I 118th CONGRESS 1st Session H. R. 4600 IN THE HOUSE OF REPRESENTATIVES July 13, 2023 Mr. Barr introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Investment Advisers Act of 1940 to specify requirements concerning the consideration of pecuniary and non-pecuniary factors, to require the Securities and Exchange Commission to conduct a study on climate change and other environmental disclosures in the municipal bond market, and to require the Securities and Exchange Commission to conduct a study on the solicitation of municipal securities business.

1. Short title This Act may be cited as the Protecting Retail Investors’ Savings Act . 2. Best interest based on pecuniary factors (a) In general Section 211(g) of the Investment Advisers Act of 1940 ( 15 U.S.C. 80b–11(g) ) is amended by adding at the end the following: (3) Best interest based on pecuniary factors (A) In general For purposes of paragraph (1), the best interest of a customer shall be determined using pecuniary factors, which may not be subordinated to or limited by non-pecuniary factors, unless the customer provides informed consent, in writing, that such non-pecuniary factors be considered. (B) Disclosure of pecuniary factors If a customer provides a broker, dealer, or investment adviser with the informed consent to consider non-pecuniary factors described under subparagraph (A), the broker, dealer, or investment adviser shall— (i) disclose the expected pecuniary effects to the customer over a time period selected by the customer and not to exceed three years; and (ii) at the end of the time period described in clause (i), disclose, by comparison to a reasonably comparable index or basket of securities selected by the customer, the actual pecuniary effects of that time period, including all fees, costs, and other expenses incurred to consider non-pecuniary factors. (C) Pecuniary factor defined In this paragraph, the term pecuniary factor means a factor that a fiduciary prudently determines is expected to have a material effect on the risk or return of an investment based on appropriate investment horizons. . (b) Rulemaking Not later than the end of the 12-month period beginning on the date of enactment of this Act, the Securities and Exchange Commission shall revise or issue such rules as may be necessary to implement the amendment made by subsection (a). (c) Applicability The amendment made by subsection (a) shall apply to actions taken by a broker, dealer, or investment adviser beginning on the date that is 12 months after the date of enactment of this Act. 3. Study on climate change and other environmental disclosures in municipal bond market (a) In general The Securities and Exchange Commission shall— (1) conduct a study to determine the extent to which issuers of municipal securities (as such term is defined in section 3(a)(29) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c(a)(29) ) make disclosures to investors regarding climate change and other environmental matters; and (2) solicit public comment with respect to such study. (b) Contents The study required under subsection (a) shall consider and analyze— (1) the frequency with which disclosures described in subsection (a)(1) are made; (2) whether such disclosures made by issuers of municipal securities in connection with offerings of securities align with such disclosures made by issuers of municipal securities in other contexts or to audiences other than investors; (3) any voluntary or mandatory disclosure standards observed by issuers of municipal securities in the course of making such disclosures; (4) the degree to which investors consider such disclosures in connection with making an investment decision; and (5) such other information as the Securities and Exchange Commission determines appropriate. (c) Report Not later than 1 year after the date of the enactment of this Act, the Securities and Exchange Commission shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report that includes— (1) the results of the study required under this section; (2) a detailed discussion of the financial risks to investors from investments in municipal securities; (3) whether such risks are adequately disclosed to investors; and (4) recommended regulatory or legislative steps to address any concerns identified in the study. 4. Study on solicitation of municipal securities business (a) In general The Securities and Exchange Commission shall— (1) conduct a study on the effectiveness of each covered rule in preventing the payment of funds to elected officials or candidates for elected office in exchange for the receipt of government business in connection with the offer or sale of municipal securities; and (2) solicit public comment with respect to such study. (b) Contents The study required under subsection (a) shall consider and analyze— (1) the effectiveness of each covered rule, including whether each covered rule accomplishes the intended effect of such covered rule and has any unintended adverse effects; (2) the frequency and scope of enforcement actions undertaken pursuant to each covered rule; (3) the degree to which— (A) persons subject to each covered rule— (i) have in effect policies and procedures intended to ensure compliance with each such covered rule; and (ii) are disadvantaged from participating in the political process generally and in relation to persons who solicit or receive government business or government licenses, permits, and approvals other than in connection with the offer or sale of municipal securities; and (B) other State and Federal laws and regulations impact the solicitation of municipal securities business; and (4) such other information as the Securities and Exchange Commission determines appropriate. (c) Report Not later than 1 year after the date of the enactment of this Act, the Securities and Exchange Commission shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report that includes— (1) the results of the study required under this section; (2) an analysis of the extent to which persons affiliated with small businesses, as well as persons affiliated with minority and women opened businesses, have been affected by the covered rules; and (3) recommended regulatory or legislative steps to address any concerns identified in the study. (d) Definitions In this section: (1) Covered rule The term covered rule means— (A) Rule G–38 of the Municipal Securities Rulemaking Board; and (B) Rule 206(4)–5 (17 CFR 275.206(4)–5). (2) Municipal securities The term municipal securities has the meaning given the term in section 3(a)(29) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c(a)(29) ).