Dodd-Frank Wall Street Reform and Consumer Protection Act · DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT (Pub. L. No. 111-203, 124 Stat. 1376) The following Table cross-references

Dodd-Frank Wall Street Reformand Consumer Protection Act

Selected Sections

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CONTENTS

Page

Table of Amendments and New Law Provisions . . . . . . . . . . . . . . . . . . . . . . . v

DODD-FRANK WALL STREET REFORM AND

CONSUMER PROTECTION ACT

SELECTED SECTIONS

TITLE IV—REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS

§ 402. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

§ 409. Family Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

§ 412. Comptroller General Study on Custody Rule Costs . . . . . . . . . . . . . . . 2

§ 413. Adjusting the Accredited Investor Standard . . . . . . . . . . . . . . . . . . . . 2

§ 415. GAO Study and Report on Accredited Investors . . . . . . . . . . . . . . . . . 3

§ 416. GAO Study on Self-Regulatory Organization For Private Funds . . . . . . 3

§ 417. Commission Study and Report on Short Selling . . . . . . . . . . . . . . . . . 3

TITLE VII—WALL STREET TRANSPARENCY AND ACCOUNTABILITY

§ 711. Definitions [15 U.S.C. § 8301] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

§ 712. Review of Regulatory Authority [15 U.S.C. § 8302] . . . . . . . . . . . . . . 4

§ 714. Abusive Swaps [15 U.S.C. § 8303] . . . . . . . . . . . . . . . . . . . . . . . . . 9

§ 715. Authority to Prohibit Participation in Swap Activities

[15 U.S.C. § 8304] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

§ 716. Prohibition Against Federal Government Bailouts of Swaps Entities

[15 U.S.C. § 8305] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

§ 718. Determining Status of Novel Derivative Products

[15 U.S.C. § 8306] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

§ 719. Studies [15 U.S.C. § 8307] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

§ 720. Memorandum [15 U.S.C. § 8308] . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

§ 721. Definitions [15 U.S.C. § 8321] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

§ 722. Jurisdiction [15 U.S.C. § 8322] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

§ 726. Rulemaking on Conflict of Interest [15 U.S.C. § 8323] . . . . . . . . . . . . 18

§ 750. Study on Oversight of Carbon Markets . . . . . . . . . . . . . . . . . . . . . . . 18

§ 752. International Harmonization [15 U.S.C. § 8325] . . . . . . . . . . . . . . . . . 19

§ 761. Definitions Under the Securities Exchange Act of 1934

[15 U.S.C. § 8341] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

§ 764. Registration and Regulation of Security-Based Swap Dealers and

Major Security-Based Swap Participants [15 U.S.C. § 8342] . . . . . . . . 20

§ 765. Rulemaking on Conflict of Interest [15 U.S.C. § 8343] . . . . . . . . . . . . 20

§ 771. Other Authority [15 U.S.C. § 8344]. . . . . . . . . . . . . . . . . . . . . . . . . . 21

TITLE IX—INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE

REGULATION OF SECURITIES

§ 913. Study and Rulemaking Regarding Obligations of Brokers, Dealers,

and Investment Advisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

§ 914. Study on Enhancing Investment Adviser Examinations . . . . . . . . . . . . 24

i

Page

§ 917. Study Regarding Financial Literacy Among Investors . . . . . . . . . . . . . 24

§ 918. Study Regarding Mutual Fund Advertising . . . . . . . . . . . . . . . . . . . . 25

§ 919A. Study on Conflicts of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

§ 919B. Study on Improved Investor Access to Information on Investment

Advisers and Broker-Dealers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

§ 919C. Study on Financial Planners and the Use of Financial Designations . . . 27

§ 922. Whistleblower Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

§ 924. Implementation and Transition Provisions For Whistleblower

Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

§ 926. Disqualifying Felons and Other ‘‘Bad Actors’’ From Regulation D

Offerings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

§ 929Y. Study on Extraterritorial Private Rights of Action. . . . . . . . . . . . . . . . 30

§ 929Z. GAO Study on Securities Litigation . . . . . . . . . . . . . . . . . . . . . . . . . 31

§ 931. Findings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

§ 936. Qualification Standards For Credit Rating Analysts. . . . . . . . . . . . . . . 32

§ 937. Timing of Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

§ 938. Universal Ratings Symbols . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

§ 939. Removal of Statutory References to Credit Ratings . . . . . . . . . . . . . . 32

§ 939A. Review of Reliance on Ratings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

§ 939B. Elimination of Exemption From Fair Disclosure Rule . . . . . . . . . . . . . 33

§ 939C. Securities and Exchange Commission Study on Strengthening Credit

Rating Agency Independence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

§ 939D. Government Accountability Office Study on Alternative Business

Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

§ 939E. Government Accountability Office Study on the Creation of an

Independent Professional Analyst Organization. . . . . . . . . . . . . . . . . . 34

§ 939F. Study and Rulemaking on Assigned Credit Ratings. . . . . . . . . . . . . . . 34

§ 939H. Sense of Congress. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

§ 943. Representations and Warranties in Asset-Backed Offerings . . . . . . . . . 36

§ 952. Compensation Committee Independence . . . . . . . . . . . . . . . . . . . . . . 36

§ 953. Executive Compensation Disclosures . . . . . . . . . . . . . . . . . . . . . . . . 36

§ 961. Report and Certification of Internal Supervisory Controls . . . . . . . . . . 37

§ 962. Triennial Report on Personnel Management . . . . . . . . . . . . . . . . . . . . 38

§ 963. Annual Financial Controls Audit. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

§ 964. Report on Oversight of National Securities Associations . . . . . . . . . . . 40

§ 967. Commission Organizational Study and Reform . . . . . . . . . . . . . . . . . 41

§ 968. Study on SEC Revolving Door . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

§ 971. Proxy Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

§ 976. Government Accountability Office Study of Increased Disclosure to

Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

§ 977. Government Accountability Office Study on the Municipal Securities

Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

§ 978. Funding For Governmental Accounting Standards Board . . . . . . . . . . . 44

§ 979. Commission Office of Municipal Securities . . . . . . . . . . . . . . . . . . . . 45

ii

Page

§ 984. Loan or Borrowing of Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

§ 989F. GAO Study of Person to Person Lending . . . . . . . . . . . . . . . . . . . . . 45

§ 989G. Exemption For Nonaccelerated Filers . . . . . . . . . . . . . . . . . . . . . . . . 46

§ 989H. Corrective Responses By Heads of Certain Establishments to

Deficiencies Identified By Inspectors General . . . . . . . . . . . . . . . . . . 46

§ 989I. GAO Study Regarding Exemption For Smaller Issuers . . . . . . . . . . . . 47

§ 989J. Further Promoting the Adoption of the NAIC Model Regulations that

Enhance Protection of Seniors and Other Consumers . . . . . . . . . . . . . 47

TITLE XV—MISCELLANEOUS PROVISIONS

§ 1502. Conflict Minerals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

§ 1503. Reporting Requirements Regarding Coal or Other Mine Safety . . . . . . 51

iii

DODD-FRANK WALL STREET REFORM ANDCONSUMER PROTECTION ACT

(Pub. L. No. 111-203, 124 Stat. 1376)

The following Table cross-references the sections of the Dodd-Frank Wall StreetReform and Consumer Protection Act to the existing securities laws that it amendedand to the new laws that it created that are contained in the Red Box®. Existingsecurities laws amended by Dodd-Frank contained in the Red Box® are referenced bytheir internal Act sections; other laws amended are omitted. New securities provisionshave been codified as Chapter 109,Wall Street Transparency and Accountability, Title15 of the United States Code (§§ 8301-8344). Those sections of Dodd-Frank that do notaffect securities laws are intentionally omitted.

SECTION SUBSECTION AMENDMENTS TOEXISTING LAWS

NEW LAW

Sec. 1. Short title; table ofcontents

Dodd-Frank Wall Street Reform and ConsumerProtection Act

TITLE I—FINANCIAL STABILITY

Sec. 101. Short title Financial Stability Act of 2010

Subtitle C—Additional Board of Governors Authority for Certain NonbankFinancial Companies and Bank Holding Companies

Sec. 173. Access to UnitedStates financial market byforeign institutions

(a), (b) 12 USC § 3105

(c) 34 Act § 15

TITLE III—TRANSFER OF POWERS TO THE COMPTROLLER OF THECURRENCY, THE CORPORATION, AND THE BOARD OF GOVERNORS

Sec. 300. Short title Enhancing Financial Institution Safety andSoundness Act of 2010

Subtitle E—Technical and Conforming Amendments

Sec. 376. Securities ExchangeAct of 1934

34 Act §§ 3(a)(34),12(i), 15C(g)(1),

23(b)(1)

TITLE IV—REGULATION OF ADVISERS TO HEDGE FUNDS AND OTHERS

Sec. 401. Short title Private Fund Investment Advisers Registration Act of 2010

Sec. 402. Definitions (a) IAA § 202(a)

(b) [Adds ‘‘OtherDefinitions’’]

Sec. 403. Elimination of privateadviser exemption; limitedexemption for foreignprivate advisers; limitedintrastate exemption

IAA § 203(b)

Sec. 404. Collection ofsystemic risk data;reports; examinations;disclosures

IAA § 204

Sec. 405. Disclosure provisionamendment

IAA § 210(c)

v


NEW LAW

Sec. 406. Clarification ofrulemaking authority

IAA § 211

Sec. 407. Exemption of andreporting by venturecapital fund advisers

IAA § 203

Sec. 408. Exemption of andreporting by certainprivate fund advisers

IAA § 203

Sec. 409. Family offices (a) IAA § 202(a)(11)

(b) [Directive tothe SEC]

(c) [AntifraudAuthority]

Sec. 410. State and Federalresponsibilities; assetthreshold for Federalregistration of investmentadvisers

IAA § 203A(a)

Sec. 411. Custody of clientassets

IAA § 223

Sec. 412. Comptroller generalstudy on custody rulecosts

[Directive tothe Comptroller

General ofthe US]

Sec. 413. Adjusting theaccredited investorstandard

[Directive tothe SEC]

Sec. 414. Rule of constructionrelating to theCommoditiesExchange Act

IAA § 224

Sec. 415. GAO study andreport on accreditedinvestors


General ofthe US]

Sec. 416. GAO study onself-regulatoryorganization for privatefunds


General ofthe US]

Sec. 417. Commission study andreport on short selling


Sec. 418. Qualified clientstandard

IAA § 205(e)

TITLE VI—IMPROVEMENTS TO REGULATION OF BANK AND SAVINGSASSOCIATION HOLDING COMPANIES AND DEPOSITORY INSTITUTIONS

Sec. 601. Short title Bank and Savings Association Holding Company andDepository Institution Regulatory Improvements Act of 2010

Sec. 617. Elimination ofelective investment bankholding companyframework

(a) 34 Act § 17

(b) Effective Date; See34 Act § 17

vi


NEW LAW

Sec. 621. Conflicts of interest (a) 33 Act § 27B

(b) Effective Date; See33 Act § 27B


Sec. 701. Short title. Wall Street Transparency and Accountability Act of 2010

Subtitle A—Regulation of Over-the-Counter Swaps Markets

PART I—REGULATORY AUTHORITY

Sec. 711. Definitions 15 USC § 8301

Sec. 712. Review of regulatoryauthority

15 USC § 8302

Sec. 713. Portfolio marginingconforming changes

(a) 34 Act § 15(c)(3)

(b) 7 USC § 6(d)

(c) 7 USC § 24

Sec. 714. Abusive swaps 15 USC § 8303

Sec. 715. Authority to prohibitparticipation in swapactivities

15 USC § 8304

Sec. 716. Prohibition againstFederal Governmentbailouts of swaps entities

15 USC § 8305

Sec. 717. New productapproval CFTC—SECprocess

(a) 7 USC § 2(a)(1)(C)

(b) 34 Act § 3B

(c) 34 Act § 19(b)

(d) 7 USC § 7A-2(c)(1)

Sec. 718. Determining status ofnovel derivative products

15 USC § 8306

Sec. 719. Studies 15 USC § 8307

Sec. 720. Memorandum 15 USC § 8308

PART II—REGULATION OF SWAP MARKETS

Sec. 721. Definitions (a) 7 USC § 1a

(b), (c) 15 USC § 8321

(d) 7 USC § 6(c)(1)

(e)(1)–(e)(7),(e)(9), (e)(10)

7 USC §§ 2(c)(2)(B),6m(3), 6o-1(a)(1),7(e)(1), 7a(b)(2),

7a-1(a), 7a-2(c)(2)(B),27 et seq., 13-1

(e)(8) 34 Act § 6(g)(5)(B)(i)

(f) 7 USC § 1a

vii


NEW LAW

Sec. 722. Jurisdiction (a)–(f), (h) 7 USC §§ 1b, 2(a)(1),16, 2(c)(2)(A), 2, 6(c)

(g) [Authority ofFERC] (15 USC

§ 8322)

Sec. 726. Rulemaking onconflict of interest

[CFTCRulemaking]

(15 USC§ 8323)

Sec. 734. Derivativestransaction executionfacilities and exemptboards of trade

(a), (b)(1), (c) 7 USC §§ 7a, 7a-3, 2

(b)(2) 34 Act § 6(g)(1)(a)

Sec. 741. Enforcement (a), (b) 7 USC §§ 6b, 6b-1,6c(a)(1), 9, 13b,

13a-1(a), 13, 13(a),2(c)(2)(B) & (C),

1a(19)(A)(iv)(II), 9a

(c) [CFTC SavingsClause]

15 USC § 8324

Sec. 750. Study on oversight ofcarbon markets

[InteragencyWorking GroupEstablished]

Sec. 752. Internationalharmonization

15 USC § 8325

Subtitle B—Regulation of Security-Based Swap Markets

Sec. 761. Definitions under theSecurities Exchange Actof 1934

(a) 34 Act § 3(a)

(b) 15 USC § 8341

Sec. 762. Repeal of prohibitionon regulation of security-based swap agreements

(a), (b) 15 USC § 78c

(c) 33 Act §§ 2A, 17

(d) 34 Act §§ 3A, 9, 10,15, 16, 20, 21A

Sec. 763. Amendments to theSecurities Exchange Actof 1934

(a) 34 Act § 3C

(b) 34 Act § 17A

(c) 34 Act § 3D

(d) 34 Act § 3E

(e) 34 Act § 6

(f) 34 Act § 9(b)

(g) 34 Act § 9

(h) 34 Act § 10B

(i) 34 Act § 13

viii


NEW LAW

Sec. 764. Registration andregulation of security-based swap dealers andmajor security-based swapparticipants

(a) 34 Act § 15F

(b) 15 USC § 8342

Sec. 765. Rulemaking onconflict of interest

15 USC § 8343

Sec. 766. Reporting andrecordkeeping

(a) 34 Act § 13A

(b), (e) 34 Act § 13

(c) 34 Act § 13(f)(1)

(d) 34 Act § 15(b)(4)

Sec. 767. State gaming andbucket shop laws

34 Act § 28(a)

Sec. 768. Amendments to theSecurities Act of 1933;treatment of security-basedswaps

(a) 33 Act § 2(a)

(b) 33 Act § 5

Sec. 769. Definitions under theInvestment Company Actof 1940

ICA § 2(a)

