I 
117TH CONGRESS 
2D SESSION 
H. R. 8462 
To require the Securities and Exchange Commission, when developing rules 
and regulations about disclosures to retail investors, to conduct investor 
testing, including a survey and interviews of retail investors, and for 
other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 21, 2022 
Mr. CASTEN introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To require the Securities and Exchange Commission, when 
developing rules and regulations about disclosures to re-
tail investors, to conduct investor testing, including a 
survey and interviews of retail investors, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘SEC Disclosure Effec-
tiveness Testing Act’’. 
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SEC. 2. DISCLOSURE TESTING. 
(a) IN GENERAL.—Section 23(a) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78w(a)) is amended by 
adding at the end the following: 
‘‘(4) INVESTOR TESTING.— 
‘‘(A) IN GENERAL.—The Commission shall en-
gage in investor testing prior to issuing any rule or 
regulation which designates documents or informa-
tion to be disclosed under the securities laws, if such 
documents or information are required to be deliv-
ered to, and are intended or substantially likely to 
be materially relied upon by, a retail investor 
when— 
‘‘(i) selecting a broker-dealer or investment 
adviser, evaluating their services and fees, or 
materially altering a brokerage or advisory rela-
tionship; 
‘‘(ii) assessing a securities recommendation 
or investment advice provided by a broker-deal-
er or investment adviser; 
‘‘(iii) making a decision to purchase or sell 
a security; or 
‘‘(iv) such other circumstances as the Com-
mission may, with input from the Investor Ad-
vocate, determine appropriate for the protection 
of retail investors. 
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‘‘(B) 
EXEMPTION
FOR
CERTAIN
DISCLO-
SURES.—This section shall not apply to— 
‘‘(i) disclosures made pursuant to Regula-
tions S–K and S–X (including Industry 
Guides), Regulation 14A, Form N–PX, Form 
10–K, Form 10–Q, Form 8–K, Form SD, 
Form N–PORT, Form PF, Regulation SBSR, 
disclosures mandated by or jointly with the 
Board of Governors of the Federal Reserve Sys-
tem or the Financial Stability Oversight Coun-
cil, or successors thereto; or 
‘‘(ii) any other documents or information 
that the Commission, with input from the In-
vestor Advocate, determines are outside the in-
tended scope and purposes of this Act. 
‘‘(C) COMMISSION AUTHORITY TO CONDUCT AD-
DITIONAL TESTING.—This section shall not be con-
strued to limit the Commission’s ability to conduct 
any investor testing on any other documents or in-
formation not subject to this section 23(a), provided 
that any such investor testing shall not be subject to 
the requirements of this section 23(a). 
‘‘(D) CONTENTS.—Investor testing conducted 
pursuant to subparagraph (A) shall include the fol-
lowing: 
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‘‘(i) Qualitative testing in the form of one- 
on-one cognitive interviews of retail investors 
about documents or information, or samples of 
such documents or information, to be provided. 
‘‘(ii) Such other forms of testing that the 
Commission, with input from the Investor Ad-
vocate, deems appropriate for evaluating the ef-
fectiveness of retail disclosures. 
‘‘(iii) Analysis and publication in the Fed-
eral Register of the results of the testing. 
‘‘(iv) An opportunity for the public to com-
ment on such results published in the Federal 
Register. 
‘‘(v) A consideration of unique challenges 
faced by retail investors age 65 or older. 
‘‘(E) SUBSTANTIVE CHANGES.—If the Commis-
sion, in the period between engaging in investor test-
ing and publishing a final rule, makes substantive 
changes to such rule that the Commission deter-
mines would have a significant impact on retail in-
vestors, and such changes were not already investor 
tested, the Commission shall again engage in inves-
tor testing related to such changes. 
‘‘(F) PUBLIC AVAILABILITY OF RETAIL TEST-
ING
RESULTS.—The Commission shall make the 
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data and results of any investor testing performed 
pursuant to this paragraph available to the public. 
‘‘(G) RULES OF CONSTRUCTION.— 
‘‘(i) The determination that some or all of 
a document or information is deemed to be sub-
ject to this paragraph shall not forestall the de-
termination that such document or information 
may also be used or relied upon by the public, 
market participants other than retail investors, 
or government agencies. 
