Retail Investor Protection Act

Bill: 114-hr-1090
Sponsor: full_name: Rep. Wagner, Ann [R-MO-2]
Introduced: 2015-02-25
Policy area: Finance and Financial Sector
Subjects: Administrative law and regulatory procedures

Banking and financial institutions regulation

Congressional oversight

Department of Labor

Employee benefits and pensions

Financial services and investments

Government information and archives

Securities and Exchange Commission (SEC)
Latest action: action_date: 2015-10-28
text: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Summaries:
action_date: 2015-02-25
action_desc: Introduced in House
text: <p><b>Retail Investor Protection Act</b></p> <p> Prohibits the Secretary of Labor from prescribing any regulation under the Employee Retirement Income Security Act of 1974 (ERISA) defining the circumstances under which an individual is considered a fiduciary until 60 days after the Securities and Exchange Commission (SEC) issues a final rule governing standards of conduct for brokers and dealers under specified law.</p> <p>Amends the Securities Exchange Act of 1934 to prohibit the SEC from promulgating a rule establishing an investment advisor standard of conduct as the standard of conduct of brokers and dealers before it reports to certain congressional committees whether:</p> <ul> <li>retail investors and other customers are being harmed due to brokers or dealers operating under different standards of conduct than those applicable to investment advisors under the Investment Advisers Act of 1940;</li> <li>alternative remedies will reduce any confusion or harm to retail investors due to brokers or dealers operating under such different standards of conduct;</li> <li>adoption of a uniform fiduciary standard of conduct for brokers or dealers and investment advisors would adversely impact their commissions and the availability of proprietary products offered by brokers and dealers, as well as the ability of brokers and dealers to engage in principal transactions with customers; and</li> <li>adoption of a uniform fiduciary standard of conduct for brokers or dealers and investment advisors would adversely impact retail investor access to personalized, cost-effective investment advice and recommendations. </li> </ul> <p>Requires the SEC: (1) to publish in the Federal Register formal findings that such rule would reduce retail customer confusion or harm due to standards of conduct applicable to brokers, dealers, and investment advisors; and (2) in proposing rules to consider the differences in the registration, supervision, and examination requirements applicable to brokers, dealers, and investment advisors. </p>

action_date: 2015-10-22
action_desc: Reported to House without amendment, Part I
text: <p>(This measure has not been amended since it was introduced. The summary has been expanded because action occurred on the measure.)</p> <p><b>Retail Investor Protection Act</b></p> <p> (Sec. 2) Prohibits the Secretary of Labor from prescribing any regulation under the Employee Retirement Income Security Act of 1974 (ERISA) defining the circumstances under which an individual is considered a fiduciary until 60 days after the Securities and Exchange Commission (SEC) issues a final rule governing standards of conduct for brokers and dealers under specified law.</p> <p>(Sec. 3) Amends the Securities Exchange Act of 1934 to prohibit the SEC from promulgating a rule establishing an investment advisor standard of conduct as the standard of conduct of brokers and dealers before it reports to certain congressional committees whether:</p> <ul> <li>retail investors and other customers are being harmed due to brokers or dealers operating under different standards of conduct than those applicable to investment advisors under the Investment Advisers Act of 1940;</li> <li>alternative remedies will reduce any confusion or harm to retail investors due to brokers or dealers operating under such different standards of conduct;</li> <li>adoption of a uniform fiduciary standard of conduct for brokers or dealers and investment advisors would adversely impact their commissions and the availability of proprietary products offered by brokers and dealers, as well as the ability of brokers and dealers to engage in principal transactions with customers; and</li> <li>adoption of a uniform fiduciary standard of conduct for brokers or dealers and investment advisors would adversely impact retail investor access to personalized, cost-effective investment advice and recommendations. </li> </ul> <p>Requires the SEC: (1) to publish in the Federal Register formal findings that such rule would reduce retail customer confusion or harm due to standards of conduct applicable to brokers, dealers, and investment advisors; and (2) in proposing rules to consider the differences in the registration, supervision, and examination requirements applicable to brokers, dealers, and investment advisors.</p>