Sec. 770. Definitions under theInvestment Advisers Actof 1940

IAA § 202(a)

Sec. 771. Other authority 15 USC § 8344

Sec. 772. Jurisdiction (a) 34 Act § 36

(b) 34 Act § 30

Sec. 773. Civil penalties 34 Act § 21B

TITLE IX—INVESTOR PROTECTIONS AND IMPROVEMENTS TOTHE REGULATION OF SECURITIES

Sec. 901. Short title Investor Protection and Securities Reform Act of 2010

Subtitle A—Increasing Investor Protection

Sec. 911. Investor AdvisoryCommittee established

34 Act § 39

Sec. 912. Clarification ofauthority of theCommission to engagein investor testing

33 Act § 19

Sec. 913. Study and rulemakingregarding obligations ofbrokers, dealers, andinvestment advisers

(a)–(f) [AddsDefinitions;

Requires Study;Report; PublicComment;Rulemaking]

(g) 34 Act § 15IAA § 211

(h) 34 Act § 15IAA § 211

ix


NEW LAW

Sec. 914. Study on enhancinginvestment adviserexaminations

[Directive toSEC]

Sec. 915. Office of the InvestorAdvocate

34 Act § 4

Sec. 916. Streamlining of filingprocedures for self-regulatory organizations

(a)–(d) 34 Act § 19(b)

Sec. 917. Study regardingfinancial literacy amonginvestors

[Directive toSEC]

Sec. 918. Study regardingmutual fund advertising

[Directive toComptrollerGeneral of the

US]

Sec. 919. Clarification ofCommission authority torequire investor disclosuresbefore purchase ofinvestment products andservices

34 Act § 15

Sec. 919A. Study on conflictsof interest


US]

Sec. 919B. Study on improvedinvestor access toinformation on investmentadvisers and broker-dealers

[Directive toSEC]

Sec. 919C. Study on financialplanners and the use offinancial designations


US]

Sec. 919D. Ombudsman 34 Act § 4(g)

Subtitle B—Increasing Regulatory Enforcement and Remedies

Sec. 921. Authority to restrictmandatory pre-disputearbitration

(a) 34 Act § 15

(b) IAA § 205

Sec. 922. Whistleblowerprotection

(a) 34 Act § 21F

(b), (c) 18 USC § 1514A(a), (b)

(d) [Directive toInspector

General of theSEC]

Sec. 923. Conformingamendments forwhistleblower protection

(a) 33 Act § 20(d)(3)(A)ICA § 42(e)(3)(A)IAA § 209(e)(3)(A)

(b) 34 Act §§ 21(d)(3)(C)(i),21A

Sec. 924. Implementation andtransition provisions forwhistleblower protection

[Implementation& Transition]

x


NEW LAW

Sec. 925. Collateral bars (a) 34 Act §§ 15(b)(6)(A),15B(c)(4), 17A(c)(4)(C)

(b) IAA § 203(f)

Sec. 926. Disqualifying felonsand other ‘‘bad actors’’from Regulation D offerings


Sec. 927. Equal treatment ofself-regulatoryorganization rules

34 Act § 29(a)

Sec. 928. Clarification thatsection 205 of theInvestment Advisers Actof 1940 does not apply toState-registered advisers

IAA § 205(a)

Sec. 929. Unlawful marginlending

34 Act § 7(c)(1)(a)

Sec. 929B. Fair Fundamendments

SOX § 308

Sec. 929D. Lost and stolensecurities

34 Act § 17(f)(1)

Sec. 929E. Nationwide serviceof subpoenas

(a) 33 Act § 22(a)

(b) 34 Act § 27

(c) ICA § 44

(d) IAA § 214

Sec. 929F. Formerly associatedpersons

(a) 34 Act § 15B(c)(8)

(b) 34 Act § 15C(c)

(c), (d) 34 Act § 21(a)(1)

(e) 34 Act § 19(h)(4)

(f) ICA § 36(a)

(g) SOX § 2(a)(9)34 Act § 21(a)(1)

(h) SOX § 105(c)(6)

(i) SOX § 107(d)(3)

Sec. 929I. Protectingconfidentiality ofmaterials submitted tothe Commission

(a) 34 Act § 24

(b) ICA § 31

(c) IAA § 210

Sec. 929J. Expansion of auditinformation to beproduced and exchanged

SOX § 106

Sec. 929K. Sharing privilegedinformation with otherauthorities

34 Act § 24

Sec. 929L. Enhancedapplication of antifraudprovisions

34 Act §§ 9, 10(a)(1),15(c)(1)(A)

xi


NEW LAW

Sec. 929M. Aiding and abettingauthority under theSecurities Act and theInvestment Company Act

(a) 33 Act § 15

(b) ICA § 48

Sec. 929N. Authority to imposepenalties for aiding andabetting violations of theInvestment Advisers Act

IAA § 209

Sec. 929O. Aiding and abettingstandard of knowledgesatisfied by recklessness

34 Act § 20(e)

Sec. 929P. Strengtheningenforcement by theCommission

(a) 33 Act § 8A34 Act § 21B(a)ICA § 9(d)(1)IAA § 203(i)(1)

(b) 33 Act § 2234 Act § 27IAA § 214

(c) 34 Act § 20(a)

Sec. 929Q. Revision torecordkeeping rule

(a) ICA § 31

(b) IAA § 204

Sec. 929R. Beneficialownership and short-swingprofit reporting

(a) 34 Act § 13

(b) 34 Act § 16(a)

Sec. 929S. Fingerprinting 34 Act § 17(f)(2)

Sec. 929T. Equal treatment ofself-regulatoryorganization rules

34 Act § 29(a)

Sec. 929U. Deadline forcompleting examinations,inspections andenforcement actions

34 Act § 4E

Sec. 929W. Notice to missingsecurity holders

34 Act § 17A

Sec. 929X. Short sale reforms (a) 34 Act § 13(f)

(b) 34 Act § 9

(c) 34 Act § 15

Sec. 929Y. Study onextraterritorial privaterights of action


Sec. 929Z. GAO study onsecurities litigation

[Directive tothe ComptrollerGeneral of the

US]

Subtitle C—Improvements to the Regulation of Credit Rating Agencies

Sec. 931. Findings [CongressionalFindings]

xii


NEW LAW

Sec. 932. Enhanced regulation,accountability, andtransparency of nationallyrecognized statisticalrating organizations

(a) 34 Act § 15E

(b) 34 Act § 3(a)(62)

Sec. 933. State of mind inprivate actions

(a) 34 Act § 15E(m)

(b) 34 Act § 21D(b)(2)

Sec. 934. Referring tips to lawenforcement or regulatoryauthorities

34 Act § 15E

Sec. 935. Consideration ofinformation from sourcesother than the issuer inrating decisions

34 Act § 15E

Sec. 936. Qualificationstandards for creditrating analysts


Sec. 937. Timing of regulations [Directive tothe SEC]

Sec. 938. Universal ratingssymbols


Sec. 939. Removal of statutoryreferences to credit ratings

(a) 12 USC §§ 1811 et seq.

(b) 12 USC § 4519

(c) ICA § 6(a)(5)(A)(iv)(I)

(d) 12 USC § 24a

(e) 34 Act § 3(a)

(f) 22 USC § 286hh(a)(6)

(g) Effective Date; See34 Act § 3(a) and

ICA § 6(a)(5)(A)(iv)(I)

(h) [Directive tothe SEC]

Sec. 939A. Review of relianceon ratings

[Directive tothe Federalagencies]

Sec. 939B. Elimination ofexemption from fairdisclosure rule


Sec. 939C. Securities andExchange Commissionstudy on strengtheningcredit rating agencyindependence


Sec. 939D. GovernmentAccountability Officestudy on alternativebusiness models

[Directive to theComptrollerGeneral of theUnited States]

xiii


NEW LAW

Sec. 939E. GovernmentAccountability Officestudy on the creation of anindependent professionalanalyst organization

[Directive tothe ComptrollerGeneral of theUnited States]

Sec. 939F. Study andrulemaking on assignedcredit ratings

[AddingDefinitions;Directive tothe SEC]

Sec. 939G. Effect of Rule 436(g) 17 C.F.R. § 240.436(g)

Sec. 939H. Sense of Congress [Directive tothe SEC]

Subtitle D—Improvements to the Asset-Backed Securitization Process

Sec. 941. Regulation of creditrisk retention

(a) 34 Act § 3(a)

(b) 34 Act § 15G

Sec. 942. Disclosures andreporting for asset-backedsecurities

(a) 34 Act § 15(d)

(b) 33 Act § 7

Sec. 943. Representations andwarranties in asset-backedofferings


Sec. 944. Exemptedtransactions under theSecurities Act of 1933

(a) 33 Act § 4

(b) 34 Act§ 3(a)(4)(B)(vii)(I)

Sec. 945. Due diligenceanalysis and disclosurein asset-backed securitiesissues

33 Act § 7

Subtitle E—Accountability and Executive Compensation

Sec. 951. Shareholder vote onexecutive compensationdisclosures

34 Act § 14A

Sec. 952. Compensationcommittee independence

(a) 34 Act § 10C


Sec. 953. Executivecompensation disclosures

(a) 34 Act § 14


Sec. 954. Recovery oferroneously awardedcompensation

34 Act § 10D

Sec. 955. Disclosure regardingemployee and directorhedging

34 Act § 14

Sec. 957. Voting by brokers 34 Act § 6(b)

Subtitle F—Improvements to the Management of the Securities and Exchange Commission

Sec. 961. Report andcertification of internalsupervisory controls


xiv


NEW LAW

Sec. 962. Triennial report onpersonnel management

[Directive tothe ComptrollerGeneral of theUS; Directiveto the SEC]

Sec. 963. Annual financialcontrols audit


Sec. 964. Report on oversightof national securitiesassociations

[Directive tothe ComptrollerGeneral of theUS; Directiveto the SEC]

Sec. 965. Complianceexaminers

34 Act § 4

Sec. 966. Suggestion programfor employees of theCommission

34 Act § 4D

Sec. 967. Commissionorganizational study andreform


Sec. 968. Study on SECrevolving door


General ofthe US]

Subtitle G—Strengthening Corporate Governance

Sec. 971. Proxy access (a) 34 Act § 14(a)


(c) [Directive tothe SEC]

Sec. 972. Disclosures regardingchairman and CEOstructures

34 Act § 14B

Subtitle H—Municipal Securities

Sec. 975. Regulation ofmunicipal securities andchanges to the board ofthe MSRB

(a) 34 Act § 15B(a)

(b) 34 Act § 15B(b)

(c) 34 Act § 15B(c)

(d) 34 Act § 15B(d)(2)

(e) 34 Act § 15B

(f) 34 Act § 15A(b)

(g) 34 Act § 15

(h) 34 Act § 17(a)(1)

(i) Effective date; Seerespective sections

listed above

Sec. 976. GovernmentAccountability Officestudy of increaseddisclosure to investors


US]

xv


NEW LAW

Sec. 977. GovernmentAccountability Officestudy on the municipalsecurities markets


General ofthe US]

Sec. 978. Funding forGovernmental AccountingStandards Board

(a) 33 Act § 19

(b) [Directive tothe Comptroller

General ofthe US]

Sec. 979. Commission Officeof Municipal Securities


Subtitle I—Public Company Accounting Oversight Board,Portfolio Margining, and Other Matters

Sec. 981. Authority to sharecertain information withforeign authorities

(a) SOX § 2(a)

(b) SOX § 105(b)(5)

(c) SOX § 105(b)(5)(A)

Sec. 982. Oversight of brokersand dealers

(a) SOX §§ 110, 2(a)

(b) SOX § 101

(c) SOX § 102

(d) SOX § 103(a)

(e) SOX § 104(a)34 Act § 17(e)(1)(A)

(f) SOX § 105(c)(7)(B)

(g) SOX § 106(a)

(h) SOX § 109

(i) SOX § 105(b)(4)(B)

(j) SOX § 105(b)(5)(B)(ii)

Sec. 984. Loan or borrowing ofsecurities

(a) 34 Act § 10


Sec. 985. Technical correctionsto Federal securities laws

(a) 33 Act §§ 3(a)(4), 18,19(d)(6)(A),

27A(c)(1)(B)(ii)

(b) 34 Act §§ 2, 3,10A(i)(1)(B), 13(b)(1),

15, 15C(a)(2),17(b)(1)(B), 21C(c)(2)

(c) TIA §§ 304(b), 317(a)(1)

(d) ICA §§ 2(a)(19),9(b)(4)(B), 12(d)(1)(J),17(f), 61(a)(3)(B)(iii)

(e) IAA § 203, 206(3),213(a), 222

xvi


NEW LAW

Sec. 986. Conformingamendments relating torepeal of the Public UtilityHolding Company Act of1935

(a) 34 Act §§ 3(a)(47),12(k), 21(h)(2)

(b) TIA §§ 303, 308, 310,311, 323(b), 326

(c) ICA §§ 2(a)(44), 3(c),38(b), 50

(d) IAA § 202(a)(21)

Sec. 989F. GAO study ofperson to person lending


General ofthe US]

Sec. 989G. Exemption fornonaccelerated filers

(a) SOX § 404


Sec. 989H. Correctiveresponses by heads ofcertain establishments todeficiencies identified byInspectors General

[Directives toheads ofagencies,

including SEC]

Sec. 989I. GAO studyregarding exemptionfor smaller issuers


General ofthe US]

Sec. 989J. Further promotingthe adoption of theNAIC Model Regulationsthat enhance protectionof seniors and otherconsumers


Subtitle J—Securities and Exchange Commission Match Funding

Sec. 991. Securities andExchange Commissionmatch funding

(a) 34 Act § 31Effective date; See

34 Act § 31

(b) 33 Act § 6(b)34 Act §§ 13(e), 14(g)Effective date; Seerespective sections

listed above

(c) 34 Act § 35

(d) 34 Act § 31

(e) 34 Act § 4Effective date; See

34 Act § 4

xvii


NEW LAW


Sec. 1502. Conflict minerals (a) [Sense ofCongress]

(b) 34 Act § 13

(c), (d) [Strategy;Reports]

(e) [Definitions]

Sec. 1503. Reportingrequirements regardingcoal or other minesafety

[Reporting;SEC Authority;Definitions;

Effective date]

Sec. 1504. Disclosure ofpayments by resourceextraction issuers

34 Act § 13

xviii

DODD-FRANK WALL STREET REFORM ANDCONSUMER PROTECTION ACT

Editor’s Note

The Dodd-Frank Wall Street Reform and Consumer Protection Act was signed bythe President on July 21, 2010 (Pub. Law No. 111-203, 124 Stat. 1376). Section 1(a)provides: ‘‘This Act may be cited as the ‘Dodd-Frank Wall Street Reform and Con-sumer Protection Act.’’’ The Act created new law and amended existing securities andother laws. For a list of securities laws created and affected by Dodd-Frank, please seethe Cross-Reference Table in the front of this pamphlet.

Those sections of Dodd-Frank Wall Street Reform and Consumer Protection Actthat impact existing securities laws currently included in the Red Box® but not codifiedas new sections in the United States Code are included in this booklet as well as the newsecurities provisions codified in Title 15 of the United States Code. The new provisionsare followed in brackets with the corresponding United States Code section numbers.

TITLE IV—REGULATION OF ADVISERS TO HEDGEFUNDS AND OTHERS

§ 402. Definitions.

