(2) loans extended to officers, directors, or other
persons affiliated with the issuer on terms or condi-
tions that are not otherwise available to the public.
(b) DEADLINE FOR RULEMAKING.—The Commission
shall—
(1) within 90 days after the date of enactment
of this Act, propose, and
(2) within 270 days after such date, prescribe,
the revisions to its regulations required by subsection (a).
(c) ANALYSIS REQUIRED.—
(1) TRANSPARENCY, COMPLETENESS, AND USE-
FULNESS OF FINANCIAL STATEMENTS.—The Commis-
sion shall conduct an analysis of the extent to which,
consistent with the protection of investors and the
public interest, disclosure of additional or reorganized
information may be required to improve the trans-
parency, completeness, or usefulness of financial state-
ments and other corporate disclosures filed under the
securities laws.
(2) ALTERNATIVES TO BE CONSIDERED.—In con-
ducting the analysis required by paragraph (1), the
Commission shall consider—
(A) requiring the identification of the key
accounting principles that are most important to
the issuer’s reported financial condition and re-
sults of operation, and that require manage-
ment’s most difficult, subjective, or complex judg-
ments;
(B) requiring an explanation, where mate-
rial, of how different available accounting prin-
ciples applied, the judgments made in their ap-
plication, and the likelihood of materially dif-
ferent reported results if different assumptions or
conditions were to prevail;
(C) in the case of any issuer engaged in the
business of trading non-exchange traded con-
tracts, requiring an explanation of such trading
activities when such activities require the issuer
to account for contracts at fair value, but for
which a lack of market price quotations neces-
sitates the use of fair value estimation tech-
niques;
(D) establishing requirements relating to the
presentation of information in clear and under-
standable format and language; and
(E) requiring such other disclosures, in-
cluded in the financial statements or in other
disclosure by the issuer, as would in the Commis-
sion’s view improve the transparency of such
issuer’s financial statements and other required
corporate disclosures.
(3) RULES REQUIRED.—If the Commission, on
the basis of the analysis required by this subsection,
determines that it is necessary in the public interest
or for the protection of investors and would improve
the transparency of issuer financial statements, the
Commission may prescribe rules reflecting the results
of such analysis and the considerations required by
paragraph (2). In prescribing such rules, the Com-
mission may seek to minimize the paperwork and cost
burden on the issuer consistent with achieving the
public interest and investor protection purposes of
such rules.
SEC. 7. IMPROVEMENTS IN REPORTING ON INSIDER TRANS-
ACTIONS AND RELATIONSHIPS.
(a) SPECIFIC OBJECTIVES.—The Commission shall
initiate a proceeding to propose changes in its rules and
regulations with respect to financial reporting to improve
the transparency and clarity of the information available
to investors and to require increased financial disclosure
with respect to the following:
(1) 
INSIDER
RELATIONSHIPS
AND
TRANS-
ACTIONS.—Relationships and transactions—
(A) between the issuer, affiliates of the
issuer, and officers, directors, or employees of the
issuer or such affiliates; and
(B) between officers, directors, employees, or
affiliates of the issuer and entities that are not
otherwise affiliated with the issuer,
to the extent such arrangement or transaction creates
a conflict of interest for such persons. Such disclosure
shall provide a description of such elements of the
transaction as are necessary for an understanding of
the business purpose and economic substance of such
transaction (including contingencies). The disclosure
shall provide sufficient information to determine the
effect on the issuer’s financial statements and describe
compensation arrangements of interested parties to
such transactions.
(2) RELATIONSHIPS WITH PHILANTHROPIC OR-
GANIZATIONS.—Relationships between the registrant
or any executive officer of the registrant and any not-
for-profit organization on whose board a director or
immediate family member serves or of which a direc-
tor or immediate family member serves as an officer
or in a similar capacity. Relationships that shall be
disclosed include contributions to the organization in
excess of $10,000 made by the registrant or any exec-
utive officer in the last five years and any other ac-
tivity undertaken by the registrant or any executive
officer that provides a material benefit to the organi-
zation. Material benefit includes lobbying.
