invest-
ment fund research report, including section 17 of the 
Securities Act of 1933 (15 U.S.C. 77q), section 34(b) 
of the Investment Company Act of 1940 (15 U.S.C. 
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80a–33), and sections 9 and 10 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78i, 78j); or 
(2) the authority of any self-regulatory organiza-
tion to examine or supervise a member’s practices in 
connection with such member’s publication or dis-
tribution of a covered investment fund research report 
for compliance with applicable provisions of the Fed-
eral securities laws or self-regulatory organization 
rules related to research reports, including those con-
tained in rules governing communications with the 
public. 
(d) INTERIM EFFECTIVENESS OF SAFE HARBOR.— 
(1) IN GENERAL.—From and after the 180-day 
period beginning on the date of enactment of this Act, 
if the Commission has not adopted revisions to section 
230.139 of title 17, Code of Federal Regulations, as 
required by subsection (a), and until such time as the 
Commission has done so, a broker or dealer distrib-
uting or publishing a covered investment fund re-
search report after such date shall be able to rely on 
the provisions of section 230.139 of title 17, Code of 
Federal Regulations, and the broker or dealer’s publi-
cation of such report shall be deemed to satisfy the 
conditions of subsection (a)(1) or (a)(2) of section 
230.139 of title 17, Code of Federal Regulations, if the 
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covered investment fund that is the subject of such re-
port satisfies the reporting history requirements 
(without regard to Form S–3 or Form F–3 eligi-
bility) and minimum float provisions of such sub-
sections for purposes of the Commission’s rules and 
regulations under the Federal securities laws and the 
rules of any self-regulatory organization, as if revised 
and implemented in accordance with subsections (a) 
and (b). 
(2) STATUS OF COVERED INVESTMENT FUND.— 
After such period and until the Commission has 
adopted revisions to section 230.139 and FINRA has 
revised rule 2210, for purposes of subsection (c)(7)(O) 
of such rule, a covered investment fund shall be 
deemed to be a security that is listed on a national 
securities exchange and that is not subject to section 
24(b) of the Investment Company Act of 1940 (15 
U.S.C. 80a–24(b)). Communications concerning only 
covered investment funds that fall within the scope of 
such section shall not be required to be filed with 
FINRA. 
(e) DEFINITIONS.—For purposes of this section: 
(1) The term ‘‘covered investment fund research 
report’’ means a research report published or distrib-
uted by a broker or dealer about a covered investment 
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fund or any securities issued by the covered invest-
ment fund, but not including a research report to the 
extent that it is published or distributed by the cov-
ered investment fund or any affiliate of the covered 
investment fund. 
(2) The term ‘‘covered investment fund’’ means— 
(A) an investment company registered 
under, or that has filed an election to be treated 
as a business development company under, the 
Investment Company Act of 1940 and that has 
filed a registration statement under the Securi-
ties Act of 1933 for the public offering of a class 
of its securities, which registration statement has 
been declared effective by the Commission; and 
(B) a trust or other person— 
(i) issuing securities in an offering 
registered under the Securities Act of 1933 
and which class of securities is listed for 
trading on a national securities exchange; 
(ii) the assets of which consist pri-
marily of commodities, currencies, or deriv-
ative instruments that reference commod-
ities or currencies, or interests in the fore-
going; and 
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(iii) that provides in its registration 
statement under the Securities Act of 1933 
that a class of its securities are purchased 
or redeemed, subject to conditions or limita-
tions, for a ratable share of its assets. 
(3) The term ‘‘FINRA’’ means the Financial In-
dustry Regulatory Authority. 
(4) The term ‘‘research report’’ has the meaning 
given that term under section 2(a)(3) of the Securities 
Act of 1933 (15 U.S.C. 77b(a)(3)), except that such 
term shall not include an oral communication. 
(5) The term ‘‘self-regulatory organization’’ has 
the meaning given to that term under section 3(a)(26) 
of the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)(26)). 
Subtitle F—Accelerating Access to 
Capital 
SEC. 1026. EXPANDED ELIGIBILITY FOR USE OF FORM S–3. 