(a) [Omitted; paragraph (a) amended existing law.]

(b) Other Definitions.—As used in this title, the terms ‘‘investment adviser’’ and‘‘private fund’’ have the same meanings as in section 202 of the Investment AdvisersAct of 1940, as amended by this title.

§ 409. Family Offices.


(b) Rulemaking.—The rules, regulations, or orders issued by the Commissionpursuant to section 202(a)(11)(G) of the Investment Advisers Act of 1940, as added bythis section, regarding the definition of the term ‘‘family office’’ shall provide for anexemption that—

(1) Is consistent with the previous exemptive policy of the Commission, as reflectedin exemptive orders for family offices in effect on the date of enactment of this Act, andthe grandfathering provisions in paragraph (3);

(2) Recognizes the range of organizational, management, and employment struc-tures and arrangements employed by family offices; and

(3) Does not exclude any person who was not registered or required to be registeredunder the Investment Advisers Act of 1940 on January 1, 2010 from the definition ofthe term ‘‘family office’’, solely because such person provides investment advice to,and was engaged before January 1, 2010 in providing investment advice to—

(A) Natural persons who, at the time of their applicable investment, are officers,directors, or employees of the family office who—

(i) Have invested with the family office before January 1, 2010; and

1

(ii) Are accredited investors, as defined in Regulation D of the Commission (or anysuccessor thereto) under the Securities Act of 1933, or, as the Commission may pre-scribe by rule, the successors-in-interest thereto;

(B) Any company owned exclusively and controlled by members of the family ofthe family office, or as the Commission may prescribe by rule;

(C) Any investment adviser registered under the Investment Adviser Act of 1940that provides investment advice to the family office and who identifies investmentopportunities to the family office, and invests in such transactions on substantially thesame terms as the family office invests, but does not invest in other funds advised bythe family office, and whose assets as to which the family office directly or indirectlyprovides investment advice represent, in the aggregate, not more than 5 percent of thevalue of the total assets as to which the family office provides investment advice.

(c) Antifraud Authority.—A family office that would not be a family office, but forsubsection (b)(3), shall be deemed to be an investment adviser for the purposes ofparagraphs (1), (2) and (4) of section 206 of the Investment Advisers Act of 1940.

§ 412. Comptroller General Study on Custody Rule Costs.

The Comptroller General of the United States shall—

(1) Conduct a study of—

(A) The compliance costs associated with the current Securities and ExchangeCommission rules 204-2 (17 C.F.R. Parts 275.204-2) and rule 206(4)-2 (17 C.F.R.275.206(4)-2) under the Investment Advisers Act of 1940 regarding custody of funds orsecurities of clients by investment advisers; and

(B) The additional costs if subsection (b)(6) of rule 206(4)-2 (17 C.F.R. 275.206(4)-2(b)(6)) relating to operational independence were eliminated; and

(2) Submit a report to the Committee on Banking, Housing, and Urban Affairs of theSenate and the Committee on Financial Services of the House of Representatives on theresults of such study, not later than 3 years after the date of enactment of this Act.

§ 413. Adjusting the Accredited Investor Standard.

(a) In General.—The Commission shall adjust any net worth standard for an ac-credited investor, as set forth in the rules of the Commission under the Securities Act of1933, so that the individual net worth of any natural person, or joint net worth with thespouse of that person, at the time of purchase, is more than $1,000,000 (as such amountis adjusted periodically by rule of the Commission), excluding the value of the primaryresidence of such natural person, except that during the 4-year period that begins on thedate of enactment of this Act, any net worth standard shall be $1,000,000, excluding thevalue of the primary residence of such natural person.

(b) Review and Adjustment.—

(1) Initial Review and Adjustment.—

(A) Initial Review.—The Commission may undertake a review of the definition ofthe term ‘‘accredited investor’’, as such term applies to natural persons, to determinewhether the requirements of the definition, excluding the requirement relating to thenet worth standard described in subsection (a), should be adjusted or modified for theprotection of investors, in the public interest, and in light of the economy.

(B) Adjustment or Modification.—Upon completion of a review under subpara-graph (A), the Commission may, by notice and comment rulemaking, make such

2 Dodd-Frank Wall Street Reform and Consumer Protection Act § 412

adjustments to the definition of the term ‘‘accredited investor’’, excluding adjusting ormodifying the requirement relating to the net worth standard described in subsection(a), as such term applies to natural persons, as the Commission may deem appropriatefor the protection of investors, in the public interest, and in light of the economy.

(2) Subsequent Reviews and Adjustment.—

(A) Subsequent Reviews.—Not earlier than 4 years after the date of enactment ofthis Act, and not less frequently than once every 4 years thereafter, the Commissionshall undertake a review of the definition, in its entirety, of the term ‘‘accreditedinvestor’’, as defined in section 230.215 of title 17, Code of Federal Regulations, or anysuccessor thereto, as such term applies to natural persons, to determine whether therequirements of the definition should be adjusted or modified for the protection ofinvestors, in the public interest, and in light of the economy.

(B) Adjustment or Modification.—Upon completion of a review under subpara-graph (A), the Commission may, by notice and comment rulemaking, make suchadjustments to the definition of the term ‘‘accredited investor’’, as defined in section230.215 of title 17, Code of Federal Regulations, or any successor thereto, as such termapplies to natural persons, as the Commission may deem appropriate for the protectionof investors, in the public interest, and in light of the economy.

§ 415. GAO Study and Report on Accredited Investors.

The Comptroller General of the United States shall conduct a study on the appro-priate criteria for determining the financial thresholds or other criteria needed to qualifyfor accredited investor status and eligibility to invest in private funds, and shall submita report to the Committee on Banking, Housing, and Urban Affairs of the Senate andthe Committee on Financial Services of the House of Representatives on the results ofsuch study not later than 3 years after the date of enactment of this Act.

§ 416. GAO Study on Self-Regulatory Organization For Private Funds.

The Comptroller General of the United States shall—

(1) Conduct a study of the feasibility of forming a self-regulatory organization tooversee private funds; and

(2) Submit a report to the Committee on Banking, Housing, and Urban Affairs of theSenate and the Committee on Financial Services of the House of Representatives on theresults of such study, not later than 1 year after the date of enactment of this Act.

§ 417. Commission Study and Report on Short Selling.

(a) Studies.—The Division of Risk, Strategy, and Financial Innovation of theCommission shall conduct—

(1) A study, taking into account current scholarship, on the state of short selling onnational securities exchanges and in the over-the-counter markets, with particular at-tention to the impact of recent rule changes and the incidence of—

(A) The failure to deliver shares sold short; or

(B) Delivery of shares on the fourth day following the short sale transaction; and

(2) A study of—

(A) The feasibility, benefits, and costs of requiring reporting publicly, in real timeshort sale positions of publicly listed securities, or, in the alternative, reporting such

§ 417 Dodd-Frank Wall Street Reform and Consumer Protection Act 3

short positions in real time only to the Commission and the Financial Industry Regu-latory Authority; and

(B) The feasibility, benefits, and costs of conducting a voluntary pilot program inwhich public companies will agree to have all trades of their shares marked ‘‘short’’,‘‘market maker short’’, ‘‘buy’’, ‘‘buy-to-cover’’, or ‘‘long’’, and reported in real timethrough the Consolidated Tape.

(b) Reports.—The Commission shall submit a report to the Committee on Banking,Housing, and Urban Affairs of the Senate and the Committee on Financial Services ofthe House of Representatives—

(1) On the results of the study required under subsection (a)(1), including re-commendations for market improvements, not later than 2 years after the date ofenactment of this Act; and

(2) On the results of the study required under subsection (a)(2), not later than 1 yearafter the date of enactment of this Act.


§ 711. Definitions. [15 U.S.C. § 8301]

In this subtitle, the terms ‘‘prudential regulator’’, ‘‘swap’’, ‘‘swap dealer’’, ‘‘majorswap participant’’, ‘‘swap data repository’’, ‘‘associated person of a swap dealer ormajor swap participant’’, ‘‘eligible contract participant’’, ‘‘swap execution facility’’,‘‘security-based swap’’, ‘‘security-based swap dealer’’, ‘‘major security-based swapparticipant’’, and ‘‘associated person of a security-based swap dealer or major security-based swap participant’’ have the meanings given the terms in section 1a of theCommodity Exchange Act (7 U.S.C. 1a), including any modification of the meaningsunder section 721(b) of this Act.

§ 712. Review of Regulatory Authority. [15 U.S.C. § 8302]

(a) Consultation.—

(1) Commodity Futures Trading Commission.—Before commencing any rule-making or issuing an order regarding swaps, swap dealers, major swap participants,swap data repositories, derivative clearing organizations with regard to swaps, personsassociated with a swap dealer or major swap participant, eligible contract participants,or swap execution facilities pursuant to this subtitle, the Commodity Futures TradingCommission shall consult and coordinate to the extent possible with the Securities andExchange Commission and the prudential regulators for the purposes of assuringregulatory consistency and comparability, to the extent possible.

(2) Securities and Exchange Commission.—Before commencing any rulemaking orissuing an order regarding security-based swaps, security-based swap dealers, majorsecurity-based swap participants, security-based swap data repositories, clearingagencies with regard to security-based swaps, persons associated with a security-basedswap dealer or major security-based swap participant, eligible contract participantswith regard to security-based swaps, or security-based swap execution facilities pur-suant to subtitle B, the Securities and Exchange Commission shall consult and coor-dinate to the extent possible with the Commodity Futures Trading Commission and theprudential regulators for the purposes of assuring regulatory consistency and compa-rability, to the extent possible.


(3) Procedures and Deadline.—Such regulations shall be prescribed in accordancewith applicable requirements of title 5, United States Code, and shall be issued in finalform not later than 360 days after the date of enactment of this Act.

(4) Applicability.—The requirements of paragraphs (1) and (2) shall not apply to anorder issued—

(A) In connection with or arising from a violation or potential violation of anyprovision of the Commodity Exchange Act (7 U.S.C. 1 et seq.);

(B) In connection with or arising from a violation or potential violation of anyprovision of the securities laws; or

(C) In any proceeding that is conducted on the record in accordance with sections556 and 557 of title 5, United States Code.

(5) Effect.—Nothing in this subsection authorizes any consultation or procedure forconsultation that is not consistent with the requirements of subchapter II of chapter 5,and chapter 7, of title 5, United States Code (commonly known as the ‘‘AdministrativeProcedure Act’’).

(6) Rules; Orders.—In developing and promulgating rules or orders pursuant to thissubsection, each Commission shall consider the views of the prudential regulators.

(7) Treatment of Similar Products and Entities.—

(A) In General.—In adopting rules and orders under this subsection, the Com-modity Futures Trading Commission and the Securities and Exchange Commissionshall treat functionally or economically similar products or entities described inparagraphs (1) and (2) in a similar manner.

(B) Effect.—Nothing in this subtitle requires the Commodity Futures TradingCommission or the Securities and Exchange Commission to adopt joint rules or ordersthat treat functionally or economically similar products or entities described in para-graphs (1) and (2) in an identical manner.

(8) Mixed Swaps.—The Commodity Futures Trading Commission and the Secu-rities and Exchange Commission, after consultation with the Board of Governors, shalljointly prescribe such regulations regarding mixed swaps, as described in section1a(47)(D) of the Commodity Exchange Act (7 U.S.C. 1a(47)(D)) and in section3(a)(68)(D) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(68)(D)), as maybe necessary to carry out the purposes of this title.

(b) Limitation.—

(1) Commodity Futures Trading Commission.—Nothing in this title, unless spe-cifically provided, confers jurisdiction on the Commodity Futures Trading Commis-sion to issue a rule, regulation, or order providing for oversight or regulation of—

(A) Security-based swaps; or

(B) With regard to its activities or functions concerning security-based swaps—

(i) Security-based swap dealers;

(ii) Major security-based swap participants;

(iii) Security-based swap data repositories;

(iv) Associated persons of a security-based swap dealer or major security-basedswap participant;


(v) Eligible contract participants with respect to security-based swaps; or

(vi) Swap execution facilities with respect to security-based swaps.

(2) Securities and Exchange Commission.—Nothing in this title, unless specificallyprovided, confers jurisdiction on the Securities and Exchange Commission or Statesecurities regulators to issue a rule, regulation, or order providing for oversight orregulation of—

(A) Swaps; or

(B) With regard to its activities or functions concerning swaps—

(i) Swap dealers;

(ii) Major swap participants;

(iii) Swap data repositories;

(iv) Persons associated with a swap dealer or major swap participant;

(v) Eligible contract participants with respect to swaps; or

(vi) Swap execution facilities with respect to swaps.

(3) Prohibition on Certain Futures Associations and National Securities Associa-tions.—

(A) Futures Associations.—Notwithstanding any other provision of law (includingregulations), unless otherwise authorized by this title, no futures association registeredunder section 17 of the Commodity Exchange Act (7 U.S.C. 21) may issue a rule,regulation, or order for the oversight or regulation of, or otherwise assert jurisdictionover, for any purpose, any security-based swap, except that this subparagraph shall notlimit the authority of a registered futures association to examine for compliance with,and enforce, its rules on capital adequacy.

(B) National Securities Associations.—Notwithstanding any other provision of law(including regulations), unless otherwise authorized by this title, no national securitiesassociation registered under section 15A of the Securities Exchange Act of 1934 (15U.S.C. 78o-3) may issue a rule, regulation, or order for the oversight or regulation of, orotherwise assert jurisdiction over, for any purpose, any swap, except that this sub-paragraph shall not limit the authority of a national securities association to examinefor compliance with, and enforce, its rules on capital adequacy.

(c) Objection to Commission Regulation.—

(1) Filing of Petition For Review.—

(A) In General.—If either Commission referred to in this section determines that afinal rule, regulation, or order of the other Commission conflicts with subsection (a)(7)or (b), then the complaining Commission may obtain review of the final rule, regu-lation, or order in the United States Court of Appeals for the District of ColumbiaCircuit by filing in the court, not later than 60 days after the date of publication of thefinal rule, regulation, or order, a written petition requesting that the rule, regulation, ororder be set aside.

(B) Expedited Proceeding.—A proceeding described in subparagraph (A) shall beexpedited by the United States Court of Appeals for the District of Columbia Circuit.


(2) Transmittal of Petition and Record.—

(A) In General.—A copy of a petition described in paragraph (1) shall be trans-mitted not later than 1 business day after the date of filing by the complaining Com-mission to the Secretary of the responding Commission.

(B) Duty of Responding Commission.—On receipt of the copy of a petition de-scribed in paragraph (1), the responding Commission shall file with the United StatesCourt of Appeals for the District of Columbia Circuit—

(i) A copy of the rule, regulation, or order under review (including any documentsreferred to therein); and

(ii) Any other materials prescribed by the United States Court of Appeals for theDistrict of Columbia Circuit.

(3) Standard of Review.—The United States Court of Appeals for the District ofColumbia Circuit shall—

(A) Give deference to the views of neither Commission; and

(B) Determine to affirm or set aside a rule, regulation, or order of the respondingCommission under this subsection, based on the determination of the court as towhether the rule, regulation, or order is in conflict with subsection (a)(7) or (b), asapplicable.

