ground exists for declaring such contract, 
agreement, or understanding void or void-
able in a suit between the claimant and the 
debtor.’’; 
(2) in paragraph (4), by inserting after the first 
sentence the following new sentence: ‘‘In the case of 
portfolio margining accounts of customers that are 
carried as securities accounts pursuant to a portfolio 
margining program approved by the Commission, 
such term shall also include futures contracts and 
options on futures contracts received, acquired, or 
held by or for the account of a debtor from or for 
such accounts, and the proceeds thereof.’’; 
(3) in paragraph (9), by inserting before ‘‘Such 
term’’ in the matter following subparagraph (L) the 
following: ‘‘The term includes revenues earned by a 
broker or dealer in connection with transactions in 
customers’ portfolio margining accounts carried as 
securities accounts pursuant to a portfolio margining 
program approved by the Commission.’’; and 
(4) in paragraph (11)— 
(A) by amending subparagraph (A) to read 
as follows: 
‘‘(A) calculating the sum which would have 
been owed by the debtor to such customer if the 
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debtor had liquidated, by sale or purchase on 
the filing date— 
‘‘(i) all securities positions of such 
customer (other than customer name secu-
rities reclaimed by such customer); and 
‘‘(ii) all positions in futures contracts 
and options on futures contracts held in a 
portfolio margining account carried as a 
securities account pursuant to a portfolio 
margining program approved by the Com-
mission; minus’’; and 
(B) by inserting before ‘‘In determining’’ 
in the matter following subparagraph (C) the 
following: ‘‘A claim for a commodity futures 
contract received, acquired, or held in a port-
folio margining account pursuant to a portfolio 
margining program approved by the Commis-
sion, or a claim for a security futures contract, 
shall be deemed to be a claim for the mark-to- 
market (variation) payments due with respect 
to such contract as of the filing date, and such 
claim shall be treated as a claim for cash.’’. 
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SEC. 511. RISK-BASED PREMIUMS. 
Section 4(c) of the Securities Investor Protection Act 
of 1970 (15 U.S.C. 78ddd(c)) is amended by adding at 
the end the following new paragraph: 
‘‘(4) RISK-BASED ASSESSMENT SYSTEM.— 
‘‘(A) IN
GENERAL.—Assessments made 
pursuant to paragraph (2) shall made using a 
risk-based assessment system. 
‘‘(B) RISK-BASED
ASSESSMENT
SYSTEM 
DEFINED.—For purposes of this paragraph, the 
term ‘risk-based assessment system’ means a 
system for calculating a member’s assessment 
based on— 
‘‘(i) the probability that the fund will 
incur a loss with respect to the member, 
taking into consideration the risks attrib-
utable to— 
‘‘(I) the size of the member; 
‘‘(II) the number of enforcement 
and compliance actions taken against 
such member during the previous 5- 
year period by SIPC, the Commission, 
State securities regulators, and other 
Federal and State financial regu-
lators; 
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‘‘(III) the number of years such 
member has been in operation; and 
‘‘(IV) any other factors SIPC de-
termines are relevant to assessing 
such probability; 
‘‘(ii) the likely amount of any such 
loss; and 
‘‘(iii) the revenue needs of the fund. 
‘‘(C) SEPARATE ASSESSMENT SYSTEMS.— 
SIPC may establish separate risk-based assess-
ment systems for large and small members of 
SIPC. 
‘‘(D) MODIFICATIONS TO THE RISK-BASED 
ASSESSMENT
SYSTEM
ALLOWED
ONLY
AFTER 
NOTICE AND COMMENT.—In revising or modi-
fying the risk-based assessment system at any 
time after the date of the enactment of this 
paragraph, SIPC may implement such revisions 
or modification in final form only after notice 
and opportunity for comment.’’. 
SEC. 512. BUDGETARY TREATMENT OF COMMISSION LOANS 
TO SIPC. 
