Title: Investor Freedom Act of 2021
Policy area: Finance and Financial Sector

Summary:
Investor Freedom Act of 2021
This bill prohibits banning the practice of payment for order flow (i.e., payment received by a stock brokerage firm for directing orders to another firm that buys and sells stock).

[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 3102 Introduced in Senate (IS)]

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117th CONGRESS
  1st Session
                                S. 3102

  To amend the Securities Exchange Act of 1934 to preserve commission-
 free trading and investor freedom for the people of the United States 
  by prohibiting the Securities and Exchange Commission from banning 
            payment for order flow, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 28, 2021

  Mr. Toomey introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
  To amend the Securities Exchange Act of 1934 to preserve commission-
 free trading and investor freedom for the people of the United States 
  by prohibiting the Securities and Exchange Commission from banning 
            payment for order flow, 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 ``Investor Freedom Act of 2021''.

SEC. 2. SAFE HARBOR FOR PAYMENT FOR ORDER FLOW.

    Section 28 of the Securities Exchange Act of 1934 (15 U.S.C. 78bb) 
is amended by adding at the end the following:
    ``(g) Payment for Order Flow.--
            ``(1) Definition.--In this subsection, the term `payment 
        for order flow' has the meaning given the term in section 
        240.10b-10(d) of title 17, Code of Federal Regulations, as in 
        effect on the date of enactment of this subsection.
            ``(2) Applicability.--
                    ``(A) In general.--No broker or dealer, or any 
                person associated with a broker or dealer, using the 
                mails, or any means or instrumentality of interstate 
                commerce, shall be deemed to have acted unlawfully or 
                to have breached a duty under State or Federal law 
                solely by reason of having received payment for order 
                flow.
                    ``(B) Restriction.--Neither the Commission nor any 
                national securities exchange or registered securities 
                association may promulgate any rule or regulation that 
                prohibits, limits, or directs the receipt or use of 
                payment for order flow by--
                            ``(i) a broker or dealer; or
                            ``(ii) any person associated with a broker 
                        or dealer.
                    ``(C) Rule of construction.--Nothing in this 
                subsection may be construed to impair or limit the 
                power of the Commission, any national securities 
                exchange, or any registered securities association with 
                respect to any other duties applicable to the execution 
                of a customer's order by a broker or dealer.''.
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