(4) Judicial Stay.—The filing of a petition by the complaining Commission pur-suant to paragraph (1) shall operate as a stay of the rule, regulation, or order until thedate on which the determination of the United States Court of Appeals for the Districtof Columbia Circuit is final (including any appeal of the determination).

(d) Joint Rulemaking.—

(1) In General.—Notwithstanding any other provision of this title and subsections(b) and (c), the Commodity Futures Trading Commission and the Securities and Ex-change Commission, in consultation with the Board of Governors, shall further definethe terms ‘‘swap’’, ‘‘security-based swap’’, ‘‘swap dealer’’, ‘‘security-based swapdealer’’, ‘‘major swap participant’’, ‘‘major security-based swap participant’’, ‘‘eligiblecontract participant’’, and ‘‘security-based swap agreement’’ in section 1a(47)(A)(v) ofthe Commodity Exchange Act (7 U.S.C. 1a(47)(A)(v)) and section 3(a)(78) of theSecurities Exchange Act of 1934 (15 U.S.C. 78c(a)(78)).

(2) Authority of the Commissions.—

(A) In General.—Notwithstanding any other provision of this title, the CommodityFutures Trading Commission and the Securities and Exchange Commission, in con-sultation with the Board of Governors, shall jointly adopt such other rules regardingsuch definitions as the Commodity Futures Trading Commission and the Securities andExchange Commission determine are necessary and appropriate, in the public interest,and for the protection of investors.

(B) Trade Repository Recordkeeping.—Notwithstanding any other provision of thistitle, the Commodity Futures Trading Commission and the Securities and ExchangeCommission, in consultation with the Board of Governors, shall engage in joint rule-making to jointly adopt a rule or rules governing the books and records that are requiredto be kept and maintained regarding security-based swap agreements by persons thatare registered as swap data repositories under the Commodity Exchange Act, includinguniform rules that specify the data elements that shall be collected and maintained byeach repository.


(C) Books and Records.—Notwithstanding any other provision of this title, theCommodity Futures Trading Commission and the Securities and Exchange Commis-sion, in consultation with the Board of Governors, shall engage in joint rulemaking tojointly adopt a rule or rules governing books and records regarding security-based swapagreements, including daily trading records, for swap dealers, major swap participants,security-based swap dealers, and security-based swap participants.

(D) Comparable Rules.—Rules and regulations prescribed jointly under this title bythe Commodity Futures Trading Commission and the Securities and Exchange Com-mission shall be comparable to the maximum extent possible, taking into considerationdifferences in instruments and in the applicable statutory requirements.

(E) Tracking Uncleared Transactions.—Any rules prescribed under subparagraph(A) shall require the maintenance of records of all activities relating to security-basedswap agreement transactions defined under subparagraph (A) that are not cleared.

(F) Sharing of Information.—The Commodity Futures Trading Commission shallmake available to the Securities and Exchange Commission information relating tosecurity-based swap agreement transactions defined in subparagraph (A) that are notcleared.

(3) Financial Stability Oversight Council.—In the event that the CommodityFutures Trading Commission and the Securities and Exchange Commission fail tojointly prescribe rules pursuant to paragraph (1) or (2) in a timely manner, at therequest of either Commission, the Financial Stability Oversight Council shall resolvethe dispute—

(A) Within a reasonable time after receiving the request;

(B) After consideration of relevant information provided by each Commission; and

(C) By agreeing with 1 of the Commissions regarding the entirety of the matter orby determining a compromise position.

(4) Joint Interpretation.—Any interpretation of, or guidance by either Commissionregarding, a provision of this title, shall be effective only if issued jointly by theCommodity Futures Trading Commission and the Securities and Exchange Commis-sion, after consultation with the Board of Governors, if this title requires the Com-modity Futures Trading Commission and the Securities and Exchange Commission toissue joint regulations to implement the provision.

(e) Global Rulemaking Timeframe.—Unless otherwise provided in this title, or anamendment made by this title, the Commodity Futures Trading Commission or theSecurities and Exchange Commission, or both, shall individually, and not jointly,promulgate rules and regulations required of each Commission under this title or anamendment made by this title not later than 360 days after the date of enactment ofthis Act.

(f) Rules and Registration Before Final Effective Dates.—Beginning on the date ofenactment of this Act and notwithstanding the effective date of any provision of thisAct, the Commodity Futures Trading Commission and the Securities and ExchangeCommission may, in order to prepare for the effective dates of the provisions of thisAct—

(1) Promulgate rules, regulations, or orders permitted or required by this Act;

(2) Conduct studies and prepare reports and recommendations required by this Act;

(3) Register persons under the provisions of this Act; and


(4) Exempt persons, agreements, contracts, or transactions from provisions of thisAct, under the terms contained in this Act, provided, however, that no action by theCommodity Futures Trading Commission or the Securities and Exchange Commissiondescribed in paragraphs (1) through (4) shall become effective prior to the effectivedate applicable to such action under the provisions of this Act.

§ 714. Abusive Swaps. [15 U.S.C. § 8303]

The Commodity Futures Trading Commission or the Securities and ExchangeCommission, or both, individually may, by rule or order—

(1) Collect information as may be necessary concerning the markets for anytypes of—

(A) Swap (as defined in section 1a of the Commodity Exchange Act (7 U.S.C. 1a));or

(B) Security-based swap (as defined in section 1a of the Commodity Exchange Act(7 U.S.C. 1a)); and

(2) Issue a report with respect to any types of swaps or security-based swaps that theCommodity Futures Trading Commission or the Securities and Exchange Commissiondetermines to be detrimental to—

(A) The stability of a financial market; or

(B) Participants in a financial market.

§ 715. Authority to Prohibit Participation in Swap Activities. [15 U.S.C. § 8304]

Except as provided in section 4 of the Commodity Exchange Act (7 U.S.C. 6), if theCommodity Futures Trading Commission or the Securities and Exchange Commissiondetermines that the regulation of swaps or security-based swaps markets in a foreigncountry undermines the stability of the United States financial system, either Com-mission, in consultation with the Secretary of the Treasury, may prohibit an entitydomiciled in the foreign country from participating in the United States in any swap orsecurity-based swap activities.

§ 716. Prohibition Against Federal Government Bailouts of Swaps Entities. [15U.S.C. § 8305]

(a) Prohibition on Federal Assistance.—Notwithstanding any other provision oflaw (including regulations), no Federal assistance may be provided to any swaps entitywith respect to any swap, security-based swap, or other activity of the swaps entity.

(b) Definitions.—In this section:

(1) Federal Assistance.—The term ‘‘Federal assistance’’ means the use of anyadvances from any Federal Reserve credit facility or discount window that is not part ofa program or facility with broad-based eligibility under section 13(3)(A) of the FederalReserve Act, Federal Deposit Insurance Corporation insurance or guarantees for thepurpose of—

(A) Making any loan to, or purchasing any stock, equity interest, or debt obligationof, any swaps entity;

(B) Purchasing the assets of any swaps entity;

(C) Guaranteeing any loan or debt issuance of any swaps entity; or


(D) Entering into any assistance arrangement (including tax breaks), loss sharing, orprofit sharing with any swaps entity.

(2) Swaps Entity.—

(A) In General.—The term ‘‘swaps entity’’ means any swap dealer, security-basedswap dealer, major swap participant, major security-based swap participant, that isregistered under—

(i) The Commodity Exchange Act (7 U.S.C. 1 et seq.); or

(ii) The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.).

(B) Exclusion.—The term ‘‘swaps entity’’ does not include any major swap par-ticipant or major security-based swap participant that is an [sic] covered depositoryinstitution.

(3) Covered Depository Institution.—The term ‘‘covered depository institution’’means—

(A) An insured depository institution, as that term is defined in section 3 of theFederal Deposit Insurance Act (12 U.S.C. 1813); and

(B) A United States uninsured branch or agency of a foreign bank.

(c) Affiliates of Covered Depository Institutions.—The prohibition on Federal as-sistance contained in subsection (a) does not apply to and shall not prevent a covereddepository institution from having or establishing an affiliate which is a swaps entity, aslong as such covered depository institution is part of a bank holding company, savingsand loan holding company, or foreign banking organization (as such term is definedunder Regulation K of the Board of Governors of the Federal Reserve System (12 CFR211.21(o))), that is supervised by the Federal Reserve and such swaps entity affiliatecomplies with sections 23A and 23B of the Federal Reserve Act and such other re-quirements as the Commodity Futures Trading Commission or the Securities ExchangeCommission, as appropriate, and the Board of Governors of the Federal ReserveSystem, may determine to be necessary and appropriate.

(d) Only Bona Fide Hedging and Traditional Bank Activities Permitted.—

(1) In General.—The prohibition in subsection (a) shall not apply to any covereddepository institution that limits its swap and security-based swap activities to thefollowing:

(A) Hedging and Other Similar Risk Mitigation Activities.—Hedging and othersimilar risk mitigating activities directly related to the covered depository institution’sactivities.

(B) Non-Structured Finance Swap Activities.—Acting as a swaps entity for swapsor security-based swaps other than a structured finance swap.

(C) Certain Structured Finance Swap Activities.—Acting as a swaps entity forswaps or security-based swaps that are structured finance swaps, if—

(i) Such structured finance swaps are undertaken for hedging or risk managementpurposes; or

(ii) Each asset-backed security underlying such structured finance swaps is of acredit quality and of a type or category with respect to which the prudential regulatorshave jointly adopted rules authorizing swap or security-based swap activity by covereddepository institutions.


(2) Definitions.—For purposes of this subsection:

(A) Structured Finance Swap.—The term ‘‘structured finance swap’’ means a swapor security-based swap based on an asset-backed security (or group or index primarilycomprised of asset-backed securities).

(B) Asset-Backed Security.—The term ‘‘asset-backed security’’ has the meaninggiven such term under section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.78c(a)).

(e) Existing Swaps and Security-Based Swaps.—The prohibition in subsection (a)shall only apply to swaps or security-based swaps entered into by a covered depositoryinstitution after the end of the transition period described in subsection (f).

(f) Transition Period.—To the extent a covered depository institution qualifies as a‘‘swaps entity’’ and would be subject to the Federal assistance prohibition in subsection(a), the appropriate Federal banking agency, after consulting with and considering theviews of the Commodity Futures Trading Commission or the Securities ExchangeCommission, as appropriate, shall permit the covered depository institution up to 24months to divest the swaps entity or cease the activities that require registration as aswaps entity. In establishing the appropriate transition period to effect such divestitureor cessation of activities, which may include making the swaps entity an affiliate of thecovered depository institution, the appropriate Federal banking agency shall take intoaccount and make written findings regarding the potential impact of such divestiture orcessation of activities on the covered depository institution’s (1) mortgage lending, (2)small business lending, (3) job creation, and (4) capital formation versus the potentialnegative impact on insured depositors and the Deposit Insurance Fund of the FederalDeposit Insurance Corporation. The appropriate Federal banking agency may considersuch other factors as may be appropriate. The appropriate Federal banking agency mayplace such conditions on the covered depository institution’s divestiture or ceasing ofactivities of the swaps entity as it deems necessary and appropriate. The transitionperiod under this subsection may be extended by the appropriate Federal bankingagency, after consultation with the Commodity Futures Trading Commission and theSecurities and Exchange Commission, for a period of up to 1 additional year.

(g) Excluded Entities.—For purposes of this section, the term ‘‘swaps entity’’ shallnot include any insured depository institution under the Federal Deposit Insurance Actor a covered financial company under title II which is in a conservatorship, receivership,or a bridge bank operated by the Federal Deposit Insurance Corporation.

(h) Effective Date.—The prohibition in subsection (a) shall be effective 2 yearsfollowing the date on which this Act is effective.

(i) Liquidation Required.—

(1) In General.—

(A) FDIC Insured Institutions.—All swaps entities that are FDIC insured institu-tions that are put into receivership or declared insolvent as a result of swap or security-based swap activity of the swaps entities shall be subject to the termination or transferof that swap or security-based swap activity in accordance with applicable law pre-scribing the treatment of those contracts. No taxpayer funds shall be used to prevent thereceivership of any swap entity resulting from swap or security-based swap activity ofthe swaps entity.

(B) Institutions that Pose a Systemic Risk and Are Subject to Heightened PrudentialSupervision as Regulated Under Section 113.—All swaps entities that are institutionsthat pose a systemic risk and are subject to heightened prudential supervision asregulated under section 113, that are put into receivership or declared insolvent as aresult of swap or security-based swap activity of the swaps entities shall be subject to


the termination or transfer of that swap or security-based swap activity in accordancewith applicable law prescribing the treatment of those contracts. No taxpayer fundsshall be used to prevent the receivership of any swap entity resulting from swap orsecurity-based swap activity of the swaps entity.

(C) Non-FDIC Insured, Non-Systemically Significant Institutions Not Subject toHeightened Prudential Supervision as Regulated Under Section 113.—No taxpayerresources shall be used for the orderly liquidation of any swaps entities that are non-FDIC insured, non-systemically significant institutions not subject to heightenedprudential supervision as regulated under section 113.

(2) Recovery of Funds.—All funds expended on the termination or transfer of theswap or security-based swap activity of the swaps entity shall be recovered in accor-dance with applicable law from the disposition of assets of such swap entity or throughassessments, including on the financial sector as provided under applicable law.

(3) No Losses to Taxpayers.—Taxpayers shall bear no losses from the exercise ofany authority under this title.

(j) Prohibition on Unregulated Combination of Swaps Entities and Banking.—Atno time following adoption of the rules in subsection (k) may a bank or bank holdingcompany be permitted to be or become a swap entity unless it conducts its swap orsecurity-based swap activity in compliance with such minimum standards set by itsprudential regulator as are reasonably calculated to permit the swaps entity to conductits swap or security-based swap activities in a safe and sound manner and mitigatesystemic risk.

(k) Rules.—In prescribing rules, the prudential regulator for a swaps entity shallconsider the following factors:

(1) The expertise and managerial strength of the swaps entity, including systems foreffective oversight.

(2) The financial strength of the swaps entity.

(3) Systems for identifying, measuring and controlling risks arising from the swapsentity’s operations.

(4) Systems for identifying, measuring and controlling the swaps entity’s partici-pation in existing markets.

(5) Systems for controlling the swaps entity’s participation or entry into in newmarkets and products.

(l) Authority of the Financial Stability Oversight Council.—The Financial StabilityOversight Council may determine that, when other provisions established by this Actare insufficient to effectively mitigate systemic risk and protect taxpayers, that swapsentities may no longer access Federal assistance with respect to any swap, security-based swap, or other activity of the swaps entity. Any such determination by theFinancial Stability Oversight Council of a prohibition of federal assistance shall bemade on an institution-by-institution basis, and shall require the vote of not fewer thantwo-thirds of the members of the Financial Stability Oversight Council, which mustinclude the vote by the Chairman of the Council, the Chairman of the Board ofGovernors of the Federal Reserve System, and the Chairperson of the Federal DepositInsurance Corporation. Notice and hearing requirements for such determinations shallbe consistent with the standards provided in title I.

(m) Ban on Proprietary Trading in Derivatives.—An insured depository institutionshall comply with the prohibition on proprietary trading in derivatives as required bysection 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.