action_date: 2015-10-27
action_desc: Passed House amended
text: <p>(This measure has not been amended since it was introduced. The expanded summary of the House reported version is repeated here.)</p> <p><b>Retail Investor Protection Act</b></p> <p> (Sec. 2) Prohibits the Secretary of Labor from prescribing any regulation under the Employee Retirement Income Security Act of 1974 (ERISA) defining the circumstances under which an individual is considered a fiduciary until 60 days after the Securities and Exchange Commission (SEC) issues a final rule governing standards of conduct for brokers and dealers under specified law.</p> <p>(Sec. 3) Amends the Securities Exchange Act of 1934 to prohibit the SEC from promulgating a rule establishing an investment advisor standard of conduct as the standard of conduct of brokers and dealers before it reports to certain congressional committees whether:</p> <ul> <li>retail investors and other customers are being harmed due to brokers or dealers operating under different standards of conduct than those applicable to investment advisors under the Investment Advisers Act of 1940;</li> <li>alternative remedies will reduce any confusion or harm to retail investors due to brokers or dealers operating under such different standards of conduct;</li> <li>adoption of a uniform fiduciary standard of conduct for brokers or dealers and investment advisors would adversely impact their commissions and the availability of proprietary products offered by brokers and dealers, as well as the ability of brokers and dealers to engage in principal transactions with customers; and</li> <li>adoption of a uniform fiduciary standard of conduct for brokers or dealers and investment advisors would adversely impact retail investor access to personalized, cost-effective investment advice and recommendations. </li> </ul> <p>Requires the SEC: (1) to publish in the Federal Register formal findings that such rule would reduce retail customer confusion or harm due to standards of conduct applicable to brokers, dealers, and investment advisors; and (2) in proposing rules to consider the differences in the registration, supervision, and examination requirements applicable to brokers, dealers, and investment advisors.</p>

tv_txt: I 114th CONGRESS 1st Session H. R. 1090 IN THE HOUSE OF REPRESENTATIVES February 25, 2015 Mrs. Wagner (for herself and Mr. Garrett ) introduced the following bill; which was referred to the Committee on Financial Services , and in addition to the Committee on Education and the Workforce , for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Securities Exchange Act of 1934 to provide protections for retail customers, and for other purposes.

1. Short title This Act may be cited as the Retail Investor Protection Act . 2. Stay on rules defining certain fiduciaries After the date of enactment of this Act, the Secretary of Labor shall not prescribe any regulation under the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1001 et seq. ) defining the circumstances under which an individual is considered a fiduciary until the date that is 60 days after the Securities and Exchange Commission issues a final rule relating to standards of conduct for brokers and dealers pursuant to the second subsection (k) of section 15 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78o(k) ). 3. Amendments to the Securities Exchange Act of 1934 The second subsection (k) of section 15 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78o(k) ), as added by section 913(g)(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5301 et seq. ), is amended by adding at the end the following: (3) Requirements prior to rulemaking The Commission shall not promulgate a rule pursuant to paragraph (1) before— (A) providing a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate describing whether— (i) retail investors (and such other customers as the Commission may provide) are being harmed due to brokers or dealers operating under different standards of conduct than those that apply to investment advisors under section 211 of the Investment Advisers Act of 1940 ( 15 U.S.C. 80b–11 ); (ii) alternative remedies will reduce any confusion or harm to retail investors due to brokers or dealers operating under different standards of conduct than those standards that apply to investment advisors under section 211 of the Investment Advisers Act of 1940 ( 15 U.S.C. 80b–11 ), including— (I) simplifying the titles used by brokers, dealers, and investment advisers; and (II) enhancing disclosure surrounding the different standards of conduct currently applicable to brokers, dealers, and investment advisers; (iii) the adoption of a uniform fiduciary standard of conduct for brokers, dealers, and investment advisors would adversely impact the commissions of brokers and dealers, the availability of proprietary products offered by brokers and dealers, and the ability of brokers and dealers to engage in principal transactions with customers; and (iv) the adoption of a uniform fiduciary standard of conduct for brokers or dealers and investment advisors would adversely impact retail investor access to personalized and cost-effective investment advice, recommendations about securities, or the availability of such advice and recommendations. (4) Economic analysis The Commission’s conclusions contained in the report described in paragraph (3) shall be supported by economic analysis. (5) Requirements for promulgating a rule The Commission shall publish in the Federal Register alongside the rule promulgated pursuant to paragraph (1) formal findings that such rule would reduce confusion or harm to retail customers (and such other customers as the Commission may by rule provide) due to different standards of conduct applicable to brokers, dealers, and investment advisors. (6) Requirements under Investment Advisers Act of 1940 In proposing rules under paragraph (1) for brokers or dealers, the Commission shall consider the differences in the registration, supervision, and examination requirements applicable to brokers, dealers, and investment advisors. .

tv_txt: I 114th CONGRESS 1st Session H. R. 1090 IN THE HOUSE OF REPRESENTATIVES AN ACT To amend the Securities Exchange Act of 1934 to provide protections for retail customers, and for other purposes.