(3) INSIDER-CONTROLLED
AFFILIATES.—Rela-
tionships in which the registrant or any executive of-
ficer exercises significant control over an entity in
which a director or immediate family member owns
an equity interest or to which a director or imme-
diate family member has extended credit. Significant
control should be defined with reference to the con-
tractual and governance arrangements between the
registrant or executive officer, as the case may be, and
the entity.
(4) JOINT OWNERSHIP.—Joint ownership by a
registrant or executive officer and a director or imme-
diate family member of any real or personal prop-
erty.
(5) PROVISION OF SERVICES BY RELATED PER-
SONS.—The provision of any professional services, in-
cluding legal, financial advisory or medical services,
by a director or immediate family member to any ex-
ecutive officer of the registrant in the last five years.
(b) DEADLINES.—The Commission shall complete the
rulemaking required by this section within 180 days after
the date of enactment of this Act.
SEC. 8. CODES OF CONDUCT.
(a) RULES REQUIRED.—Within 180 days after the
date of enactment of this Act, the New York Stock Exchange,
the American Stock Exchange and the Nasdaq Stock Market
(or any successor to such entities), shall file with the Com-
mission proposed rule changes that would prohibit the list-
ing of any security issued by an issuer that has not adopted
a senior financial officers code of ethics applicable to its
principal financial officer, its comptroller or principal ac-
counting officer, or persons performing similar functions
that establishes such standards as are reasonably necessary
to promote honest and ethical conduct, the avoidance of con-
flicts of interest, full, fair, accurate, timely and understand-
able disclosure in the issuer’s periodic reports and compli-
ance with applicable governmental rules and regulations.
The Commission shall approve such proposed rule changes
pursuant to the requirement of section 19(b)(2) of the Secu-
rities Act of 1934.
(b) OTHER EXCHANGES.—The Commission, by rule or
regulation, may require any other national securities ex-
change, to propose rule changes necessary to comply with
the provisions of subsection (a) of this section if the Com-
mission determines such action is necessary or appropriate
in the public interest and consistent with the protection of
investors.
(c) FURTHER STANDARDS.—In addition to the re-
quirements of subsections (a) and (b), the Commission may,
by rule or regulation, prescribe further standards of conduct
for senior financial officers as necessary or appropriate in
the public interest and consistent with the protection of in-
vestors.
(d) CHANGES IN CODES OF CONDUCT.—Within 180
days after the date of enactment of this Act, the Commission
shall revise its regulations concerning matters requiring
prompt disclosure on Form 8K to require the immediate
disclosure, by means of such Form and by the Internet or
other electronic means, by any issuer of any change in, or
waiver of, the code of ethics of such issuer.
SEC. 9. ENHANCED OVERSIGHT OF PERIODIC DISCLOSURES
BY ISSUERS.
(a) REGULAR AND SYSTEMATIC REVIEW.—The Securi-
ties and Exchange Commission shall review disclosures
made by issuers pursuant to the Securities Exchange Act
of 1934 (including reports filed on form 10–K) on a basis
that is more regular and systematic than that in practice
on the date of enactment on this Act. Such review shall in-
clude a review of an issuer’s financial statements.
(b) RISK RATING SYSTEM.—For purposes of the re-
views required by subsection (a), the Commission shall es-
tablish a risk rating system whereby issuers receive a risk
rating by the Commission, which shall be used to determine
the frequency of such reviews. In designing such a risk rat-
ing system the Commission shall consider, among other fac-
tors the following:
(1) Emerging companies with disparities in
price to earning ratios.
(2) Issuers with the largest market capitaliza-
tion.
(3) Issuers whose operations significantly impact
any material sector of the economy.
(4) Systemic factors such as the effect on niche
markets or important subsectors of the economy.
(5) Issuers that experience significant volatility
in their stock price as compared to other issuers.
(6) Any other factor the Commission may con-
sider relevant.
(c) MINIMUM REVIEW PERIOD.—In no event shall an
issuer be reviewed less than once every three years by the
Commission.
(d) PROHIBITION OF DISCLOSURE OF RISK RATING.—
Notwithstanding any other provision of law, the Commis-
sion shall not disclose the risk rating of any issuer described
in subsection (b).