Section 4(g) of the Securities Investor Protection Act 
of 1970 (15 U.S.C. 78ddd(g)) is amended by adding at 
the end the following: ‘‘Any loan made by the Commission 
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100 
to SIPC under this subsection shall not be considered to 
result in a new direct loan obligation or a new loan guar-
antee commitment for purposes of section 504 of the Fed-
eral Credit Reform Act of 1990.’’ 
TITLE VI—SARBANES-OXLEY ACT 
AMENDMENTS 
SEC. 601. PUBLIC COMPANY ACCOUNTING OVERSIGHT 
BOARD OVERSIGHT OF AUDITORS OF NON- 
PUBLIC BROKERS AND DEALERS. 
(a) DEFINITIONS.—Title I of the Sarbanes-Oxley Act 
of 2002 is amended by adding at the end the following 
new section: 
‘‘SEC. 110. DEFINITIONS. 
‘‘For the purposes of this title, and notwithstanding 
section 2: 
‘‘(1) AUDIT.—The term ‘audit’ means an exam-
ination of the financial statements, reports, docu-
ments, or notices, of any issuer, broker, or dealer by 
an independent public accounting firm in accordance 
with the rules of the Board or the Commission (or, 
for the period preceding the adoption of applicable 
rules of the Board under section 103, in accordance 
with then-applicable generally accepted auditing and 
related standards for such purposes), for the pur-
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101 
pose of expressing an opinion on such financial 
statements, reports, documents, or notices. 
‘‘(2) AUDIT REPORT.—The term ‘audit report’ 
means a document, report, notice, or other record— 
‘‘(A) prepared following an audit per-
formed for purposes of compliance by an issuer, 
broker, or dealer with the requirements of the 
securities laws; and 
‘‘(B) in which a public accounting firm ei-
ther— 
‘‘(i) sets forth the opinion of that firm 
regarding a financial statement, report, no-
tice, other document, procedures, or con-
trols; or 
‘‘(ii) asserts that no such opinion can 
be expressed. 
‘‘(3) PROFESSIONAL
STANDARDS.—The term 
‘professional standards’ means— 
‘‘(A) accounting principles that are— 
‘‘(i) established by the standard set-
ting body described in section 19(b) of the 
Securities Act of 1933, as amended by this 
Act, or prescribed by the Commission 
under section 19(a) of that Act (15 U.S.C. 
17a(s)) or section 13(b) of the Securities 
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102 
Exchange Act of 1934 (15 U.S.C. 78a(m)); 
and 
‘‘(ii) relevant to audit reports for par-
ticular issuers, brokers, or dealers, or dealt 
with in the quality control system of a par-
ticular registered public accounting firm; 
and 
‘‘(B) auditing standards, standards for at-
testation engagements, quality control policies 
and procedures, ethical and competency stand-
ards, and independence standards (including 
rules implementing title II) that the Board or 
the Commission determines— 
‘‘(i) relate to the preparation or 
issuance of audit reports for issuers, bro-
kers, or dealers; and 
‘‘(ii) are established or adopted by the 
Board under section 103(a), or are pro-
mulgated as rules of the Commission. 
‘‘(4) BROKER.—The term ‘broker’ means a 
broker (as such term is defined in section 3(a)(4) of 
the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)(4))) that is required to file a balance sheet, 
income statement, or other financial statement 
under section 17(e)(1)(A) of such Act (15 U.S.C. 
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103 
78q(e)(1)(A)), where such balance sheet, income 
statement, or financial statement is required to be 
certified by a registered public accounting firm. 
‘‘(5) DEALER.—The term ‘dealer’ means a 
dealer (as such term is defined in section 3(a)(5) of 
the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a)(5))) that is required to file a balance sheet, 
income statement, or other financial statement 
under section 17(e)(1)(A) of such Act (15 U.S.C. 
78q(e)(1)(A)), where such balance sheet, income 
statement, or financial statement is required to be 
certified by a registered public accounting firm. 
‘‘(6) SELF-REGULATORY
ORGANIZATION.—The 
term ‘self-regulatory organization’ has the same 
meaning as in section 3(a)(26) of the Securities Ex-
change Act of 1934 (15 U.S.C. 78c(a)(26)).’’. 