§ 718. Determining Status of Novel Derivative Products. [15 U.S.C. § 8306]

(a) Process For Determining the Status of a Novel Derivative Product.—

(1) Notice.—

(A) InGeneral.—Any person filing a proposal to list or trade a novel derivative productthat may have elements of both securities and contracts of sale of a commodity for futuredelivery (or options on such contracts or options on commodities) may concurrentlyprovide notice and furnish a copy of such filing with the Securities and Exchange Com-mission and the Commodity Futures Trading Commission. Any such notice shall state thatnotice has been made with both Commissions.

(B) Notification.—If no concurrent notice is made pursuant to subparagraph (A),within 5 business days after determining that a proposal that seeks to list or trade anovel derivative product may have elements of both securities and contracts of sale of acommodity for future delivery (or options on such contracts or options on commodi-ties), the Securities and Exchange Commission or the Commodity Futures TradingCommission, as applicable, shall notify the other Commission and provide a copy ofsuch filing to the other Commission.

(2) Request For Determination.—

(A) In General.—No later than 21 days after receipt of a notice under paragraph (1),or upon its own initiative if no such notice is received, the Commodity Futures TradingCommission may request that the Securities and Exchange Commission issue adetermination as to whether a product is a security, as defined in section 3(a)(10) of theSecurities Exchange Act of 1934 (15 U.S.C. 78c(a)(10)).

(B) Request.—No later than 21 days after receipt of a notice under paragraph (1), orupon its own initiative if no such notice is received, the Securities and ExchangeCommission may request that the Commodity Futures Trading Commission issuea determination as to whether a product is a contract of sale of a commodity forfuture delivery, an option on such a contract, or an option on a commodity subject tothe Commodity Futures Trading Commission’s exclusive jurisdiction under section2(a)(1)(A) of the Commodity Exchange Act (7 U.S.C. 2(a)(1)(A)).

(C) Requirement Relating to Request.—A request under subparagraph (A) or (B)shall be made by submitting such request, in writing, to the Securities and ExchangeCommission or the Commodity Futures Trading Commission, as applicable.

(D) Effect.—Nothing in this paragraph shall be construed to prevent—

(i) The Commodity Futures Trading Commission from requesting that the Securi-ties and Exchange Commission grant an exemption pursuant to section 36(a)(1) of theSecurities Exchange Act of 1934 (15 U.S.C. 78mm(a)(1)) with respect to a product thatis the subject of a filing under paragraph (1); or

(ii) The Securities and Exchange Commission from requesting that the CommodityFutures Trading Commission grant an exemption pursuant to section 4(c)(1) of theCommodity Exchange Act (7 U.S.C. 6(c)(1)) with respect to a product that is thesubject of a filing under paragraph (1),

Provided, however, that nothing in this subparagraph shall be construed to require theCommodity Futures Trading Commission or the Securities and Exchange Commissionto issue an exemption requested pursuant to this subparagraph; provided further, Thatan order granting or denying an exemption described in this subparagraph and issuedunder paragraph (3)(B) shall not be subject to judicial review pursuant to subsection (b).


(E) Withdrawal of Request.—A request under subparagraph (A) or (B) may bewithdrawn by the Commission making the request at any time prior to a determinationbeing made pursuant to paragraph (3) for any reason by providing written notice to thehead of the other Commission.

(3) Determination.—Notwithstanding any other provision of law, no later than 120days after the date of receipt of a request—

(A) Under subparagraph (A) or (B) of paragraph (2), unless such request has beenwithdrawn pursuant to paragraph (2)(E), the Securities and Exchange Commission orthe Commodity Futures Trading Commission, as applicable, shall, by order, issue thedetermination requested in subparagraph (A) or (B) of paragraph (2), as applicable, andthe reasons therefor; or

(B) Under paragraph (2)(D), unless such request has been withdrawn, the Securitiesand Exchange Commission or the Commodity Futures Trading Commission, as ap-plicable, shall grant an exemption or provide reasons for not granting such exemption,provided that any decision by the Securities and Exchange Commission not to grantsuch exemption shall not be reviewable under section 25 of the Securities ExchangeAct of 1934 (15 U.S.C. 78y).

(b) Judicial Resolution.—

(1) In General.—The Commodity Futures Trading Commission or the Securitiesand Exchange Commission may petition the United States Court of Appeals for theDistrict of Columbia Circuit for review of a final order of the other Commission issuedpursuant to subsection (a)(3)(A), with respect to a novel derivative product that mayhave elements of both securities and contracts of sale of a commodity for futuredelivery (or options on such contracts or options on commodities) that it believesaffects its statutory jurisdiction within 60 days after the date of entry of such order, awritten petition requesting a review of the order. Any such proceeding shall be ex-pedited by the Court of Appeals.

(2) Transmittal of Petition and Record.—A copy of a petition described in para-graph (1) shall be transmitted not later than 1 business day after filing by the com-plaining Commission to the responding Commission. On receipt of the petition, theresponding Commission shall file with the court a copy of the order under review andany documents referred to therein, and any other materials prescribed by the court.

(3) Standard of Review.—The court, in considering a petition filed pursuant toparagraph (1), shall give no deference to, or presumption in favor of, the views of eitherCommission.

(4) Judicial Stay.—The filing of a petition by the complaining Commission pur-suant to paragraph (1) shall operate as a stay of the order, until the date on which thedetermination of the court is final (including any appeal of the determination).

§ 719. Studies. [15 U.S.C. § 8307]

(a) Study on Effects of Position Limits on Trading on Exchanges in the UnitedStates.—

(1) Study.—The Commodity Futures Trading Commission, in consultation witheach entity that is a designated contract market under the Commodity Exchange Act,shall conduct a study of the effects (if any) of the position limits imposed pursuant tothe other provisions of this title on excessive speculation and on the movement oftransactions from exchanges in the United States to trading venues outside the UnitedStates.


(2) Report to the Congress.—Within 12 months after the imposition of positionlimits pursuant to the other provisions of this title, the Commodity Futures TradingCommission, in consultation with each entity that is a designated contract market underthe Commodity Exchange Act, shall submit to the Congress a report on the mattersdescribed in paragraph (1).

(3) Required Hearing.—Within 30 legislative days after the submission to theCongress of the report described in paragraph (2), the Committee on Agriculture of theHouse of Representatives shall hold a hearing examining the findings of the report.

(4) Biennial Reporting.—In addition to the study required in paragraph (1), theChairman of the Commodity Futures Trading Commission shall prepare and submit tothe Congress biennial reports on the growth or decline of the derivatives markets in theUnited States and abroad, which shall include assessments of the causes of any suchgrowth or decline, the effectiveness of regulatory regimes in managing systemic risk, acomparison of the costs of compliance at the time of the report for market participantssubject to regulation by the United States with the costs of compliance in December2008 for the market participants, and the quality of the available data. In preparing thereport, the Chairman shall solicit the views of, consult with, and address the concernsraised by, market participants, regulators, legislators, and other interested parties.

(b) Study on Feasibility of Requiring Use of Standardized Algorithmic DescriptionsFor Financial Derivatives.—

(1) In General.—The Securities and Exchange Commission and the CommodityFutures Trading Commission shall conduct a joint study of the feasibility of requiringthe derivatives industry to adopt standardized computer-readable algorithmic descrip-tions which may be used to describe complex and standardized financial derivatives.

(2) Goals.—The algorithmic descriptions defined in the study shall be designed tofacilitate computerized analysis of individual derivative contracts and to calculate netexposures to complex derivatives. The algorithmic descriptions shall be optimized forsimultaneous use by—

(A) Commercial users and traders of derivatives;

(B) Derivative clearing houses, exchanges and electronic trading platforms;

(C) Trade repositories and regulator investigations of market activities; and

(D) Systemic risk regulators.

The study will also examine the extent to which the algorithmic description, togetherwith standardized and extensible legal definitions, may serve as the binding legaldefinition of derivative contracts. The study will examine the logistics of possibleimplementations of standardized algorithmic descriptions for derivatives contracts.The study shall be limited to electronic formats for exchange of derivative contractdescriptions and will not contemplate disclosure of proprietary valuation models.

(3) International Coordination.—In conducting the study, the Securities and Ex-change Commission and the Commodity Futures Trading Commission shall coordinatethe study with international financial institutions and regulators as appropriate andpractical.

(4) Report.—Within 8 months after the date of the enactment of this Act, theSecurities and Exchange Commission and the Commodity Futures Trading Commis-sion shall jointly submit to the Committees on Agriculture and on Financial Services ofthe House of Representatives and the Committees on Agriculture, Nutrition, andForestry and on Banking, Housing, and Urban Affairs of the Senate a written reportwhich contains the results of the study required by paragraphs (1) through (3).


(c) International Swap Regulation.—

(1) In General.—The Commodity Futures Trading Commission and the Securitiesand Exchange Commission shall jointly conduct a study—

(A) Relating to—

(i) Swap regulation in the United States, Asia, and Europe; and

(ii) Clearing house and clearing agency regulation in the United States, Asia, andEurope; and

(B) That identifies areas of regulation that are similar in the United States, Asia andEurope and other areas of regulation that could be harmonized.

(2) Report.—Not later than 18 months after the date of enactment of this Act,the Commodity Futures Trading Commission and the Securities and ExchangeCommission shall submit to the Committee on Agriculture, Nutrition, and Forestry andthe Committee on Banking, Housing, and Urban Affairs of the Senate and the Com-mittee on Agriculture and the Committee on Financial Services of the House of Re-presentatives a report that includes a description of the results of the study undersubsection (a), including—

(A) Identification of the major exchanges and their regulator in each geographicarea for the trading of swaps and security-based swaps including a listing of the majorcontracts and their trading volumes and notional values as well as identification of themajor swap dealers participating in such markets;

(B) Identification of the major clearing houses and clearing agencies and theirregulator in each geographic area for the clearing of swaps and security-based swaps,including a listing of the major contracts and the clearing volumes and notional valuesas well as identification of the major clearing members of such clearing houses andclearing agencies in such markets;

(C) A description of the comparative methods of clearing swaps in the UnitedStates, Asia, and Europe; and

(D) A description of the various systems used for establishing margin on individualswaps, security-based swaps, and swap portfolios.

(d) Stable Value Contracts.—

(1) Determination.—

(A) Status.—Not later than 15 months after the date of the enactment of this Act, theSecurities and Exchange Commission and the Commodity Futures Trading Commis-sion shall, jointly, conduct a study to determine whether stable value contracts fallwithin the definition of a swap. In making the determination required under this sub-paragraph, the Commissions jointly shall consult with the Department of Labor, theDepartment of the Treasury, and the State entities that regulate the issuers of stablevalue contracts.

(B) Regulations.—If the Commissions determine that stable value contracts fallwithin the definition of a swap, the Commissions jointly shall determine if an ex-emption for stable value contracts from the definition of swap is appropriate and in thepublic interest. The Commissions shall issue regulations implementing the determi-nations required under this paragraph. Until the effective date of such regulations, andnotwithstanding any other provision of this title, the requirements of this title shall notapply to stable value contracts.


(C) Legal Certainty.—Stable value contracts in effect prior to the effective date ofthe regulations described in subparagraph (B) shall not be considered swaps.

(2) Definition.—For purposes of this subsection, the term ‘‘stable value contract’’means any contract, agreement, or transaction that provides a crediting interest rate andguaranty or financial assurance of liquidity at contract or book value prior to maturityoffered by a bank, insurance company, or other State or federally regulated financialinstitution for the benefit of any individual or commingled fund available as an in-vestment in an employee benefit plan (as defined in section 3(3) of the EmployeeRetirement Income Security Act of 1974, including plans described in section 3(32) ofsuch Act) subject to participant direction, an eligible deferred compensation plan (asdefined in section 457(b) of the Internal Revenue Code of 1986) that is maintained byan eligible employer described in section 457(e)(1)(A) of such Code, an arrangementdescribed in section 403(b) of such Code, or a qualified tuition program (as defined insection 529 of such Code).

§ 720. Memorandum. [15 U.S.C. § 8308]

(a)(1) The Commodity Futures Trading Commission and the Federal EnergyRegulatory Commission shall, not later than 180 days after the date of the enactment ofthis Act, negotiate a memorandum of understanding to establish procedures for—

(A) Applying their respective authorities in a manner so as to ensure effective andefficient regulation in the public interest;

(B) Resolving conflicts concerning overlapping jurisdiction between the 2 agencies;and

(C) Avoiding, to the extent possible, conflicting or duplicative regulation.

(2) Such memorandum and any subsequent amendments to the memorandum shallbe promptly submitted to the appropriate committees of Congress.

(b) The Commodity Futures Trading Commission and the Federal Energy Regu-latory Commission shall, not later than 180 days after the date of the enactment of thissection, negotiate a memorandum of understanding to share information that may berequested where either Commission is conducting an investigation into potential ma-nipulation, fraud, or market power abuse in markets subject to such Commission’sregulation or oversight. Shared information shall remain subject to the same restric-tions on disclosure applicable to the Commission initially holding the information.

§ 721. Definitions. [15 U.S.C. § 8321]


(b) Authority to Define Terms.—The Commodity Futures Trading Commission mayadopt a rule to define—

(1) The term ‘‘commercial risk’’; and

(2) Any other term included in an amendment to the Commodity Exchange Act (7U.S.C. 1 et seq.) made by this subtitle.

(c)Modification of Definitions.—To include transactions and entities that have beenstructured to evade this subtitle (or an amendment made by this subtitle), the Com-modity Futures Trading Commission shall adopt a rule to further define the terms‘‘swap’’, ‘‘swap dealer’’, ‘‘major swap participant’’, and ‘‘eligible contract partici-pant’’.


(d)–(e) [Omitted; paragraphs (d)–(e) amended existing law.]

(f) Effective Date.—Notwithstanding any other provision of this Act, the amend-ments made by subsection (a)(4) shall take effect on June 1, 2010.

§ 722. Jurisdiction. [15 U.S.C. § 8322]

(a)–(f) [Omitted; paragraphs (a)–(f) amended existing law.]

(g) Authority of FERC.—Nothing in the Wall Street Transparency and Account-ability Act of 2010 or the amendments to the Commodity Exchange Act made by suchAct shall limit or affect any statutory enforcement authority of the Federal EnergyRegulatory Commission pursuant to section 222 of the Federal Power Act and section4A of the Natural Gas Act that existed prior to the date of enactment of the Wall StreetTransparency and Accountability Act of 2010.

(h) [Omitted; paragraph (h) amended existing law.]

§ 726. Rulemaking on Conflict of Interest. [15 U.S.C. § 8323]

(a) In General.—In order to mitigate conflicts of interest, not later than 180 daysafter the date of enactment of the Wall Street Transparency and Accountability Actof 2010, the Commodity Futures Trading Commission shall adopt rules which mayinclude numerical limits on the control of, or the voting rights with respect to, anyderivatives clearing organization that clears swaps, or swap execution facility or boardof trade designated as a contract market that posts swaps or makes swaps availablefor trading, by a bank holding company (as defined in section 2 of the BankHolding Company Act of 1956 (12 U.S.C. 1841)) with total consolidated assets of$50,000,000,000 or more, a nonbank financial company (as defined in section 102)supervised by the Board, an affiliate of such a bank holding company or nonbankfinancial company, a swap dealer, major swap participant, or associated person of aswap dealer or major swap participant.