SEC. 10. RETENTION OF RECORDS.
(a) DUTY TO RETAIN RECORDS.—Any independent
public or certified accountant who certifies a financial
statement as required by the securities laws or any rule or
regulation thereunder shall prepare and maintain for a pe-
riod of no less than 7 years, final audit work papers and
other information related to any accountants report on such
financial statements in sufficient detail to support the opin-
ion or assertion reached in such accountants report. The
Commission may prescribe rules specifying the application
and requirements of this section.
(b) ACCOUNTANT’S REPORT.—For purposes of sub-
section (a), the term ‘‘accountant’s report’’ means a docu-
ment in which an accountant identifies a financial state-
ment and sets forth his opinion regarding such financial
statement or an assertion that an opinion cannot be ex-
pressed.
SEC. 11. COMMISSION AUTHORITY TO BAR PERSONS FROM
SERVING AS OFFICERS OR DIRECTORS.
(a) COMMISSION AUTHORITY TO PROHIBIT PERSONS
FROM SERVING AS OFFICERS OR DIRECTORS.—Notwith-
standing any other provision of the securities laws, in any
cease-and-desist proceeding under section 8A(a) of the Secu-
rities Act of 1933 or section 21C(a) of the Securities and
Exchange Act of 1934, the Commission may issue an order
to prohibit, conditionally or unconditionally, permanently
or for such period of time as it shall determine, any person
who has violated section 17(a)(1) of the Securities Act of
1933 or section 10(b) of the Securities Exchange Act of 1934
(or any rule or regulation thereunder) from acting as an
officer or director of any issuer that has a class of securities
registered pursuant to section 12 of the Securities Exchange
Act of 1934 or that is required to file reports pursuant to
section 15(d) of such Act if the person’s conduct dem-
onstrates substantial unfitness to serve as an officer or di-
rector of any such issuer.
(b) FINDING OF SUBSTANTIAL UNFITNESS.—In mak-
ing any determination that a person’s conduct demonstrates
substantial unfitness to serve as an officer or director of
any such issuer, the Commission shall consider—
(1) the severity of the persons conduct giving rise
to the violation, and the persons role or position when
he engaged in the violation;
(2) the person’s degree of scienter;
(3) the person’s economic gain as a result of the
violation; and
(4) the likelihood that the conduct giving rise to
the violation, or similar conduct as defined in sub-
section (a), may recur if the person is not so prohib-
ited.
(c) AUTOMATIC STAY PENDING APPEAL.—The enforce-
ment of any Commission order pursuant to subsection (a)
shall be stayed—
(1) for a period of at least 60 days after the
entry of any such order or decision; and
(2) upon the filing of a timely application for
judicial review of such order or decision, pending the
entry of a final order resolving the application for ju-
dicial review.
SEC. 12. DISGORGING INSIDERS PROFITS FROM TRADES
PRIOR TO CORRECTION OF ERRONEOUS FI-
NANCIAL STATEMENTS.
(a) ANALYSIS REQUIRED.—The Commission shall con-
duct an analysis of whether, and under what conditions,
any officer or director of an issuer should be required to
disgorge profits gained, or losses avoided, in the sale of the
securities of such issuer during the six month period imme-
diately preceding the filing of a restated financial statement
on the part of such issuer.
(b) DISGORGEMENT
RULES
AUTHORIZED.—If the
Commission determines that imposing the requirement de-
scribed in subsection (a) is necessary or appropriate in the
public interest or for the protection investors, and would
not unduly impair the operations of issuers or the orderly
operation of the securities markets, the Commission shall
prescribe a rule requiring the disgorgement of all profits
gained or losses avoided in the sale of the securities of the
issuer by any officer or director thereof. Such rule shall—
(1) describe the conditions under which any offi-
cer or director shall be required to disgorge profits,
including what constitutes a restatement for purposes
of operation of the rule;
(2) establish exceptions and exemptions from
such rule as necessary to carry out the purposes of
this section;
(3) identify the scienter requirement that should
be used in order to determine to impose the require-
ment to disgorge; and
(4) specify that the enforcement of such rule shall
lie solely with the Commission, and that any profits
so disgorged shall inure to the issuer.
