I 
112TH CONGRESS 
2D SESSION 
H. R. 6613 
To establish the Securities and Derivatives Commission in order to combine 
the functions of the Commodity Futures Trading Commission and the 
Securities and Exchange Commission in a single independent regulatory 
commission. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 29, 2012 
Mr. FRANK of Massachusetts (for himself and Mr. CAPUANO) introduced the 
following bill; which was referred to the Committee on Financial Services, 
and in addition to the Committee on Agriculture, for a period to be sub-
sequently determined by the Speaker, in each case for consideration of 
such provisions as fall within the jurisdiction of the committee concerned 
A BILL 
To establish the Securities and Derivatives Commission in 
order to combine the functions of the Commodity Fu-
tures Trading Commission and the Securities and Ex-
change Commission in a single independent regulatory 
commission. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Markets and Trading Reorganization Act’’. 
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(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Purposes. 
Sec. 3. Definition. 
TITLE I—ESTABLISHMENT OF COMMISSION 
Sec. 101. Establishment. 
Sec. 102. Members; appointment; terms. 
Sec. 103. Organization of Commission. 
TITLE II—TRANSFERS OF FUNCTIONS 
Sec. 201. Commodity futures trading commission functions. 
Sec. 202. Securities and exchange commission functions. 
TITLE III—ADMINISTRATIVE PROVISIONS 
Sec. 301. Personnel provisions. 
Sec. 302. General administrative provisions. 
TITLE IV—FEE AND FUNDING AUTHORITY 
Sec. 401. Fees to cover costs of the Commission. 
Sec. 402. Funding Authority of the Commission. 
TITLE V—TRANSITIONAL, SAVINGS, AND CONFORMING 
PROVISIONS 
Sec. 501. Savings provisions. 
Sec. 502. Reference. 
Sec. 503. Amendments. 
TITLE VI—EFFECTIVE DATE 
Sec. 601. Effective date. 
SEC. 2. PURPOSES. 
The purposes of this Act are— 
(1) to establish a single Federal regulatory body 
with jurisdiction over securities, derivatives, options, 
futures, and related markets and instruments; 
(2) to coordinate the regulation of relevant fi-
nancial markets; 
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(3) to strengthen investor confidence in United 
States financial markets; and 
(4) to ensure the efficiency and competitiveness 
of those markets. 
SEC. 3. DEFINITION. 
As used in this Act, the term ‘‘Commission’’, other 
than where expressly referring to the Securities and Ex-
change Commission or the Commodity Futures Trading 
Commission, means the Securities and Derivatives Com-
mission established by section 101 of this Act. 
TITLE I—ESTABLISHMENT OF 
COMMISSION 
SEC. 101. ESTABLISHMENT. 
There is established an independent regulatory com-
mission to be known as the Securities and Derivatives 
Commission. 
SEC. 102. MEMBERS; APPOINTMENT; TERMS. 
(a) COMPOSITION OF COMMISSION.—The Commis-
sion shall be composed of 5 commissioners appointed by 
the President, by and with the advice and consent of the 
Senate. One of the commissioners shall be designated by 
the President as chairperson. Not more than three of such 
commissioners shall be members of the same political 
party. Each commissioner shall be selected solely on the 
basis of integrity and demonstrated knowledge of the oper-
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ations of the markets subject to the jurisdiction of the 
Commission. 
(b) QUALIFICATIONS.—In appointing commissioners 
under subsection (a), the President shall— 
(1) select persons who each have demonstrated 
knowledge of securities, futures, swaps, or other de-
rivatives, the regulation of such instruments, or the 
markets for agricultural or other types of commod-
ities underlying transactions subject to the oversight 
of the Commission under this Act; and 
(2) seek to ensure that the demonstrated knowl-
edge of the commissioners is balanced with respect 
to such areas, with at least one commissioner having 
knowledge of the agricultural commodities market. 
(c) TERMS.—Each commissioner shall be appointed 
for a term of 5 years, except that a commissioner may 
continue to serve after the expiration of such term until 
a successor is appointed and has qualified. 
(1) The terms of office of the commissioners 
first taking office after the enactment of this Act 
shall expire, as designated by the President at the 
time of their appointment— 
(A) one at the end of 1 year; 
(B) two at the end of 3 years; and 
(C) two at the end of 5 years. 
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(2) Any commissioner appointed to fill a va-
cancy occurring prior to the expiration of the term 
for which the predecessor was appointed shall be ap-
pointed for the remainder of such term. 
SEC. 103. ORGANIZATION OF COMMISSION. 
(a) REQUIRED DIVISIONS.—The Commission shall 
establish the principal divisions and subdivisions of the 
Commission, including, at a minimum, the following three 
divisions: 
(1) A Markets and Trading Division with over-
sight of market conduct and utilities, the conduct of 
market professionals, and self-regulatory organiza-
tions with regard to such market professionals, in-
cluding related examination functions. 
(2) An Issuers and Financial Disclosures Divi-
sion with oversight of the issuance of securities, in-
cluding investment companies and related rules and 
examinations. 
(3) An Enforcement Division responsible for the 
enforcement of all rules of the Commission. 
(b) OTHER OFFICES.—The Commission may estab-
lish such other offices as it determines useful in the con-
duct of the Commission’s affairs. 
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ployee held on the day before the date on which 
the employee was transferred. 
(B) FUNCTIONS.—To the extent prac-
ticable, each transferred employee shall be 
placed in a position at the Commission respon-
sible for the same functions and duties as the 
transferred employee had on the day before the 
date on which the employee was transferred, in 
accordance with the expertise and preferences 
of the transferred employee. 