Not later than 45 days after the date of the enactment 
of this Act, the Securities and Exchange Commission shall 
revise Form S–3— 
(1) so as to permit securities to be registered 
pursuant to General Instruction I.B.1. of such form 
provided that either— 
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(A) the aggregate market value of the voting 
and non-voting common equity held by non-af-
filiates of the registrant is $75,000,000 or more; 
or 
(B) the registrant has at least one class of 
common equity securities listed and registered on 
a national securities exchange; and 
(2) so as to remove the requirement of paragraph 
(c) from General Instruction I.B.6. of such form. 
Subtitle G—SEC Small Business 
Advocate 
SEC. 1031. ESTABLISHMENT OF OFFICE OF THE ADVOCATE 
FOR SMALL BUSINESS CAPITAL FORMATION 
AND SMALL BUSINESS CAPITAL FORMATION 
ADVISORY COMMITTEE. 
(a) OFFICE OF THE ADVOCATE FOR SMALL BUSINESS 
CAPITAL FORMATION.—Section 4 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78d), as amended by title 
VI, is further amended by adding at the end the following: 
‘‘(k) OFFICE OF THE ADVOCATE FOR SMALL BUSINESS 
CAPITAL FORMATION.— 
‘‘(1) OFFICE ESTABLISHED.—There is established 
within the Commission the Office of the Advocate for 
Small Business Capital Formation (hereafter in this 
subsection referred to as the ‘Office’). 
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‘‘(2) ADVOCATE FOR SMALL BUSINESS CAPITAL 
FORMATION.— 
‘‘(A) IN GENERAL.—The head of the Office 
shall be the Advocate for Small Business Capital 
Formation, who shall— 
‘‘(i) report directly to the Commission; 
and 
‘‘(ii) be appointed by the Commission, 
from among individuals having experience 
in advocating for the interests of small busi-
nesses and encouraging small business cap-
ital formation. 
‘‘(B) COMPENSATION.—The annual rate of 
pay for the Advocate for Small Business Capital 
Formation shall be equal to the highest rate of 
annual pay for other senior executives who re-
port directly to the Commission. 
‘‘(C) NO CURRENT EMPLOYEE OF THE COM-
MISSION.—An individual may not be appointed 
as the Advocate for Small Business Capital For-
mation if the individual is currently employed 
by the Commission. 
‘‘(3) STAFF OF OFFICE.—The Advocate for Small 
Business Capital Formation, after consultation with 
the Commission, may retain or employ independent 
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counsel, research staff, and service staff, as the Advo-
cate for Small Business Capital Formation deter-
mines to be necessary to carry out the functions of the 
Office. 
‘‘(4) FUNCTIONS OF THE ADVOCATE FOR SMALL 
BUSINESS
CAPITAL
FORMATION.—The Advocate for 
Small Business Capital Formation shall— 
‘‘(A) assist small businesses and small busi-
ness investors in resolving significant problems 
such businesses and investors may have with the 
Commission or with self-regulatory organiza-
tions; 
‘‘(B) identify areas in which small busi-
nesses and small business investors would benefit 
from changes in the regulations of the Commis-
sion or the rules of self-regulatory organizations; 
‘‘(C) identify problems that small businesses 
have with securing access to capital, including 
any unique challenges to minority-owned and 
women-owned small businesses; 
‘‘(D) analyze the potential impact on small 
businesses and small business investors of— 
‘‘(i) proposed regulations of the Com-
mission that are likely to have a significant 
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economic impact on small businesses and 
small business capital formation; and 
‘‘(ii) proposed rules that are likely to 
have a significant economic impact on 
small businesses and small business capital 
formation of self-regulatory organizations 
registered under this title; 
‘‘(E) conduct outreach to small businesses 
and small business investors, including through 
regional roundtables, in order to solicit views on 
relevant capital formation issues; 
‘‘(F) to the extent practicable, propose to the 
Commission changes in the regulations or orders 
of the Commission and to Congress any legisla-
tive, administrative, or personnel changes that 
may be appropriate to mitigate problems identi-
fied under this paragraph and to promote the in-
terests of small businesses and small business in-
vestors; 
‘‘(G) consult with the Investor Advocate on 
proposed recommendations made under subpara-
graph (F); and 
‘‘(H) advise the Investor Advocate on issues 
related to small businesses and small business in-
vestors. 