(c) NO PREEMPTION OF OTHER LAW.—Unless other-
wise specified by the Commission, in the case of any rule
promulgated pursuant to subsection (b), such rule shall be
in addition to, and shall not supersede or preempt, the
Commission’s authority to seek disgorgement under any
other provision of law.
SEC. 13. SECURITIES AND EXCHANGE COMMISSION AU-
THORITY TO PROVIDE RELIEF.
(a) PROCEEDS OF ENRON AND ANDERSEN ENFORCE-
MENT ACTIONS.—If in any administrative or judicial pro-
ceeding brought by the Securities and Exchange Commis-
sion against—
(1) the Enron Corporation, any subsidiary or af-
filiate of such Corporation, or any officer, director, or
principal shareholder of such Corporation, subsidiary,
or affiliate for any violation of the securities laws; or
(2) Arthur Andersen L.L.C., any subsidiary or
affiliate of Arthur Andersen L.L.C., or any general or
limited partner of Arthur Andersen L.L.C., or such
subsidiary or affiliate, for any violation of the securi-
ties laws with respect to any services performed for or
in relation to the Enron Corporation, any subsidiary
or affiliate of such Corporation, or any officer, direc-
tor, or principal shareholder of such Corporation, sub-
sidiary, or affiliate;
the Commission obtains an order providing for an account-
ing and disgorgement of funds, such disgorgement fund (in-
cluding any addition to such fund required or permitted
under this section) shall be allocated in accordance with the
requirements of this section.
(b) PRIORITY FOR FORMER ENRON EMPLOYEES.—The
Commission shall, by order, establish an allocation system
for the disgorgement fund. Such system shall provide that,
in allocating the disgorgement fund amount the victims of
the securities laws violations described in subsection (a), the
first priority shall be given to individuals who were em-
ployed by the Enron Corporation, or a subsidiary or affil-
iate of such Corporation, and who were participants in an
individual account plan established by such Corporation,
subsidiary, or affiliate. Such allocations among such indi-
viduals shall be in proportion to the extent to which the
nonforfeitable accrued benefit of each such individual under
the plan was invested in the securities of such Corporation,
subsidiary, or affiliate.
(c) ADDITION OF CIVIL PENALTIES.—If, in any pro-
ceeding described in subsection (a), the Commission assesses
and collects any civil penalty, the Commission shall, not-
withstanding section 21(d)(3)(C)(i) or 21A(d)(1) of the Se-
curities Exchange Act of 1934, or any other provision of
the securities laws, be payable to the disgorgement fund.
(d) ACCEPTANCE OF ADDITIONAL DONATIONS.—The
Commission is authorized to accept, hold, administer, and
utilize gifts, bequests and devises of property, both real and
personal, to the United States for the disgorgement fund.
Gifts, bequests, and devises of money and proceeds from
sales of other property received as gifts, bequests, or devises
shall be deposited in the disgorgement fund and shall be
available for allocation in accordance with subsection (b).
(e) DEFINITIONS.—As used in this section:
(1) 
DISGORGEMENT
FUND.—The 
term
‘‘disgorgement fund’’ means a disgorgement fund es-
tablished in any administrative or judicial pro-
ceeding described in subsection (a).
(2) SUBSIDIARY OR AFFILIATE.—The term ‘‘sub-
sidiary or affiliate’’ when used in relation to a person
means any entity that controls, is controlled by, or is
under common control with such person.
(3) OFFICER, DIRECTOR, OR PRINCIPAL SHARE-
HOLDER.—The term ‘‘officer, director, or principal
shareholder’’ when used in relation to the Enron Cor-
poration, or any subsidiary or affiliate of such Cor-
poration, means any person that is subject to the re-
quirements of section 16 of the Securities Exchange
Act of 1934 (15 U.S.C. 78p) in relation to the Enron
Corporation, or any subsidiary or affiliate of such
Corporation.