(b) Purposes.—The Commission shall adopt rules if it determines, after the reviewdescribed in subsection (a), that such rules are necessary or appropriate to improve thegovernance of, or to mitigate systemic risk, promote competition, or mitigate conflictsof interest in connection with a swap dealer or major swap participant’s conduct ofbusiness with, a derivatives clearing organization, contract market, or swap executionfacility that clears or posts swaps or makes swaps available for trading and in whichsuch swap dealer or major swap participant has a material debt or equity investment.

(c) Considerations.—In adopting rules pursuant to this section, the CommodityFutures Trading Commission shall consider any conflicts of interest arising from theamount of equity owned by a single investor, the ability to vote, cause the vote of, orwithhold votes entitled to be cast on any matters by the holders of the ownershipinterest, and the governance arrangements of any derivatives clearing organization thatclears swaps, or swap execution facility or board of trade designated as a contractmarket that posts swaps or makes swaps available for trading.

§ 750. Study on Oversight of Carbon Markets.

(a) Interagency Working Group.—There is established to carry out this section aninteragency working group (referred to in this section as the ‘‘interagency group’’)composed of the following members or designees:

(1) The Chairman of the Commodity Futures Trading Commission (referred to inthis section as the ‘‘Commission’’), who shall serve as Chairman of the interagencygroup.


(2) The Secretary of Agriculture.

(3) The Secretary of the Treasury.

(4) The Chairman of the Securities and Exchange Commission.

(5) The Administrator of the Environmental Protection Agency.

(6) The Chairman of the Federal Energy Regulatory Commission.

(7) The Commissioner of the Federal Trade Commission.

(8) The Administrator of the Energy Information Administration.

(b) Administrative Support.—The Commission shall provide the interagency groupsuch administrative support services as are necessary to enable the interagency group tocarry out the functions of the interagency group under this section.

(c) Consultation.—In carrying out this section, the interagency group shall consultwith representatives of exchanges, clearinghouses, self-regulatory bodies, major car-bon market participants, consumers, and the general public, as the interagency groupdetermines to be appropriate.

(d) Study.—The interagency group shall conduct a study on the oversight of existingand prospective carbon markets to ensure an efficient, secure, and transparent carbonmarket, including oversight of spot markets and derivative markets.

(e) Report.—Not later than 180 days after the date of enactment of this Act, theinteragency group shall submit to Congress a report on the results of the study con-ducted under subsection (b), including recommendations for the oversight of existingand prospective carbon markets to ensure an efficient, secure, and transparent carbonmarket, including oversight of spot markets and derivative markets.

§ 752. International Harmonization. [15 U.S.C. § 8325]

(a) In order to promote effective and consistent global regulation of swaps andsecurity-based swaps, the Commodity Futures Trading Commission, the Securities andExchange Commission, and the prudential regulators (as that term is defined in section1a(39) of the Commodity Exchange Act), as appropriate, shall consult and coordinatewith foreign regulatory authorities on the establishment of consistent internationalstandards with respect to the regulation (including fees) of swaps, security-basedswaps, swap entities, and security-based swap entities and may agree to such infor-mation-sharing arrangements as may be deemed to be necessary or appropriate in thepublic interest or for the protection of investors, swap counterparties, and security-based swap counterparties.

(b) In order to promote effective and consistent global regulation of contracts of saleof a commodity for future delivery and options on such contracts, the CommodityFutures Trading Commission shall consult and coordinate with foreign regulatoryauthorities on the establishment of consistent international standards with respect to theregulation of contracts of sale of a commodity for future delivery and options on suchcontracts, and may agree to such information-sharing arrangements as may be deemednecessary or appropriate in the public interest for the protection of users of contracts ofsale of a commodity for future delivery.

§ 761. Definitions Under the Securities Exchange Act of 1934. [15 U.S.C. § 8341]



(b) Authority to Further Define Terms.—The Securities and Exchange Commissionmay, by rule, further define—

(1) The term ‘‘commercial risk’’;

(2) Any other term included in an amendment to the Securities Exchange Act of1934 (15 U.S.C. 78c(a)) made by this subtitle; and

(3) The terms ‘‘security-based swap’’, ‘‘security-based swap dealer’’, ‘‘major se-curity-based swap participant’’, and ‘‘eligible contract participant’’, with regard tosecurity-based swaps (as such terms are defined in the amendments made by subsection(a)) for the purpose of including transactions and entities that have been structured toevade this subtitle or the amendments made by this subtitle.

§ 764. Registration and Regulation of Security-Based Swap Dealers and MajorSecurity-Based Swap Participants. [15 U.S.C. § 8342]


(b) Savings Clause.—Notwithstanding any other provision of this title, nothing inthis subtitle shall be construed as divesting any appropriate Federal banking agency ofany authority it may have to establish or enforce, with respect to a person for whichsuch agency is the appropriate Federal banking agency, prudential or other standardspursuant to authority by Federal law other than this title.

§ 765. Rulemaking on Conflict of Interest. [15 U.S.C. § 8343]

(a) In General.—In order to mitigate conflicts of interest, not later than 180 daysafter the date of enactment of the Wall Street Transparency and Accountability Act of2010, the Securities and Exchange Commission shall adopt rules which may includenumerical limits on the control of, or the voting rights with respect to, any clearingagency that clears security-based swaps, or on the control of any security-based swapexecution facility or national securities exchange that posts or makes available fortrading security-based swaps, by a bank holding company (as defined in section 2 of theBank Holding Company Act of 1956 (12 U.S.C. 1841)) with total consolidated assetsof $50,000,000,000 or more, a nonblank financial company (as defined in section 102)supervised by the Board of Governors of the Federal Reserve System, affiliate of such abank holding company or nonbank financial company, a security-based swap dealer,major security-based swap participant, or person associated with a security-based swapdealer or major security-based swap participant.

(b) Purposes.—The Securities and Exchange Commission shall adopt rules if theCommission determines, after the review described in subsection (a), that such rules arenecessary or appropriate to improve the governance of, or to mitigate systemic risk,promote competition, or mitigate conflicts of interest in connection with a security-based swap dealer or major security-based swap participant’s conduct of business with,a clearing agency, national securities exchange, or security-based swap execution fa-cility that clears, posts, or makes available for trading security-based swaps and inwhich such security-based swap dealer or major security-based swap participant has amaterial debt or equity investment.

(c) Considerations.—In adopting rules pursuant to this section, the Securities andExchange Commission shall consider any conflicts of interest arising from the amountof equity owned by a single investor, the ability to vote, cause the vote of, or withholdvotes entitled to be cast on any matters by the holders of the ownership interest, and thegovernance arrangements of any derivatives clearing organization that clears swaps, orswap execution facility or board of trade designated as a contract market that postsswaps or makes swaps available for trading.


§ 771. Other Authority. [15 U.S.C. § 8344]

Unless otherwise provided by its terms, this subtitle does not divest any appropriateFederal banking agency, the Securities and Exchange Commission, the CommodityFutures Trading Commission, or any other Federal or State agency, of any authorityderived from any other provision of applicable law.

TITLE IX—INVESTOR PROTECTIONS AND IMPROVEMENTSTO THE REGULATION OF SECURITIES

§ 913. Study and Rulemaking Regarding Obligations of Brokers, Dealers, andInvestment Advisers.

(a) Definition.—For purposes of this section, the term ‘‘retail customer’’ means anatural person, or the legal representative of such natural person, who—

(1) Receives personalized investment advice about securities from a broker ordealer or investment adviser; and

(2) Uses such advice primarily for personal, family, or household purposes.

(b) Study.—The Commission shall conduct a study to evaluate—

(1) The effectiveness of existing legal or regulatory standards of care for brokers,dealers, investment advisers, persons associated with brokers or dealers, and personsassociated with investment advisers for providing personalized investment advice andrecommendations about securities to retail customers imposed by the Commission anda national securities association, and other Federal and State legal or regulatory stan-dards; and

(2) Whether there are legal or regulatory gaps, shortcomings, or overlaps in legal orregulatory standards in the protection of retail customers relating to the standards ofcare for brokers, dealers, investment advisers, persons associated with brokers ordealers, and persons associated with investment advisers for providing personalizedinvestment advice about securities to retail customers that should be addressed by ruleor statute.

(c) Considerations.—In conducting the study required under subsection (b), theCommission shall consider—

(1) The effectiveness of existing legal or regulatory standards of care for brokers,dealers, investment advisers, persons associated with brokers or dealers, and personsassociated with investment advisers for providing personalized investment advice andrecommendations about securities to retail customers imposed by the Commission anda national securities association, and other Federal and State legal or regulatory stan-dards;

(2) Whether there are legal or regulatory gaps, shortcomings, or overlaps in legal orregulatory standards in the protection of retail customers relating to the standards ofcare for brokers, dealers, investment advisers, persons associated with brokers ordealers, and persons associated with investment advisers for providing personalizedinvestment advice about securities to retail customers that should be addressed by ruleor statute;

(3) Whether retail customers understand that there are different standards of careapplicable to brokers, dealers, investment advisers, persons associated with brokers ordealers, and persons associated with investment advisers in the provision of person-alized investment advice about securities to retail customers;


(4) Whether the existence of different standards of care applicable to brokers,dealers, investment advisers, persons associated with brokers or dealers, and personsassociated with investment advisers is a source of confusion for retail customers re-garding the quality of personalized investment advice that retail customers receive;

(5) The regulatory, examination, and enforcement resources devoted to, and ac-tivities of, the Commission, the States, and a national securities association to enforcethe standards of care for brokers, dealers, investment advisers, persons associated withbrokers or dealers, and persons associated with investment advisers when providingpersonalized investment advice and recommendations about securities to retail cus-tomers, including—

(A) The effectiveness of the examinations of brokers, dealers, and investment ad-visers in determining compliance with regulations;

(B) The frequency of the examinations; and

(C) The length of time of the examinations;

(6) The substantive differences in the regulation of brokers, dealers, and investmentadvisers, when providing personalized investment advice and recommendations aboutsecurities to retail customers;

(7) The specific instances related to the provision of personalized investment adviceabout securities in which—

(A) The regulation and oversight of investment advisers provide greater protectionto retail customers than the regulation and oversight of brokers and dealers; and

(B) The regulation and oversight of brokers and dealers provide greater protectionto retail customers than the regulation and oversight of investment advisers;

(8) The existing legal or regulatory standards of State securities regulators and otherregulators intended to protect retail customers;

(9) The potential impact on retail customers, including the potential impact onaccess of retail customers to the range of products and services offered by brokers anddealers, of imposing upon brokers, dealers, and persons associated with brokers ordealers—

(A) The standard of care applied under the Investment Advisers Act of 1940 (15U.S.C. 80b-1 et seq.) for providing personalized investment advice about securities toretail customers of investment advisers, as interpreted by the Commission and thecourts; and

(B) Other requirements of the Investment Advisers Act of 1940 (15 U.S.C. 80b-1et seq.);

(10) The potential impact of eliminating the broker and dealer exclusion from thedefinition of ‘‘investment adviser’’ under section 202(a)(11)(C) of the InvestmentAdvisers Act of 1940 (15 U.S.C. 80b-2(a)(11)(C)), in terms of—

(A) The impact and potential benefits and harm to retail customers that could resultfrom such a change, including any potential impact on access to personalized invest-ment advice and recommendations about securities to retail customers or the avail-ability of such advice and recommendations;

(B) The number of additional entities and individuals that would be required toregister under, or become subject to, the Investment Advisers Act of 1940 (15 U.S.C.80b-1 et seq.), and the additional requirements to which brokers, dealers, and personsassociated with brokers and dealers would become subject, including—


(i) Any potential additional associated person licensing, registration, and exami-nation requirements; and

(ii) The additional costs, if any, to the additional entities and individuals; and

(C) The impact on Commission and State resources to—

(i) Conduct examinations of registered investment advisers and the representativesof registered investment advisers, including the impact on the examination cycle; and

(ii) Enforce the standard of care and other applicable requirements imposed underthe Investment Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.);

(11) The varying level of services provided by brokers, dealers, investment ad-visers, persons associated with brokers or dealers, and persons associated with in-vestment advisers to retail customers and the varying scope and terms of retailcustomer relationships of brokers, dealers, investment advisers, persons associatedwith brokers or dealers, and persons associated with investment advisers with suchretail customers;

(12) The potential impact upon retail customers that could result from potentialchanges in the regulatory requirements or legal standards of care affecting brokers,dealers, investment advisers, persons associated with brokers or dealers, and personsassociated with investment advisers relating to their obligations to retail customersregarding the provision of investment advice, including any potential impact on—

(A) Protection from fraud;

(B) Access to personalized investment advice, and recommendations about secu-rities to retail customers; or

(C) The availability of such advice and recommendations;

(13) The potential additional costs and expenses to—

(A) Retail customers regarding and the potential impact on the profitability of theirinvestment decisions; and

(B) Brokers, dealers, and investment advisers resulting from potential changes inthe regulatory requirements or legal standards affecting brokers, dealers, investmentadvisers, persons associated with brokers or dealers, and persons associated with in-vestment advisers relating to their obligations, including duty of care, to retail custo-mers; and

(14) Any other consideration that the Commission considers necessary and ap-propriate in determining whether to conduct a rulemaking under subsection (f).

(d) Report.—

(1) In General.—Not later than 6 months after the date of enactment of this Act, theCommission shall submit a report on the study required under subsection (b) to—

(A) The Committee on Banking, Housing, and Urban Affairs of the Senate; and

(B) The Committee on Financial Services of the House of Representatives.

(2) Content Requirements.—The report required under paragraph (1) shall describethe findings, conclusions, and recommendations of the Commission from the studyrequired under subsection (b), including—


(A) A description of the considerations, analysis, and public and industry input thatthe Commission considered, as required under subsection (b), to make such findings,conclusions, and policy recommendations; and

(B) An analysis of whether any identified legal or regulatory gaps, shortcomings, oroverlap in legal or regulatory standards in the protection of retail customers relating tothe standards of care for brokers, dealers, investment advisers, persons associated withbrokers or dealers, and persons associated with investment advisers for providingpersonalized investment advice about securities to retail customers.

(e) Public Comment.—The Commission shall seek and consider public input,comments, and data in order to prepare the report required under subsection (d).

(f) Rulemaking.—The Commission may commence a rulemaking, as necessary orappropriate in the public interest and for the protection of retail customers (andsuch other customers as the Commission may by rule provide), to address the legalor regulatory standards of care for brokers, dealers, investment advisers, personsassociated with brokers or dealers, and persons associated with investment advisers forproviding personalized investment advice about securities to such retail customers. TheCommission shall consider the findings conclusions, and recommendations of the studyrequired under subsection (b).

(g)–(h) [Omitted; paragraphs (g)–(h) amended existing law.]

§ 914. Study on Enhancing Investment Adviser Examinations.

(a) Study Required.—

(1) In General.—The Commission shall review and analyze the need for enhancedexamination and enforcement resources for investment advisers.

(2) Areas of Consideration.—The study required by this subsection shall examine—

(A) The number and frequency of examinations of investment advisers by theCommission over the 5 years preceding the date of the enactment of this subtitle;

(B) The extent to which having Congress authorize the Commission to designateone or more self-regulatory organizations to augment the Commission’s efforts inoverseeing investment advisers would improve the frequency of examinations of in-vestment advisers; and

(C) Current and potential approaches to examining the investment advisory activ-ities of dually registered broker-dealers and investment advisers or affiliated broker-dealers and investment advisers.