1. Short title This Act may be cited as the Retail Investor Protection Act . 2. Stay on rules defining certain fiduciaries After the date of enactment of this Act, the Secretary of Labor shall not prescribe any regulation under the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1001 et seq. ) defining the circumstances under which an individual is considered a fiduciary until the date that is 60 days after the Securities and Exchange Commission issues a final rule relating to standards of conduct for brokers and dealers pursuant to the second subsection (k) of section 15 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78o(k) ). 3. Amendments to the Securities Exchange Act of 1934 The second subsection (k) of section 15 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78o(k) ), as added by section 913(g)(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5301 et seq. ), is amended by adding at the end the following: (3) Requirements prior to rulemaking The Commission shall not promulgate a rule pursuant to paragraph (1) before— (A) providing a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate describing whether— (i) retail investors (and such other customers as the Commission may provide) are being harmed due to brokers or dealers operating under different standards of conduct than those that apply to investment advisors under section 211 of the Investment Advisers Act of 1940 ( 15 U.S.C. 80b–11 ); (ii) alternative remedies will reduce any confusion or harm to retail investors due to brokers or dealers operating under different standards of conduct than those standards that apply to investment advisors under section 211 of the Investment Advisers Act of 1940 ( 15 U.S.C. 80b–11 ), including— (I) simplifying the titles used by brokers, dealers, and investment advisers; and (II) enhancing disclosure surrounding the different standards of conduct currently applicable to brokers, dealers, and investment advisers; (iii) the adoption of a uniform fiduciary standard of conduct for brokers, dealers, and investment advisors would adversely impact the commissions of brokers and dealers, the availability of proprietary products offered by brokers and dealers, and the ability of brokers and dealers to engage in principal transactions with customers; and (iv) the adoption of a uniform fiduciary standard of conduct for brokers or dealers and investment advisors would adversely impact retail investor access to personalized and cost-effective investment advice, recommendations about securities, or the availability of such advice and recommendations. (4) Economic analysis The Commission’s conclusions contained in the report described in paragraph (3) shall be supported by economic analysis. (5) Requirements for promulgating a rule The Commission shall publish in the Federal Register alongside the rule promulgated pursuant to paragraph (1) formal findings that such rule would reduce confusion or harm to retail customers (and such other customers as the Commission may by rule provide) due to different standards of conduct applicable to brokers, dealers, and investment advisors. (6) Requirements under Investment Advisers Act of 1940 In proposing rules under paragraph (1) for brokers or dealers, the Commission shall consider the differences in the registration, supervision, and examination requirements applicable to brokers, dealers, and investment advisors. .

Passed the House of Representatives October 27, 2015. Karen L. Haas, Clerk.

tv_txt: IIB 114th CONGRESS 1st Session H. R. 1090 IN THE SENATE OF THE UNITED STATES October 28, 2015 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs AN ACT To amend the Securities Exchange Act of 1934 to provide protections for retail customers, and for other purposes.

1. Short title This Act may be cited as the Retail Investor Protection Act . 2. Stay on rules defining certain fiduciaries After the date of enactment of this Act, the Secretary of Labor shall not prescribe any regulation under the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1001 et seq. ) defining the circumstances under which an individual is considered a fiduciary until the date that is 60 days after the Securities and Exchange Commission issues a final rule relating to standards of conduct for brokers and dealers pursuant to the second subsection (k) of section 15 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78o(k) ). 3. Amendments to the Securities Exchange Act of 1934 The second subsection (k) of section 15 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78o(k) ), as added by section 913(g)(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5301 et seq. ), is amended by adding at the end the following: (3) Requirements prior to rulemaking The Commission shall not promulgate a rule pursuant to paragraph (1) before— (A) providing a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate describing whether— (i) retail investors (and such other customers as the Commission may provide) are being harmed due to brokers or dealers operating under different standards of conduct than those that apply to investment advisors under section 211 of the Investment Advisers Act of 1940 ( 15 U.S.C. 80b–11 ); (ii) alternative remedies will reduce any confusion or harm to retail investors due to brokers or dealers operating under different standards of conduct than those standards that apply to investment advisors under section 211 of the Investment Advisers Act of 1940 ( 15 U.S.C. 80b–11 ), including— (I) simplifying the titles used by brokers, dealers, and investment advisers; and (II) enhancing disclosure surrounding the different standards of conduct currently applicable to brokers, dealers, and investment advisers; (iii) the adoption of a uniform fiduciary standard of conduct for brokers, dealers, and investment advisors would adversely impact the commissions of brokers and dealers, the availability of proprietary products offered by brokers and dealers, and the ability of brokers and dealers to engage in principal transactions with customers; and (iv) the adoption of a uniform fiduciary standard of conduct for brokers or dealers and investment advisors would adversely impact retail investor access to personalized and cost-effective investment advice, recommendations about securities, or the availability of such advice and recommendations. (4) Economic analysis The Commission’s conclusions contained in the report described in paragraph (3) shall be supported by economic analysis. (5) Requirements for promulgating a rule The Commission shall publish in the Federal Register alongside the rule promulgated pursuant to paragraph (1) formal findings that such rule would reduce confusion or harm to retail customers (and such other customers as the Commission may by rule provide) due to different standards of conduct applicable to brokers, dealers, and investment advisors. (6) Requirements under Investment Advisers Act of 1940 In proposing rules under paragraph (1) for brokers or dealers, the Commission shall consider the differences in the registration, supervision, and examination requirements applicable to brokers, dealers, and investment advisors. .