‘‘(ii) The Commission may, in consultation 
with the Investor Advocate, determine which, if 
any, components of such document or informa-
tion are substantially likely to be relied on by 
retail investors for the purposes outlined in 
paragraph (4)(A) above and focus testing under 
this paragraph on those components of the dis-
closure. 
‘‘(iii) Notwithstanding clause (ii) above, 
where any information subject to testing under 
this paragraph may be used or relied upon by 
the public, market participants other than retail 
investors, or government agencies, the results of 
testing made pursuant to this paragraph shall 
not provide grounds for reducing or eliminating 
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(including any undermining of reliability of and 
accountability for) the information that existing 
or proposed regulation requires or would re-
quire be made available to the public, market 
participants other than retail investors, and 
government agencies, whether or not such infor-
mation is delivered to retail investors. 
‘‘(H) RETAIL
INVESTOR
DEFINED.—For the 
purposes of this paragraph, the term ‘retail investor’ 
means any investor that is not an institutional inves-
tor.’’. 
(b) PARTICIPATION OF INVESTOR ADVOCATE.—Sec-
tion 4(g) of the Securities Exchange Act of 1934 (15 
U.S.C. 78d(g)) is amended— 
(1) in paragraph (4)— 
(A) in subparagraph (D)(ii), by striking 
‘‘and’’ at the end; 
(B) by redesignating subparagraph (E) as 
subparagraph (F); and 
(C) by inserting after subparagraph (D) 
the following: 
‘‘(E) engage in investor testing— 
‘‘(i) to carry out the functions of the 
Office; and 
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‘‘(ii) pursuant to section 23(a)(4), as 
appropriate; and’’; 
(2) by adding at the end the following: 
‘‘(9) PUBLICATION OF DATA AND RESULTS OF 
INVESTOR TESTING.—With respect to any investor 
testing carried out by the Investor Advocate pursu-
ant to paragraph (4)(E), the Investor Advocate may 
make the data and results of such investor testing 
available to the public, without further review or ed-
iting by the Commission. 
‘‘(10) PERSONNEL.—If the Investor Advocate 
decides, within its sole discretion, to conduct testing 
under this section, the Investor Advocate may do so 
and the Commission shall provide the Office of the 
Investor Advocate with sufficient personnel and 
funding necessary to carry out such testing. Such 
testing may qualify as the testing covered by this 
section, provided that all requirements of the section 
are met.’’. 
(c) PRIOR RULES.— 
(1) IN GENERAL.—For any final rule or regula-
tion issued by the Securities and Exchange Commis-
sion (in this subsection referred to as the ‘‘Commis-
sion’’) before the date of the enactment of this Act 
that would be subject to investor testing under sec-
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tion 23(a)(4) of the Securities Exchange Act of 
1934, had such rule been issued on or after the date 
of enactment of this Act, the Commission shall per-
form investor testing with respect to such rule or 
regulation that includes the contents described in 
such section 23(a)(4). 
(2) SCHEDULE.—The Commission shall, not 
later than 6 months after the date of the enactment 
of this Act, with input from the Investor Advocate, 
establish a schedule for completing any investor test-
ing required under paragraph (1) that prioritizes 
testing of any final rules and regulations that des-
ignate documents or information central to retail in-
vestor decision making, and in particular prioritize 
the testing of documents or information required to 
be delivered to retail investors in the form of sum-
mary documents or summary sections of documents 
including for the purpose of determining whether 
and how such summary documents can achieve the 
goals of informed investor decision-making in the 
circumstances set forth in section 23(a)(4) of the 
Securities Exchange Act of 1934 while maintaining 
full accessibility by retail investors, the public, other 
market participants, and government regulators to 
the full range of documents and information that 
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they may utilize or rely on, whether or not such doc-
uments or information are required to be delivered 
to retail investors. 
(3) REPORT.—The Commission shall, with 
input from the Investor Advocate, issue a report to 
Congress each year containing the following: 
(A) The status of any investor testing re-
quired under paragraph (1) initiated within the 
last year or otherwise ongoing. 
(B) The results of any investor testing 
completed under paragraph (1) within the last 
year. 
(C) Any priorities the Commission has, 
based on results of investor testing required by 
paragraph (1), for— 
(i) revising any proposed or final rule 
or regulation based on the results of test-
ing; 
(ii) initiating any rulemaking or ac-
tions arising from the results of the test-
ing; and 
(iii) the Investor Advocate’s views on 
the above priorities and any such other 
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matters arising from the testing or results 
of testing. 
Æ 
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