(b) ESTABLISHMENT AND ADMINISTRATION OF THE 
PUBLIC COMPANY ACCOUNTING OVERSIGHT BOARD.— 
Section 101 of such Act is amended— 
(1) by striking ‘‘issuers’’ each place it appears 
and inserting ‘‘issuers, brokers, and dealers’’; 
(2) in subsection (a), by striking ‘‘public com-
panies’’ and inserting ‘‘companies’’; and 
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104 
(3) in subsection (a), by striking ‘‘for compa-
nies the securities of which are sold to, and held by 
and for, public investors’’. 
(c) REGISTRATION WITH THE BOARD.—Section 102 
of such Act is amended— 
(1) by striking ‘‘Beginning 180 days after the 
date of the determination of the Commission under 
section 101(d), it’’ and inserting ‘‘It’’; 
(2) in subsections (a) and (b)(2)(G), by striking 
‘‘issuer’’ each place it appears and inserting ‘‘issuer, 
broker, or dealer’’; and 
(3) by striking ‘‘issuers’’ and inserting ‘‘issuers, 
brokers, and dealers’’. 
(d) AUDITING AND INDEPENDENCE.—Section 103(a) 
of such Act is amended— 
(1) in paragraph (1), by striking ‘‘and such eth-
ics standards’’ and inserting ‘‘such ethics standards, 
and such independence standards’’; 
(2) in paragraph (2)(A)(iii), by striking ‘‘de-
scribe in each audit report’’ and inserting ‘‘in each 
audit report for an issuer, describe’’; and 
(3) 
in 
paragraph 
(2)(B)(i), 
by 
striking 
‘‘issuers’’ and inserting ‘‘issuers, brokers, and deal-
ers’’. 
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105 
(e) INSPECTIONS OF REGISTERED PUBLIC ACCOUNT-
ING FIRMS.—Section 104 of such Act is amended— 
(1) in subsection (a), by striking ‘‘issuers’’ and 
inserting ‘‘issuers, brokers, and dealers’’; 
(2) in subsection (b)(1)(A)— 
(A) by striking ‘‘audit reports’’ and insert-
ing ‘‘audit reports on annual financial state-
ments’’; and 
(B) by striking ‘‘and’’; 
(3) in subsection (b)(1)(B)— 
(A) by striking ‘‘audit reports’’ and insert-
ing ‘‘audit reports on annual financial state-
ments’’; and 
(B) by striking the period on the end and 
inserting ‘‘; and’’; and 
(4) by adding at the end of subsection (b)(1) 
the following new subparagraph: 
‘‘(C) with respect to each registered public 
accounting firm that regularly provides audit 
reports and is not described under subpara-
graph (A) or (B), on a basis to be determined 
by the Board, by rule, consistent with the pub-
lic interest and protection of investors.’’. 
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106 
(f) 
INVESTIGATIONS
AND
DISCIPLINARY
PRO-
CEEDINGS.—Section 105(c)(7)(B) of such Act is amend-
ed— 
(1) by striking ‘‘any issuer’’ each place it ap-
pears and inserting ‘‘any issuer, broker, or dealer’’; 
and 
(2) by striking ‘‘an issuer under this sub-
section’’ and inserting ‘‘a registered public account-
ing firm under this subsection’’. 
(g) FOREIGN PUBLIC ACCOUNTING FIRMS.—Section 
106 of such Act is amended— 
(1) by striking ‘‘issuer’’ and inserting ‘‘issuer, 
broker, or dealer’’; and 
(2) by striking ‘‘issuers’’ and inserting ‘‘issuers, 
brokers, or dealers’’. 