(4) NONFORFEITABLE; ACCRUED BENEFIT; INDI-
VIDUAL ACCOUNT PLAN.—The terms ‘‘nonforfeitable’’,
‘‘accrued benefit’’, and ‘‘individual account plan’’
have the meanings provided such terms, respectively,
in paragraphs (19), (23), and (34) of section 3 of the
Employee Retirement Income Security Act of 1974
(29 U.S.C. 1002(19), (23), (34)).
SEC. 14. STUDY OF RULES RELATING TO ANALYST CON-
FLICTS OF INTEREST.
(a) STUDY AND REVIEW REQUIRED.—The Commission
shall conduct a study and review of any final rules by any
self-regulatory organization registered with the Commission
related to matters involving equity research analysts con-
flicts of interest. Such study and report shall include a re-
view of the effectiveness of such final rules in addressing
matters relating to the objectivity and integrity of equity
research analyst reports and recommendations.
(b) REPORT REQUIRED.—The Commission shall sub-
mit a report to the Committee on Financial Services of the
House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate on such study
and review no later than 180 days after any such final rules
by any self-regulatory organization registered with the
Commission are delivered to the Commission. Such report
shall include recommendations to the Congress, including
any recommendations for additional self-regulatory organi-
zation rulemaking regarding matters involving equity re-
search analysts. The Commission shall annually submit an
update on such review.
SEC. 15. REVIEW OF CORPORATE GOVERNANCE PRACTICES.
(a) STUDY OF CORPORATE PRACTICES.—The Commis-
sion shall conduct a study and review of current corporate
governance standards and practices to determine whether
such standards and practices are serving the best interests
of shareholders. Such study and review shall include an
analysis of—
(1) whether current standards and practices pro-
mote full disclosure of relevant information to share-
holders;
(2) whether corporate codes of ethics are ade-
quate to protect shareholders, and to what extent devi-
ations from such codes are tolerated;
(3) to what extent conflicts of interests are ag-
gressively reviewed, and whether adequate means for
redressing such conflicts exist;
(4) to what extent sufficient legal protections
exist or should be adopted to ensure that any man-
ager who attempts to manipulate or unduly influence
an audit will be subject to appropriate sanction and
liability, including liability to investors or share-
holders pursuing a private cause of action for such
manipulation or undue influence;
(5) whether rules, standards, and practices relat-
ing to determining whether independent directors are
in fact independent are adequate;
(6) whether rules, standards, and practices relat-
ing to the independence of directors serving on audit
committees are uniformly applied and adequate to
protect investor interests;
(7) whether the duties and responsibilities of
audit committees should be established by the Com-
mission; and
(8) what further or additional practices or
standards might best protect investors and promote
the interests of shareholders.
(b) PARTICIPATION OF STATE REGULATORS.—In con-
ducting the study required under subsection (a), the Com-
mission shall seek the views of the securities and corporate
regulators of the various States.
(c) REPORT REQUIRED.—The Commission shall sub-
mit a report on the analysis required under subsection (a)
as a part of the Commission’s next annual report submitted
after the date of enactment of this Act.
SEC. 16. STUDY OF ENFORCEMENT ACTIONS.
(a) STUDY REQUIRED.—The Commission shall review
and analyze all enforcement actions by the Commission in-
volving violations of reporting requirements imposed under
the securities laws, and restatements of financial state-
ments, over the last five years to identify areas of reporting
that are most susceptible to fraud, inappropriate manipula-
tion, or inappropriate earnings management, such as rev-
enue recognition and the accounting treatment of off-bal-
ance sheet special purpose entities.
(b) REPORT REQUIRED.—The Commission shall re-
port its findings to the Committee on Financial Services
of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate within
180 days of the date of enactment of this Act and shall use
such findings to revise its rules and regulations, as nec-
essary. The report shall include a discussion of regulatory
or legislative steps that are recommended or that may be
necessary to address concerns identified in the study.
SEC. 17. STUDY OF CREDIT RATING AGENCIES.