(b) Report Required.—The Commission shall report its findings to the Committeeon Financial Services of the House of Representatives and the Committee on Banking,Housing, and Urban Affairs of the Senate, not later than 180 days after the date ofenactment of this subtitle, and shall use such findings to revise its rules and regulations,as necessary. The report shall include a discussion of regulatory or legislative steps thatare recommended or that may be necessary to address concerns identified in the study.

§ 917. Study Regarding Financial Literacy Among Investors.

(a) In General.—The Commission shall conduct a study to identify—

(1) The existing level of financial literacy among retail investors, including sub-groups of investors identified by the Commission;


(2) Methods to improve the timing, content, and format of disclosures to investorswith respect to financial intermediaries, investment products, and investment services;

(3) The most useful and understandable relevant information that retail investorsneed to make informed financial decisions before engaging a financial intermediary orpurchasing an investment product or service that is typically sold to retail investors,including shares of open-end companies, as that term is defined in section 5 of theInvestment Company Act of 1940 (15 U.S.C. 80a-5) that are registered under section 8of that Act;

(4) Methods to increase the transparency of expenses and conflicts of interests intransactions involving investment services and products, including shares of open-endcompanies described in paragraph (3);

(5) The most effective existing private and public efforts to educate investors; and

(6) In consultation with the Financial Literacy and Education Commission, astrategy (including, to the extent practicable, measurable goals and objectives) toincrease the financial literacy of investors in order to bring about a positive change ininvestor behavior.

(b) Report.—Not later than 2 years after the date of enactment of this Act, theCommission shall submit a report on the study required under subsection (a) to—

(1) The Committee on Banking, Housing, and Urban Affairs of the Senate; and

(2) The Committee on Financial Services of the House of Representatives.

§ 918. Study Regarding Mutual Fund Advertising.

(a) In General.—The Comptroller General of the United States shall conduct astudy on mutual fund advertising to identify—

(1) Existing and proposed regulatory requirements for open-end investment com-pany advertisements;

(2) Current marketing practices for the sale of open-end investment companyshares, including the use of past performance data, funds that have merged, and in-cubator funds;

(3) The impact of such advertising on consumers; and

(4) Recommendations to improve investor protections in mutual fund advertisingand additional information necessary to ensure that investors can make informed fi-nancial decisions when purchasing shares.

(b) Report.—Not later than 18 months after the date of enactment of this Act, theComptroller General of the United States shall submit a report on the results of thestudy conducted under subsection (a) to—

(1) The Committee on Banking, Housing, and Urban Affairs of the United StatesSenate; and

(2) The Committee on Financial Services of the House of Representatives.

§ 919A. Study on Conflicts of Interest.

(a) In General.—The Comptroller General of the United States shall conduct astudy—

§ 919A Dodd-Frank Wall Street Reform and Consumer Protection Act 25

(1) To identify and examine potential conflicts of interest that exist between thestaffs of the investment banking and equity and fixed income securities analyst func-tions within the same firm; and

(2) To make recommendations to Congress designed to protect investors in light ofsuch conflicts.

(b) Considerations.—In conducting the study under subsection (a), the ComptrollerGeneral shall—

(1) Consider—

(A) The potential for investor harm resulting from conflicts, including considerationof the forms of misconduct engaged in by the several securities firms and individualsthat entered into the Global Analyst Research Settlements in 2003 (also known as the‘‘Global Settlement’’);

(B) The nature and benefits of the undertakings to which those firms agreed inenforcement proceedings, including firewalls between research and investmentbanking, separate reporting lines, dedicated legal and compliance staffs, allocation ofbudget, physical separation, compensation, employee performance evaluations, cov-erage decisions, limitations on soliciting investment banking business, disclosures,transparency, and other measures;

(C) Whether any such undertakings should be codified and applied permanently tosecurities firms, or whether the Commission should adopt rules applying any suchundertakings to securities firms; and

(D) Whether to recommend regulatory or legislative measures designed to mitigatepossible adverse consequences to investors arising from the conflicts of interest or toenhance investor protection or confidence in the integrity of the securities markets; and

(2) Consult with State attorneys general, State securities officials, the Commission,the Financial Industry Regulatory Authority (‘‘FINRA’’), NYSE Regulation, investoradvocates, brokers, dealers, retail investors, institutional investors, and academics.

(c) Report.—The Comptroller General shall submit a report on the results of thestudy required by this section to the Committee on Banking, Housing, and UrbanAffairs of the Senate and the Committee on Financial Services of the House of Re-presentatives, not later than 18 months after the date of enactment of this Act.

§ 919B. Study on Improved Investor Access to Information on InvestmentAdvisers and Broker-Dealers.

(a) Study.—

(1) In General.—Not later than 6 months after the date of enactment of this Act, theCommission shall complete a study, including recommendations, of ways to improvethe access of investors to registration information (including disciplinary actions,regulatory, judicial, and arbitration proceedings, and other information) about regis-tered and previously registered investment advisers, associated persons of investmentadvisers, brokers and dealers and their associated persons on the existing CentralRegistration Depository and Investment Adviser Registration Depository systems, aswell as identify additional information that should be made publicly available.

(2) Contents.—The study required by subsection (a) shall include an analysis of theadvantages and disadvantages of further centralizing access to the information con-tained in the 2 systems, including—

(A) Identification of those data pertinent to investors; and

26 Dodd-Frank Wall Street Reform and Consumer Protection Act § 919B

(B) The identification of the method and format for displaying and publishing suchdata to enhance accessibility by and utility to investors.

(b) Implementation.—Not later than 18 months after the date of completion of thestudy required by subsection (a), the Commission shall implement any recommenda-tions of the study.

§ 919C. Study on Financial Planners and the Use of Financial Designations.

(a) In General.—The Comptroller General of the United States shall conduct astudy to evaluate—

(1) The effectiveness of State and Federal regulations to protect investors and otherconsumers from individuals who hold themselves out as financial planners through theuse of misleading titles, designations, or marketing materials;

(2) Current State and Federal oversight structure and regulations for financialplanners; and

(3) Legal or regulatory gaps in the regulation of financial planners and other in-dividuals who provide or offer to provide financial planning services to consumers.

(b) Considerations.—In conducting the study required under subsection (a), theComptroller General shall consider—

(1) The role of financial planners in providing advice regarding the management offinancial resources, including investment planning, income tax planning, educationplanning, retirement planning, estate planning, and risk management;

(2) Whether current regulations at the State and Federal level provide adequateethical and professional standards for financial planners;

(3) The possible risk posed to investors and other consumers by individuals whohold themselves out as financial planners or as otherwise providing financial planningservices in connection with the sale of financial products, including insurance andsecurities;

(4) The possible risk posed to investors and other consumers by individuals whootherwise use titles, designations, or marketing materials in a misleading way inconnection with the delivery of financial advice;

(6) [sic] The ability of investors and other consumers to understand licensing re-quirements and standards of care that apply to individuals who hold themselves out asfinancial planners or as otherwise providing financial planning services;

(7) The possible benefits to investors and other consumers of regulation and pro-fessional oversight of financial planners; and

(8) Any other consideration that the Comptroller General deems necessary or ap-propriate to effectively execute the study required under subsection (a).

(c) Recommendations.—In providing recommendations for the appropriate regu-lation of financial planners and other individuals who provide or offer to providefinancial planning services, in order to protect investors and other consumers of fi-nancial planning services, the Comptroller General shall consider—

(1) The appropriate structure for regulation of financial planners and individualsproviding financial planning services; and

(2) The appropriate scope of the regulations needed to protect investors and otherconsumers, including but not limited to the need to establish competency standards,

§ 919C Dodd-Frank Wall Street Reform and Consumer Protection Act 27

practice standards, ethical guidelines, disciplinary authority, and transparency to in-vestors and other consumers.

(d) Report.—

(1) In General.—Not later than 180 days after the date of enactment of this Act,the Comptroller General shall submit a report on the study required under subsection(a) to—

(A) The Committee on Banking, Housing, and Urban Affairs of the Senate;

(B) The Special Committee on Aging of the Senate; and

(C) The Committee on Financial Services of the House of Representatives.

(2) Content Requirements.—The report required under paragraph (1) shall describethe findings and determinations made by the Comptroller General in carrying out thestudy required under subsection (a), including a description of the considerations,analysis, and government, public, industry, nonprofit and consumer input that theComptroller General considered to make such findings, conclusions, and legislative,regulatory, or other recommendations.

§ 922. Whistleblower Protection.

(a)–(c) [Omitted; paragraphs (a)–(c) amended existing law.]

(d) Study of Whistleblower Protection Program.—

(1) Study.—The Inspector General of the Commission shall conduct a study of thewhistleblower protections established under the amendments made by this section,including—

(A) Whether the final rules and regulation issued under the amendments made bythis section have made the whistleblower protection program (referred to in this sub-section as the ‘‘program’’) clearly defined and user-friendly;

(B) Whether the program is promoted on the website of the Commission and hasbeen widely publicized;

(C) Whether the Commission is prompt in—

(i) Responding to—

(I) Information provided by whistleblowers; and

(II) Applications for awards filed by whistleblowers;

(ii) Updating whistleblowers about the status of their applications; and

(iii) Otherwise communicating with the interested parties;

(D) Whether the minimum and maximum reward levels are adequate to enticewhistleblowers to come forward with information and whether the reward levels are sohigh as to encourage illegitimate whistleblower claims;

(E) Whether the appeals process has been unduly burdensome for the Commission;

(F) Whether the funding mechanism for the Investor Protection Fund is adequate;

(G) Whether, in the interest of protecting investors and identifying and preventingfraud, it would be useful for Congress to consider empowering whistleblowers or otherindividuals, who have already attempted to pursue the case through the Commission, to


have a private right of action to bring suit based on the facts of the same case, on behalfof the Government and themselves, against persons who have committee [sic] secu-rities fraud;

(H)(i) Whether the exemption under section 552(b)(3) of title 5 (known as theFreedom of Information Act) established in section 21F(h)(2)(A) of the SecuritiesExchange Act of 1934, as added by this Act, aids whistleblowers in disclosing infor-mation to the Commission;

(ii) What impact the exemption described in clause (i) has had on the ability of thepublic to access information about the regulation and enforcement by the Commissionof securities; and

(iii) Any recommendations on whether the exemption described in clause (i) shouldremain in effect; and

(I) Such other matters as the Inspector General deems appropriate.

(2) Report.—Not later than 30 months after the date of enactment of this Act, theInspector General shall—

(A) Submit a report on the findings of the study required under paragraph (1) to theCommittee on Banking, Housing, and Urban Affairs of the Senate and the Committeeon Financial Services of the House; and

(B) Make the report described in subparagraph (A) available to the public throughpublication of the report on the website of the Commission.

§ 924. Implementation and Transition Provisions For Whistleblower Protection.

(a) Implementing Rules.—The Commission shall issue final regulations im-plementing the provisions of section 21F of the Securities Exchange Act of 1934, asadded by this subtitle, not later than 270 days after the date of enactment of this Act.

(b) Original Information.—Information provided to the Commission in writing bya whistleblower shall not lose the status of original information (as defined in section21F(a)(3) of the Securities Exchange Act of 1934, as added by this subtitle) solelybecause the whistleblower provided the information prior to the effective date of theregulations, if the information is provided by the whistleblower after the date of en-actment of this subtitle.

(c) Awards.—Awhistleblower may receive an award pursuant to section 21F of theSecurities Exchange Act of 1934, as added by this subtitle, regardless of whether anyviolation of a provision of the securities laws, or a rule or regulation thereunder,underlying the judicial or administrative action upon which the award is based, oc-curred prior to the date of enactment of this subtitle.

(d) Administration and Enforcement.—The Securities and Exchange Commissionshall establish a separate office within the Commission to administer and enforce theprovisions of section 21F of the Securities Exchange Act of 1934 (as add by section922(a)). Such office shall report annually to the Committee on Banking, Housing, andUrban Affairs of the Senate and the Committee on Financial Services of the House ofRepresentatives on its activities, whistleblower complaints, and the response of theCommission to such complaints.


§ 926. Disqualifying Felons and Other ‘‘Bad Actors’’ From Regulation DOfferings.

Not later than 1 year after the date of enactment of this Act, the Commission shallissue rules for the disqualification of offerings and sales of securities made undersection 230.506 of title 17, Code of Federal Regulations, that—

(1) Are substantially similar to the provisions of section 230.262 of title 17, Code ofFederal Regulations, or any successor thereto; and

(2) Disqualify any offering or sale of securities by a person that—

(A) Is subject to a final order of a State securities commission (or an agency orofficer of a State performing like functions), a State authority that supervises or ex-amines banks, savings associations, or credit unions, a State insurance commission (oran agency or officer of a State performing like functions), an appropriate Federalbanking agency, or the National Credit Union Administration, that—

(i) Bars the person from—

(I) Association with an entity regulated by such commission, authority, agency, orofficer;

(II) Engaging in the business of securities, insurance, or banking; or

(III) Engaging in savings association or credit union activities; or

(ii) Constitutes a final order based on a violation of any law or regulation thatprohibits fraudulent, manipulative, or deceptive conduct within the 10-year periodending on the date of the filing of the offer or sale; or

(B) Has been convicted of any felony ormisdemeanor in connection with the purchaseor sale of any security or involving the making of any false filing with the Commission.

§ 929Y. Study on Extraterritorial Private Rights of Action.

(a) In General.—The Securities and Exchange Commission of the United Statesshall solicit public comment and thereafter conduct a study to determine the extent towhich private rights of action under the antifraud provisions of the Securities andExchange Act of 1934 (15 U.S.C. 78u-4) should be extended to cover—

(1) Conduct within the United States that constitutes a significant step in the fur-therance of the violation, even if the securities transaction occurs outside the UnitedStates and involves only foreign investors; and

(2) Conduct occurring outside the United States that has a foreseeable substantialeffect within the United States.

(b) Contents.—The study shall consider and analyze, among other things—

(1) The scope of such a private right of action, including whether it should extend toall private actors or whether it should be more limited to extend just to institutionalinvestors or otherwise;

(2) What implications such a private right of action would have on internationalcomity;

(3) The economic costs and benefits of extending a private right of action fortransnational securities frauds; and

(4) Whether a narrower extraterritorial standard should be adopted.


(c) Report.—A report of the study shall be submitted and recommendations made tothe Committee on Banking, Housing, and Urban Affairs of the Senate and the Com-mittee on Financial Services of the House not later than 18 months after the date ofenactment of this Act.

§ 929Z. GAO Study on Securities Litigation.

(a) Study.—The Comptroller General of the United States shall conduct a study onthe impact of authorizing a private right of action against any person who aids or abetsanother person in violation of the securities laws. To the extent feasible, this study shallinclude—

(1) A review of the role of secondary actors in companies issuance of securities;

(2) The courts interpretation of the scope of liability for secondary actors underFederal securities laws after January 14, 2008; and

(3) The types of lawsuits decided under the Private Securities Litigation Act of1995.

(b) Report.—Not later than 1 year after the date of enactment of this Act, theComptroller General shall submit a report to Congress on the findings of the studyrequired under subsection (a).

§ 931. Findings.