(3) PERSONNEL ACTIONS LIMITED.— 
(A) PROTECTION.—Except as provided in 
subparagraph (B), each transferred employee 
shall not, during the 3-year period beginning on 
the transfer date, be involuntarily separated, or 
involuntarily reassigned outside his or her local-
ity pay area. 
(B) EXCEPTIONS.—Subparagraph (A) does 
not limit the right of the Commission to— 
(i) separate an employee for cause or 
for unacceptable performance; 
(ii) terminate an appointment to a po-
sition excepted from the competitive service 
because of its confidential policy-making, 
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policy-determining, 
or 
policy-advocating 
character; or 
(iii) reassign an employee outside such 
employee’s locality pay area when the 
Commission determines that the reassign-
ment is necessary for the efficient oper-
ation of the Commission. 
(4) PAY.— 
(A) PROTECTION.— 
(i) IN GENERAL.—Except as provided 
in clause (ii), each transferred employee 
shall, during the 3-year period beginning 
on the designated transfer date, receive 
pay at a rate equal to not less than the 
basic rate of pay (including any geographic 
differential) that the employee received 
during the pay period immediately pre-
ceding the date of transfer. 
(ii) 
LIMITATION.—Notwithstanding 
clause (i), if the employee was receiving a 
higher rate of basic pay on a temporary 
basis (because of a temporary assignment, 
temporary promotion, or other temporary 
action) immediately before the date of 
transfer, the Commission may reduce the 
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rate of basic pay on the date on which the 
rate would have been reduced but for the 
transfer, and the protected rate for the re-
mainder of the 3-year period shall be the 
reduced rate that would have applied, but 
for the transfer. 
(B) EXCEPTIONS.—Subparagraph (A) does 
not limit the right of the Commission to reduce 
the rate of basic pay of a transferred em-
ployee— 
(i) for cause or for unacceptable per-
formance; or 
(ii) with the consent of the employee. 
(C) 
PROTECTION
ONLY
WHILE
EM-
PLOYED.—Subparagraph (A) applies to a trans-
ferred employee only while that employee re-
mains employed by the Commission. 
(D) PAY
INCREASES
PERMITTED.—Sub-
paragraph (A) does not limit the authority of 
the Commission to increase the pay of a trans-
ferred employee. 
SEC. 302. GENERAL ADMINISTRATIVE PROVISIONS. 
(a) GENERAL AUTHORITY.—In carrying out any 
function transferred by this Act, the Commission, or any 
officer or employee of the Commission, may exercise any 
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authority available by law with respect to such function 
to the official or agency from which such function is trans-
ferred, and the actions of the Commission, or any officer 
or employee of the Commission in exercising such author-
ity shall have the same force and effect as when exercised 
by such official or agency. 
(b) RULES.—The Commission may prescribe such 
rules and regulations as the Commission determines nec-
essary or appropriate to administer and manage the func-
tions of the Commission. 
(c) CONTRACTS.—The Commission may make, enter 
into, and perform such contracts, grants, leases, coopera-
tive agreements, or other similar transactions with Fed-
eral or other public agencies (including State and local 
governments) and private organizations and persons, and 
make such payments, by way of advance or reimburse-
ment, as the Commission may determine necessary or ap-
propriate to carry out functions of the Commission. 
(d) REGIONAL AND FIELD OFFICES.—The Commis-
sion may establish, alter, discontinue, or maintain such 
regional or other field offices as the Commission may find 
necessary or appropriate to perform functions of the Com-
mission. 
(e) RESERVE FUND.—The Commission may obligate 
amounts in the Reserve Fund established under section 
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4(i) of the Securities Exchange Act of 1934 (15 U.S.C. 
78d(i)), not to exceed a total of $100,000,000 in any 1 
fiscal year, as the Commission determines is necessary to 
carry out the functions of the Commission, including those 
transferred by title II of this Act. Any amounts in the 
reserve fund shall remain available until expended. Not 
later than 10 days after the date on which the Commission 
obligates amounts under this subsection, the Commission 
shall notify Congress of the date, amount, and purpose 
of the obligation. 
TITLE IV—FEE AND FUNDING 
AUTHORITY 
SEC. 401. FEES TO COVER COSTS OF THE COMMISSION. 
(a) IMPOSITION OF FEES.— 
(1) IN GENERAL.—The Commission shall, by 
order, impose a fee on each agreement, contract, or 
transaction that is a contract of sale of a commodity 
for future delivery, an option on such a contract, or 
a swap or securities-based swap, so that the total of 
the fees so imposed during each fiscal year is suffi-
cient to cover the costs of the regulatory activities of 
the Commission related to such instruments for each 
fiscal year. 
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(2) LIMITATION.—The fees imposed under this 
subsection on all transactions of the same kind shall 
be determined in a uniform manner. 
(3) MID-YEAR ADJUSTMENT.— 
(A) IN GENERAL.—By March 1 of each 
fiscal year, the Commission shall determine 
whether, based on the fees collected under this 
subsection during the first 5 months of the fis-
cal year, the total of the amounts collected and 
to be collected under this section for the fiscal 
year is reasonably likely to be 10 percent (or 
more) greater or less than the costs described 
in paragraph (1) for the fiscal year. If the Com-
mission so determines, the Commission shall by 
order, no later than March 1 of the fiscal year, 
adjust the fee rates otherwise applicable under 
this subsection for the fiscal year so that the 
total of the amounts so collected and to be col-
lected is reasonably likely to equal to the costs 
so described. 
(B) EFFECTIVE DATE.—An adjusted rate 
prescribed under subparagraph (A) of this 
paragraph in a fiscal year shall take effect on 
the 1st day of the fiscal year to which the rate 
applies. 
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