Promoting Diverse Investment Advisers Act
Bill: H.R.9705 | Sponsor: Rep. Beatty, Joyce (D-OH)
Policy area: Finance and Financial Sector

Summary:
Promoting Diverse Investment Advisers Act
This bill requires the Federal Reserve Board to set goals related to woman-, minority-, or veteran-owned or controlled firms in certain investment management agreements made related to the board's authority in unusual and exigent circumstances.

To amend the Federal Reserve Act to require the Board of Governors of 
 the Federal Reserve System to establish goals for the use of diverse 
  investment advisers, brokers, and dealers in investment management 
   agreements related to the Board of Governor's unusual and exigent 
            circumstances authority, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Promoting Diverse Investment 
Advisers Act''.

SEC. 2. REQUIREMENTS FOR INVESTMENT MANAGEMENT AGREEMENTS.

    Section 13(3) of the Federal Reserve Act (12 U.S.C. 347d(3)) is 
amended by adding at the end the following:
                    ``(F) Requirements for investment management 
                agreements.--
                            ``(i) In general.--With respect to any 
                        investment management agreement entered into by 
                        the Board of Governors of the Federal Reserve 
                        System with respect to any program or facility 
                        established under this paragraph, the Board of 
                        Governors shall set goals in such agreement 
                        that require investment managers, to the 
                        maximum extent possible, to utilize--
                                    ``(I) investment advisers and sub-
                                advisers that are diverse individual-
                                owned and controlled firms as 
                                intermediaries; and
                                    ``(II) brokers and dealers that are 
                                diverse individual-owned and controlled 
                                firms.
                            ``(ii) Report.--The Board of Governors 
                        shall include, in the report required under 
                        subparagraph (C), a description of goals set 
                        pursuant to clause (i).
                            ``(iii) Definitions.--For the purposes of 
                        this subparagraph:
                                    ``(I) Affiliated person.--The term 
                                `affiliated person' has the meaning 
                                given that term under section 2(a) of 
                                the Investment Company Act of 1940.
                                    ``(II) Broker.--The term `broker' 
                                has the meaning given that term under 
                                section 3 of the Securities Exchange 
                                Act of 1934.
                                    ``(III) Dealer.--The term `dealer' 
                                has the meaning given that term under 
                                section 3 of the Securities Exchange 
                                Act of 1934.
                                    ``(IV) Diverse individual-owned and 
                                controlled firm.--The term `diverse 
                                individual-owned and controlled firm' 
                                means a firm--
                                            ``(aa) which is at least 51 
                                        percent owned by one or more 
                                        individuals who are women, 
                                        minorities, or veterans; or
                                            ``(bb) whose management and 
                                        daily business operations are--

                                                    ``(AA) in the case 
                                                of a firm the shares of 
                                                which are traded on a 
                                                national securities 
                                                exchange, controlled by 
                                                a board with a majority 
                                                of members who are 
                                                women, minorities, or 
                                                veterans; and

                                                    ``(BB) in the case 
                                                of any other firm, at 
                                                least 51 percent 
                                                controlled by one or 
                                                more individuals who 
                                                are women, minorities, 
                                                or veterans.

                                    ``(V) Investment adviser.--The term 
                                `investment adviser' has the meaning 
                                given the term in section 202(a)(11) of 
                                the Investment Advisers Act of 1940.
                                    ``(VI) Minority.--The term 
                                `minority' has the meaning given the 
                                term in section 308(b) of the Financial 
                                Institutions Reform, Recovery, and 
                                Enforcement Act of 1989 and also 
                                includes any indigenous person in the 
                                United States or its territories.
                                    ``(VII) Veteran.--The term 
                                `veteran' has the meaning given the 
                                term in section 101 of title 38, United 
                                States Code.''.
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