(h) FUNDING.—Section 109 of such Act is amend-
ed— 
(1) in subsection (c)(2), by striking ‘‘subsection 
(i)’’ and inserting ‘‘subsection (j)’’; 
(2) in subsection (d)(2), by striking ‘‘allowing 
for differentiation among classes of issuers, as ap-
propriate’’ and inserting ‘‘and among brokers and 
dealers that are not issuers, in accordance with sub-
section (h), and allowing for differentiation among 
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107 
classes of issuers and brokers and dealers, as appro-
priate’’; 
(3) in subsection (d), by inserting at the end 
the following new paragraph: 
‘‘(3) BROKERS
AND
DEALERS.—The rules of 
the Board under paragraph (1) shall provide that 
the allocation, assessment, and collection by the 
Board (or an agent appointed by the Board) of the 
fee established under paragraph (1) with respect to 
brokers and dealers shall not begin until the first 
day of the first full fiscal year beginning after the 
date of the enactment of this paragraph.’’; 
(4) by redesignating subsections (h), (i), and (j) 
as subsections (i), (j), and (k), respectively; and 
(5) by inserting after subsection (g) the fol-
lowing new subsection: 
‘‘(h) ALLOCATION OF ACCOUNTING SUPPORT FEES 
AMONG BROKERS AND DEALERS.— 
‘‘(1) IN GENERAL.—Any amount due from bro-
kers and dealers that are not issuers (or a particular 
class of such brokers and dealers) under this section 
to fund the budget of the Board shall be allocated 
among and payable by such brokers and dealers (or 
such brokers and dealers in a particular class, as ap-
plicable). A broker or dealer’s allocation shall be in 
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108 
proportion to the broker or dealer’s net capital com-
pared to the total net capital of all brokers and deal-
ers that are not issuers, in accordance with the rules 
of the Board. 
‘‘(2) OBLIGATION
TO
PAY.—Every broker or 
dealer shall pay the share of a reasonable annual ac-
counting support fee or fees allocated to such broker 
or dealer under this section.’’. 
(i) REFERRAL OF INVESTIGATIONS TO A SELF-REGU-
LATORY ORGANIZATION.—Section 105(b)(4)(B) of the 
Sarbanes-Oxley Act of 2002 is amended— 
(1) by redesignating clauses (ii) and (iii) as 
clauses (iii) and (iv), respectively; and 
(2) by inserting after clause (i) the following 
new clause: 
‘‘(ii) to a self-regulatory organization, 
in the case of an investigation that con-
cerns an audit report for a broker or deal-
er that is subject to the jurisdiction of 
such self-regulatory organization;’’. 
(j) USE OF DOCUMENTS RELATED TO AN INSPEC-
TION
OR INVESTIGATION.—Section 105(b)(5)(B)(ii) of 
such Act is amended— 
(1) in subclause (III), by striking ‘‘and’’; 
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109 
(2) in subclause (IV), by striking the comma 
and inserting ‘‘; and’’; and 
(3) by inserting after subclause (IV) the fol-
lowing new subclause: 
‘‘(V) a self-regulatory organiza-
tion, with respect to an audit report 
for a broker or dealer that is subject 
to the jurisdiction of such self-regu-
latory organization,’’. 
SEC. 602. FOREIGN REGULATORY INFORMATION SHARING. 
(a) DEFINITION.—Section 2(a) of the Sarbanes- 
Oxley Act of 2002 (15 U.S.C. 7201(a)) is amended by 
inserting after paragraph (16) the following: 
‘‘(17) FOREIGN AUDITOR OVERSIGHT AUTHOR-
ITY.—The term ‘foreign auditor oversight authority’ 
means any governmental body or other entity em-
powered by a foreign government to conduct inspec-
tions of public accounting firms or otherwise to ad-
minister or enforce laws related to the regulation of 
public accounting firms.’’. 
(b) AVAILABILITY TO SHARE INFORMATION.—Sec-
tion 105(b)(5) of the Sarbanes-Oxley Act of 2002 (15 
U.S.C. 7215(b)(5)) is amended by adding at the end the 
following: 
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110 
‘‘(C) AVAILABILITY
TO
FOREIGN
OVER-
SIGHT
AUTHORITIES.—When in the Board’s 
discretion it is necessary to accomplish the pur-
poses of this Act or to protect investors, and 
without the loss of its status as confidential and 
privileged in the hands of the Board, all infor-
mation referred to in subparagraph (A) that re-
lates to a public accounting firm within the in-
spection authority, or other regulatory or law 
enforcement jurisdiction, of a foreign auditor 
oversight authority may be made available to 
the foreign auditor oversight authority if the 
foreign auditor oversight authority provides 
such assurances of confidentiality as the Board 
determines appropriate.’’. 