Passed the House of Representatives October 27, 2015. Karen L. Haas, Clerk

tv_txt: IB Union Calendar No. 230 114th CONGRESS 1st Session H. R. 1090 [Report No. 114–304, Part I] IN THE HOUSE OF REPRESENTATIVES February 25, 2015 Mrs. Wagner (for herself and Mr. Garrett ) introduced the following bill; which was referred to the Committee on Financial Services , and in addition to the Committee on Education and the Workforce , for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned October 22, 2015 Additional sponsors: Mr. Royce , Mr. Huizenga of Michigan , Mr. Hultgren , Mr. Poliquin , Mr. Lucas , Mr. Stivers , Mr. Hill , Mr. Luetkemeyer , Mr. Mulvaney , Mr. Messer , Mr. Guinta , Mr. Ross , Mr. King of New York , Mr. Dold , Mr. Barr , Mr. Fincher , Mr. Williams , Mr. Posey , Mr. Tipton , Mr. Emmer of Minnesota , Mr. Smith of Texas , Mr. Brooks of Alabama , Mr. Heck of Nevada , Mr. Abraham , Mrs. Black , Mrs. Mimi Walters of California , Mr. Hudson , Mr. Flores , Mr. Jolly , Mr. Frelinghuysen , Mrs. Hartzler , Mr. Pittenger , and Mr. Duffy October 22, 2015 Reported from the Committee on Financial Services October 22, 2015 The Committee on Education and the Workforce discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printed A BILL To amend the Securities Exchange Act of 1934 to provide protections for retail customers, and for other purposes.

1. Short title This Act may be cited as the Retail Investor Protection Act . 2. Stay on rules defining certain fiduciaries After the date of enactment of this Act, the Secretary of Labor shall not prescribe any regulation under the Employee Retirement Income Security Act of 1974 ( 29 U.S.C. 1001 et seq. ) defining the circumstances under which an individual is considered a fiduciary until the date that is 60 days after the Securities and Exchange Commission issues a final rule relating to standards of conduct for brokers and dealers pursuant to the second subsection (k) of section 15 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78o(k) ). 3. Amendments to the Securities Exchange Act of 1934 The second subsection (k) of section 15 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78o(k) ), as added by section 913(g)(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5301 et seq. ), is amended by adding at the end the following: (3) Requirements prior to rulemaking The Commission shall not promulgate a rule pursuant to paragraph (1) before— (A) providing a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate describing whether— (i) retail investors (and such other customers as the Commission may provide) are being harmed due to brokers or dealers operating under different standards of conduct than those that apply to investment advisors under section 211 of the Investment Advisers Act of 1940 ( 15 U.S.C. 80b–11 ); (ii) alternative remedies will reduce any confusion or harm to retail investors due to brokers or dealers operating under different standards of conduct than those standards that apply to investment advisors under section 211 of the Investment Advisers Act of 1940 ( 15 U.S.C. 80b–11 ), including— (I) simplifying the titles used by brokers, dealers, and investment advisers; and (II) enhancing disclosure surrounding the different standards of conduct currently applicable to brokers, dealers, and investment advisers; (iii) the adoption of a uniform fiduciary standard of conduct for brokers, dealers, and investment advisors would adversely impact the commissions of brokers and dealers, the availability of proprietary products offered by brokers and dealers, and the ability of brokers and dealers to engage in principal transactions with customers; and (iv) the adoption of a uniform fiduciary standard of conduct for brokers or dealers and investment advisors would adversely impact retail investor access to personalized and cost-effective investment advice, recommendations about securities, or the availability of such advice and recommendations. (4) Economic analysis The Commission’s conclusions contained in the report described in paragraph (3) shall be supported by economic analysis. (5) Requirements for promulgating a rule The Commission shall publish in the Federal Register alongside the rule promulgated pursuant to paragraph (1) formal findings that such rule would reduce confusion or harm to retail customers (and such other customers as the Commission may by rule provide) due to different standards of conduct applicable to brokers, dealers, and investment advisors. (6) Requirements under Investment Advisers Act of 1940 In proposing rules under paragraph (1) for brokers or dealers, the Commission shall consider the differences in the registration, supervision, and examination requirements applicable to brokers, dealers, and investment advisors. .

October 22, 2015 Reported from the Committee on Financial Services October 22, 2015 The Committee on Education and the Workforce discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printed