(a) STUDY REQUIRED.—The Commission shall con-
duct a study of the role and function of credit rating agen-
cies in the operation of the securities market. Such study
shall examine—
(1) the role of the credit rating agencies in the
evaluation of issuers of securities;
(2) the importance of that role to investors and
the functioning of the securities markets;
(3) any impediments to the accurate appraisal
by credit rating agencies of the financial resources
and risks of issuers of securities;
(4) any measures which may be required to im-
prove the dissemination of information concerning
such resources and risks when credit rating agencies
announce credit ratings;
(5) any barriers to entry into the business of act-
ing as a credit rating agency, and any measures
needed to remove such barriers; and
(6) any conflicts of interest in the operation of
credit rating agencies and measures to prevent such
conflicts or ameliorate the consequences of such con-
flicts.
(b) REPORT REQUIRED.—The Commission shall sub-
mit a report on the analysis required by subsection (a) to
the President, the Committee on Financial Services of the
House of Representatives, and the Committee on Banking,
Housing, and Urban Affairs of the Senate within 180 days
after the date of enactment of this Act. The report shall in-
clude a discussion of regulatory or legislative steps that are
recommended or that may be necessary to address concerns
identified in the study.
SEC. 18. STUDY OF INVESTMENT BANKS
(a) GAO STUDY.—The Comptroller General shall con-
duct a study on the role played by investment banks and
financial advisors in assisting public companies in manip-
ulating their earnings and obfuscating their true financial
condition. The study should address the role of the invest-
ment banks—
(1) in the collapse of the Enron Corporation, in-
cluding with respect to the design and implementa-
tion of derivatives transactions, transactions involv-
ing special purpose vehicles, and other financing ar-
rangements that may have had the effect of altering
the company’s reported financial statements in ways
that obscured the true financial picture of the com-
pany;
(2) in the failure of Global Crossing, including
with respect to transactions involving swaps of fiber
optic cable capacity, in designing transactions that
may have had the effect of altering the company’s re-
ported financial statements in ways that obscured the
true financial picture of the company; and
(3) generally, in creating and marketing trans-
actions designed solely to enable companies to manip-
ulate revenue streams, obtain loans, or move liabil-
ities off balance sheets without altering the economic
and business risks faced by the companies or any
other mechanism to obscure a company’s financial
picture.
(b) REPORT.—The General Accounting Office shall re-
port to the Congress within 180 days after the date of enact-
ment of this Act on the results of the study required by this
section. The report shall include a discussion of regulatory
or legislative steps that are recommended or that may be
necessary to address concerns identified in the study.
SEC. 19. STUDY OF MODEL RULES FOR ATTORNEYS OF
ISSUERS.
(a) IN GENERAL.—The Comptroller General shall con-
duct a study of the Model Rules of Professional Conduct
promulgated by the American Bar Association and rules
of professional conduct applicable to attorneys established
by the Commission to determine—
(1) whether such rules provide sufficient guid-
ance to attorneys representing corporate clients who
are issuers required to file periodic disclosures under
section 13 or 15 of the Securities Exchange Act of
1934 (15 U.S.C. 78m, 78o), as to the ethical respon-
sibilities of such attorneys to—
(A) warn clients of possible fraudulent or il-
legal activities of such clients and possible con-
sequences of such activities;
(B) disclose such fraudulent or illegal ac-
tivities to appropriate regulatory or law enforce-
ment authorities; and
(C) manage potential conflicts of interests
with clients; and
(2) whether such rules provide sufficient protec-
tion to corporate shareholders, especially with regards
to conflicts of interest between attorneys and their
corporate clients.
(b) REPORT REQUIRED.—The Comptroller General
shall report to the Committee on Financial Services of the
House of Representatives and the Committee on Banking,
Housing, and Urban Affairs of the Senate on the results
of the study required by this section. Such report shall in-
clude any recommendations of the General Accounting Of-
fice with regards to—
(1) possible changes to the Model Rules and the
rules of professional conduct applicable to attorneys
established by the Commission to provide increased
protection to shareholders;
(2) whether restrictions should be imposed to re-
quire that an attorney, having represented a corpora-
tion or having been employed by a firm which rep-
resented a corporation, may not be employed as gen-
eral counsel to that corporation until a certain period
of time has expired; and
(3) regulatory or legislative steps that are rec-
ommended or that may be necessary to address con-
cerns identified in the study.