(c) 
CONFORMING
AMENDMENT.—Section 
105(b)(5)(A) of the Sarbanes-Oxley Act of 2002 (15 
U.S.C. 7215(b)(5)(A)) is amended by striking ‘‘subpara-
graph (B)’’ and inserting ‘‘subparagraphs (B) and (C)’’. 
SEC. 603. EXPANSION OF AUDIT INFORMATION TO BE PRO-
DUCED AND EXCHANGED WITH FOREIGN 
COUNTERPARTS. 
Section 106 of the Sarbanes-Oxley Act of 2002 (15 
U.S.C. 7216) is amended— 
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111 
(1) by amending subsection (b) to read as fol-
lows: 
‘‘(b) PRODUCTION OF DOCUMENTS.— 
‘‘(1) PRODUCTION BY FOREIGN FIRMS.—If a 
foreign public accounting firm issues an audit re-
port, performs audit work, conducts interim reviews, 
or performs material services, with respect to any 
issuer or its subsidiaries, the foreign public account-
ing firm shall produce its audit documentation and 
all other documents related to any such audit work 
or interim review to the Commission or the Board 
when requested by the Commission or the Board in 
connection with any investigation and the foreign 
public accounting firm shall be subject to the juris-
diction of the courts of the United States for pur-
poses of enforcement of any request of such docu-
ments. 
‘‘(2) OTHER
PRODUCTION.—Any registered 
public accounting firm that relies, in whole or in 
part, on the work of a foreign public accounting firm 
in issuing an audit report, performing audit work, 
conducting an interim review, or performing mate-
rial services, with respect to any issuer or its sub-
sidiaries, shall— 
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112 
‘‘(A) produce the foreign public accounting 
firm’s audit documentation and all other docu-
ments related to any such work in response to 
a request for production by the Commission or 
the Board; and 
‘‘(B) secure the agreement of any foreign 
public accounting firm to such production, as a 
condition of its reliance on the work of that for-
eign public accounting firm.’’; 
(2) by redesignating subsection (d) as sub-
section (f); and 
(3) by inserting after subsection (c) the fol-
lowing new subsections: 
‘‘(d) SERVICE OF REQUESTS OR PROCESS.—Any for-
eign public accounting firm that performs work for a do-
mestic registered public accounting firm shall furnish to 
the domestic firm a written irrevocable consent and power 
of attorney that designates the domestic firm as an agent 
upon whom may be served any process, pleadings, or other 
papers in any action brought to enforce this section. Any 
foreign firm that issues an audit report, performs audit 
work, performs interim reviews, or performs material serv-
ices, shall designate to the Commission or the Board an 
agent in the United States upon whom may be served any 
process, pleading, or other papers in any action brought 
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113 
to enforce this section or any request by the Commission 
or the Board under this section. 
‘‘(e) SANCTIONS.—A willful refusal to comply, in 
whole in or in part, with any request by the Commission 
or the Board under this section, shall be a violation of 
this Act.’’. 
SEC. 604. FAIR FUND AMENDMENTS. 
Section 308 of the Sarbanes-Oxley Act of 2002 (15 
U.S.C. 7246(a)) is amended— 
(1) by amending subsection (a) to read as fol-
lows: 
‘‘(a) CIVIL PENALTIES TO BE USED FOR THE RE-
LIEF OF VICTIMS.—If in any judicial or administrative ac-
tion brought by the Commission under the securities laws 
(as such term is defined in section 3(a)(47) of the Securi-
ties Exchange Act of 1934 (15 U.S.C. 78c(a)(47)), the 
Commission obtains a civil penalty against any person for 
a violation of such laws or the rules and regulations there-
under, the amount of such civil penalty shall, on the mo-
tion or at the direction of the Commission, be added to 
and become part of a disgorgement fund or other fund 
established for the benefit of the victims of such viola-
tion.’’; 
(2) in subsection (b), by— 
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