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‘‘(5) ACCESS TO DOCUMENTS.—The Commission 
shall ensure that the Advocate for Small Business 
Capital Formation has full access to the documents 
and information of the Commission and any self-reg-
ulatory organization, as necessary to carry out the 
functions of the Office. 
‘‘(6) ANNUAL REPORT ON ACTIVITIES.— 
‘‘(A) IN GENERAL.—Not later than Decem-
ber 31 of each year after 2015, the Advocate for 
Small Business Capital Formation shall submit 
to the Committee on Banking, Housing, and 
Urban Affairs of the Senate and the Committee 
on Financial Services of the House of Represent-
atives a report on the activities of the Advocate 
for Small Business Capital Formation during 
the immediately preceding fiscal year. 
‘‘(B) CONTENTS.—Each report required 
under subparagraph (A) shall include— 
‘‘(i) appropriate statistical informa-
tion and full and substantive analysis; 
‘‘(ii) information on steps that the Ad-
vocate for Small Business Capital Forma-
tion has taken during the reporting period 
to improve small business services and the 
responsiveness of the Commission and self- 
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regulatory organizations to small business 
and small business investor concerns; 
‘‘(iii) a summary of the most serious 
issues encountered by small businesses and 
small business investors, including any 
unique issues encountered by minority- 
owned and women-owned small businesses 
and their investors, during the reporting pe-
riod; 
‘‘(iv) an inventory of the items sum-
marized under clause (iii) (including items 
summarized under such clause for any prior 
reporting period on which no action has 
been taken or that have not been resolved to 
the satisfaction of the Advocate for Small 
Business Capital Formation as of the begin-
ning of the reporting period covered by the 
report) that includes— 
‘‘(I) identification of any action 
taken by the Commission or the self- 
regulatory organization and the result 
of such action; 
‘‘(II) the length of time that each 
item has remained on such inventory; 
and 
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‘‘(III) for items on which no ac-
tion has been taken, the reasons for in-
action, and an identification of any of-
ficial who is responsible for such ac-
tion; 
‘‘(v) recommendations for such changes 
to the regulations, guidance and orders of 
the Commission and such legislative actions 
as may be appropriate to resolve problems 
with the Commission and self-regulatory or-
ganizations encountered by small businesses 
and small business investors and to encour-
age small business capital formation; and 
‘‘(vi) any other information, as deter-
mined appropriate by the Advocate for 
Small Business Capital Formation. 
‘‘(C) 
CONFIDENTIALITY.—No 
report 
re-
quired by subparagraph (A) may contain con-
fidential information. 
‘‘(D) INDEPENDENCE.—Each report re-
quired under subparagraph (A) shall be provided 
directly to the committees of Congress listed in 
such subparagraph without any prior review or 
comment from the Commission, any commis-
sioner, any other officer or employee of the Com-
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mission, or the Office of Management and Budg-
et. 
‘‘(7) REGULATIONS.—The Commission shall es-
tablish procedures requiring a formal response to all 
recommendations submitted to the Commission by the 
Advocate for Small Business Capital Formation, not 
later than 3 months after the date of such submission. 
‘‘(8) GOVERNMENT-BUSINESS FORUM ON SMALL 
BUSINESS
CAPITAL
FORMATION.—The Advocate for 
Small Business Capital Formation shall be respon-
sible for planning, organizing, and executing the an-
nual Government-Business Forum on Small Business 
Capital Formation described in section 503 of the 
Small Business Investment Incentive Act of 1980 (15 
U.S.C. 80c–1). 
‘‘(9) RULE OF CONSTRUCTION.—Nothing in this 
subsection may be construed as replacing or reducing 
the responsibilities of the Investor Advocate with re-
spect to small business investors.’’. 
(b) SMALL BUSINESS CAPITAL FORMATION ADVISORY 
COMMITTEE.—The Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.) is amended by inserting after section 
39 the following: 
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