SEC. 20. ENFORCEMENT AUTHORITY.
For the purposes of enforcing and carrying out this
Act, the Commission shall have all of the authorities grant-
ed to the Commission under the securities laws. Actions of
the Commission under this Act, including actions on rules
or regulations, shall be subject to review in the same manner
as actions under the securities laws.
SEC. 21. EXCLUSION FOR INVESTMENT COMPANIES.
Sections 4, 6, 9, and 15 of this Act shall not apply
to an investment company registered under section 8 of the
Investment Company Act of 1940 (15 U.S.C. 80a–8).
SEC. 22. DEFINITIONS.
As used in this Act:
(1) BLACKOUT PERIOD.—The term ‘‘blackout pe-
riod’’ with respect to the equity securities of any
issuer—
(A) means any period during which the
ability of at least fifty percent of the partici-
pants or beneficiaries under all applicable indi-
vidual account plans maintained by the issuer to
purchase (or otherwise acquire) or sell (or other-
wise transfer) an interest in any equity of such
issuer is suspended by the issuer or a fiduciary
of the plan; but
(B) does not include—
(i) a period in which the employees of
an issuer may not allocate their interests in
the individual account plan due to an ex-
press investment restriction—
(I) incorporated into the indi-
vidual account plan; and
(II) timely disclosed to employees
before joining the individual account
plan or as a subsequent amendment to
the plan; or
(ii) any suspension described in sub-
paragraph (A) that is imposed solely in
connection with persons becoming partici-
pants or beneficiaries, or ceasing to be par-
ticipants or beneficiaries, in an applicable
individual account plan by reason of a cor-
porate merger, acquisition, divestiture, or
similar transaction.
(2) 
BOARDS
OF
ACCOUNTANCY
OF
THE
STATES.—The term ‘‘boards of accountancy of the
States’’ means any organization or association char-
tered or approved under the law of any State with re-
sponsibility for the registration, supervision, or regu-
lation of accountants.
(3) 
COMMISSION.—The 
term 
‘‘Commission’’
means the Securities and Exchange Commission.
(4) INDIVIDUAL ACCOUNT PLAN.—The term ‘‘in-
dividual account plan’’ has the meaning provided
such term in section 3(34) of the Employee Retire-
ment Income Security Act of 1974 (29 U.S.C.
1002(34)).
(5) ISSUER.—The term ‘‘issuer’’ shall have the
meaning set forth in section 2(a)(4) of the Securities
Act of 1933 (15 U.S.C. 77b(a)(4)).
(6) PERSON
ASSOCIATED
WITH
AN
ACCOUNT-
ANT.—The term ‘‘person associated with an account-
ant’’ means any partner, officer, director, or manager
of such accountant (or any person occupying a simi-
lar status or performing similar functions), any per-
son directly or indirectly controlling, controlled by, or
under common control with such accountant, or any
employee of such accountant who performs a super-
visory role in the auditing process.
(7) RECOGNIZED PUBLIC REGULATORY ORGANI-
ZATION.—The term ‘‘recognized public regulatory or-
ganization’’ means a public regulatory organization
that the Commission has recognized as meeting the
criteria established by the Commission under sub-
section (b) of section 2.
(8) SECURITIES
LAWS.—The term ‘‘securities
laws’’ means the Securities Act of 1933 (15 U.S.C.
77a et seq.), the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.), the Trust Indenture Act of 1939
(15 U.S.C. 77aaa et seq.), the Investment Company
Act of 1940 (15 U.S.C. 80a–1 et seq.), the Investment
Advisers Act of 1940 (15 U.S.C. 80b et seq.), and the
Securities Investor Protection Act of 1970 (15 U.S.C.
78aaa et seq.), notwithstanding any contrary provi-
sion of any such Act.
Union Calendar No. 247
107TH CONGRESS
2D SESSION
H. R. 3763
[Report No. 107–414]
A BILL
To protect investors by improving the accuracy and
reliability of corporate disclosures made pursuant
to the securities laws, and for other purposes.
APRIL 22, 2002
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union,
and ordered to be printed