Congress finds the following:

(1) Because of the systemic importance of credit ratings and the reliance placed oncredit ratings by individual and institutional investors and financial regulators, theactivities and performances of credit rating agencies, including nationally recognizedstatistical rating organizations, are matters of national public interest, as credit ratingagencies are central to capital formation, investor confidence, and the efficient per-formance of the United States economy.

(2) Credit rating agencies, including nationally recognized statistical rating orga-nizations, play a critical ‘‘gatekeeper’’ role in the debt market that is functionallysimilar to that of securities analysts, who evaluate the quality of securities in the equitymarket, and auditors, who review the financial statements of firms. Such role justifies asimilar level of public oversight and accountability.

(3) Because credit rating agencies perform evaluative and analytical services onbehalf of clients, much as other financial ‘‘gatekeepers’’ do, the activities of creditrating agencies are fundamentally commercial in character and should be subject to thesame standards of liability and oversight as apply to auditors, securities analysts, andinvestment bankers.

(4) In certain activities, particularly in advising arrangers of structured financialproducts on potential ratings of such products, credit rating agencies face conflicts ofinterest that need to be carefully monitored and that therefore should be addressedexplicitly in legislation in order to give clearer authority to the Securities and ExchangeCommission.

(5) In the recent financial crisis, the ratings on structured financial products haveproven to be inaccurate. This inaccuracy contributed significantly to the misman-agement of risks by financial institutions and investors, which in turn adverselyimpacted the health of the economy in the United States and around the world.Such inaccuracy necessitates increased accountability on the part of credit ratingagencies.


§ 936. Qualification Standards For Credit Rating Analysts.

Not later than 1 year after the date of enactment of this Act, the Commission shallissue rules that are reasonably designed to ensure that any person employed by anationally recognized statistical rating organization to perform credit ratings—

(1) Meets standards of training, experience, and competence necessary to pro-duce accurate ratings for the categories of issuers whose securities the person rates;and

(2) Is tested for knowledge of the credit rating process.

§ 937. Timing of Regulations.

Unless otherwise specifically provided in this subtitle, the Commission shall issuefinal regulations, as required by this subtitle and the amendments made by this subtitle,not later than 1 year after the date of enactment of this Act.

§ 938. Universal Ratings Symbols.

(a) Rulemaking.—The Commission shall require, by rule, each nationally recog-nized statistical rating organization to establish, maintain, and enforce written policiesand procedures that—

(1) Assess the probability that an issuer of a security or money market instrumentwill default, fail to make timely payments, or otherwise not make payments to investorsin accordance with the terms of the security or money market instrument;

(2) Clearly define and disclose the meaning of any symbol used by the nationallyrecognized statistical rating organization to denote a credit rating; and

(3) Apply any symbol described in paragraph (2) in a manner that is consistent forall types of securities and money market instruments for which the symbol is used.

(b) Rule of Construction.—Nothing in this section shall prohibit a nationally rec-ognized statistical rating organization from using distinct sets of symbols to denotecredit ratings for different types of securities or money market instruments.

§ 939. Removal of Statutory References to Credit Ratings.

(a)–(g) [Omitted; paragraphs (a)–(g) amended existing law.]

(h) Study and Report.—

(1) In General.—Commission shall undertake a study on the feasability and de-sirability of—

(A) Standardizing credit ratings terminology, so that all credit rating agencies issuecredit ratings using identical terms;

(B) Standardizing the market stress conditions under which ratings are evaluated;

(C) Requiring a quantitative correspondence between credit ratings and a range ofdefault probabilities and loss expectations under standardized conditions of economicstress; and

(D) Standardizing credit rating terminology across asset classes, so that namedratings correspond to a standard range of default probabilities and expected lossesindependent of asset class and issuing entity.


(2) Report.—Not later than 1 year after the date of enactment of this Act, theCommission shall submit to Congress a report containing the findings of the studyunder paragraph (1) and the recommendations, if any, of the Commission with respectto the study.

§ 939A. Review of Reliance on Ratings.

(a) Agency Review.—Not later than 1 year after the date of the enactment of thissubtitle, each Federal agency shall, to the extent applicable, review—

(1) Any regulation issued by such agency that requires the use of an assessment ofthe credit-worthiness of a security or money market instrument; and

(2) Any references to or requirements in such regulations regarding credit ratings.

(b) Modifications Required.—Each such agency shall modify any such regulationsidentified by the review conducted under subsection (a) to remove any reference to orrequirement of reliance on credit ratings and to substitute in such regulations suchstandard of credit-worthiness as each respective agency shall determine as appropriatefor such regulations. In making such determination, such agencies shall seek to es-tablish, to the extent feasible, uniform standards of credit-worthiness for use by eachsuch agency, taking into account the entities regulated by each such agency and thepurposes for which such entities would rely on such standards of credit-worthiness.

(c) Report.—Upon conclusion of the review required under subsection (a), eachFederal agency shall transmit a report to Congress containing a description of anymodification of any regulation such agency made pursuant to subsection (b).

§ 939B. Elimination of Exemption From Fair Disclosure Rule.

Not later than 90 days after the date of enactment of this subtitle, the SecuritiesExchange Commission shall revise Regulation FD (17 C.F.R. 243.100) to remove fromsuch regulation the exemption for entities whose primary business is the issuance ofcredit ratings (17 C.F.R. 243.100(b)(2)(iii)).

§ 939C. Securities and Exchange Commission Study on Strengthening CreditRating Agency Independence.

(a) Study.—The Commission shall conduct a study of—

(1) The independence of nationally recognized statistical rating organizations; and

(2) How the independence of nationally recognized statistical rating organizationsaffects the ratings issued by the nationally recognized statistical rating organizations.

(b) Subjects For Evaluation.—In conducting the study under subsection (a), theCommission shall evaluate—

(1) The management of conflicts of interest raised by a nationally recognizedstatistical rating organization providing other services, including risk managementadvisory services, ancillary assistance, or consulting services;

(2) The potential impact of rules prohibiting a nationally recognized statisticalrating organization that provides a rating to an issuer from providing other services tothe issuer; and

(3) Any other issue relating to nationally recognized statistical rating organizations,as the Chairman of the Commission determines is appropriate.

§ 939C Dodd-Frank Wall Street Reform and Consumer Protection Act 33

(c) Report.—Not later than 3 years after the date of enactment of this Act, theChairman of the Commission shall submit to the Committee on Banking, Housing, andUrban Affairs of the Senate and the Committee on Financial Services of the House ofRepresentatives a report on the results of the study conducted under subsection (a),including recommendations, if any, for improving the integrity of ratings issued bynationally recognized statistical rating organizations.

§ 939D. Government Accountability Office Study on Alternative BusinessModels.

(a) Study.—The Comptroller General of the United States shall conduct a study onalternative means for compensating nationally recognized statistical rating organiza-tions in order to create incentives for nationally recognized statistical rating organi-zations to provide more accurate credit ratings, including any statutory changes thatwould be required to facilitate the use of an alternative means of compensation.

(b) Report.—Not later than 18 months after the date of enactment of this Act, theComptroller General shall submit to the Committee on Banking, Housing, and UrbanAffairs of the Senate and the Committee on Financial Services of the House ofRepresentatives a report on the results of the study conducted under subsection (a),including recommendations, if any, for providing incentives to credit rating agencies toimprove the credit rating process.

§ 939E. Government Accountability Office Study on the Creation of anIndependent Professional Analyst Organization.

(a) Study.—The Comptroller General of the United States shall conduct a study onthe feasibility and merits of creating an independent professional organization forrating analysts employed by nationally recognized statistical rating organizations thatwould be responsible for—

(1) Establishing independent standards for governing the profession of ratinganalysts;

(2) Establishing a code of ethical conduct; and

(3) Overseeing the profession of rating analysts.

(b) Report.—Not later than 1 year after the date of publication of the rules issued bythe Commission pursuant to section 936, the Comptroller General shall submit to theCommittee on Banking, Housing, and Urban Affairs of the Senate and the Committeeon Financial Services of the House of Representatives a report on the results of thestudy conducted under subsection (a).

§ 939F. Study and Rulemaking on Assigned Credit Ratings.

(a) Definition.—In this section, the term ‘‘structured finance product’’ means anasset-backed security, as defined in section 3(a)(77) of the Securities Exchange Act of1934, as added by section 941, and any structured product based on an asset-backedsecurity, as determined by the Commission, by rule.

(b) Study.—The Commission shall carry out a study of—

(1) The credit rating process for structured finance products and the conflicts ofinterest associated with the issuer-pay and the subscriber-pay models;

(2) The feasibility of establishing a system in which a public or private utility or aself-regulatory organization assigns nationally recognized statistical rating organiza-tions to determine the credit ratings of structured finance products, including—

34 Dodd-Frank Wall Street Reform and Consumer Protection Act § 939D

(A) An assessment of potential mechanisms for determining fees for the nationallyrecognized statistical rating organizations;

(B) Appropriate methods for paying fees to the nationally recognized statisticalrating organizations;

(C) The extent to which the creation of such a system would be viewed as thecreation of moral hazard by the Federal Government; and

(D) Any constitutional or other issues concerning the establishment of such asystem;

(3) The range of metrics that could be used to determine the accuracy of creditratings; and

(4) Alternative means for compensating nationally recognized statistical ratingorganizations that would create incentives for accurate credit ratings.

(c) Report and Recommendation.—Not later than 24 months after the date of en-actment of this Act, the Commission shall submit to the Committee on Banking,Housing, and Urban Affairs of the Senate and the Committee on Financial Services ofthe House of Representatives a report that contains—

(1) The findings of the study required under subsection (b); and

(2) Any recommendations for regulatory or statutory changes that the Commissiondetermines should be made to implement the findings of the study required undersubsection (b).

(d) Rulemaking.—

(1) Rulemaking.—After submission of the report under subsection (c), the Com-mission shall, by rule, as the Commission determines is necessary or appropriate in thepublic interest or for the protection of investors, establish a system for the assignmentof nationally recognized statistical rating organizations to determine the initial creditratings of structured finance products, in a manner that prevents the issuer, sponsor, orunderwriter of the structured finance product from selecting the nationally recognizedstatistical rating organization that will determine the initial credit ratings and monitorsuch credit ratings. In issuing any rule under this paragraph, the Commission shall givethorough consideration to the provisions of section 15E(w) of the Securities ExchangeAct of 1934, as that provision would have been added by section 939D of H.R. 4173(111th Congress), as passed by the Senate on May 20, 2010, and shall implement thesystem described in such section 939D unless the Commission determines that analternative system would better serve the public interest and the protection of investors.

(2) Rule of Construction.—Nothing in this subsection may be construed to limit orsuspend any other rulemaking authority of the Commission.

§ 939H. Sense of Congress.

It is the sense of Congress that the Securities and Exchange Commission shouldexercise the rulemaking authority of the Commission under section 15E(h)(2)(B) of theSecurities Exchange Act of 1934 (15 U.S.C. 78o-7(h)(2)(B)) to prevent improperconflicts of interest arising from employees of nationally recognized statistical ratingorganizations providing services to issuers of securities that are unrelated to the issu-ance of credit ratings, including consulting, advisory, and other services.

§ 939H Dodd-Frank Wall Street Reform and Consumer Protection Act 35

§ 943. Representations and Warranties in Asset-Backed Offerings.

Not later than 180 days after the date of enactment of this Act, the Securities andExchange Commission shall prescribe regulations on the use of representations andwarranties in the market for asset-backed securities (as that term is defined in section3(a)(77) of the Securities Exchange Act of 1934, as added by this subtitle) that—

(1) Require each national recognized statistical rating organization to include in anyreport accompanying a credit rating a description of—

(A) The representations, warranties, and enforcement mechanisms available toinvestors; and

(B) How they differ from the representations, warranties, and enforcement me-chanisms in issuances of similar securities; and

(2) Require any securitizer (as that term is defined in section 15G(a) of the Secu-rities Exchange Act of 1934, as added by this subtitle) to disclose fulfilled and un-fulfilled repurchase requests across all trusts aggregated by the securitizer, so thatinvestors may identify asset originators with clear underwriting deficiencies.

§ 952. Compensation Committee Independence.


(b) Study and Report.—

(1) Study.—The Securities and Exchange Commission shall conduct a study andreview of the use of compensation consultants and the effects of such use.

(2) Report.—Not later than 2 years after the date of the enactment of this Act, theCommission shall submit a report to Congress on the results of the study and reviewrequired by this subsection.

§ 953. Executive Compensation Disclosures.


(b) Additional Disclosure Requirements.—

(1) In General.—The Commission shall amend section 229.402 of title 17, Code ofFederal Regulations, to require each issuer, other than an emerging growth company, asthat term is defined in section 3(a) of the Securities Exchange Act of 1934, to disclosein any filing of the issuer described in section 229.10(a) of title 17, Code of FederalRegulations (or any successor thereto)—

(A) The median of the annual total compensation of all employees of the issuer,except the chief executive officer (or any equivalent position) of the issuer;

(B) The annual total compensation of the chief executive officer (or any equivalentposition) of the issuer; and

(C) The ratio of the amount described in subparagraph (A) to the amount describedin subparagraph (B).

(2) Total Compensation.—For purposes of this subsection, the total compensation ofan employee of an issuer shall be determined in accordance with section 229.402(c)(2)(x)of title 17, Code of Federal Regulations, as in effect on the day before the date ofenactment of this Act.


§ 961. Report and Certification of Internal Supervisory Controls.

(a) Annual Reports and Certification.—Not later than 90 days after the end of eachfiscal year, the Commission shall submit a report to the Committee on Banking,Housing, and Urban Affairs of the Senate and the Committee on Financial Services ofthe House of Representatives on the conduct by the Commission of examinations ofregistered entities, enforcement investigations, and review of corporate financial se-curities filings.

(b) Contents of Reports.—Each report under subsection (a) shall contain—

(1) An assessment, as of the end of the most recent fiscal year, of the effectivenessof—

(A) The internal supervisory controls of the Commission; and

(B) The procedures of the Commission applicable to the staff of the Commissionwho perform examinations of registered entities, enforcement investigations, and re-views of corporate financial securities filings;

(2) A certification that the Commission has adequate internal supervisory controlsto carry out the duties of the Commission described in paragraph (1)(B); and

(3) A summary by the Comptroller General of the United States of the reviewcarried out under subsection (d).

(c) Certification.—

(1) Signature.—The certification under subsection (b)(2) shall be signed by theDirector of the Division of Enforcement, the Director of the Division of CorporationFinance, and the Director of the Office of Compliance Inspections and Examinations(or the head of any successor division or office).

(2) Content of Certification.—Each individual described in paragraph (1) shallcertify that the individual—

(A) Is directly responsible for establishing and maintaining the internal supervisorycontrols of the Division or Office of which the individual is the head;

(B) Is knowledgeable about the internal supervisory controls of the Division orOffice of which the individual is the head;

(C) Has evaluated the effectiveness of the internal supervisory controls during the90-day period ending on the final day of the fiscal year to which the report relates; and

(D) Has disclosed to the Commission any significant deficiencies in the design oroperation of internal supervisory controls that could adversely affect the ability of theDivision or Office to consistently conduct inspections, or investigations, or reviews offilings with professional competence and integrity.

(d) New Director or Acting Director.—Notwithstanding subsection (a), if the Di-rector of the Division of Enforcement, the Director of the Division of Corporate Fi-nance, or the Director of the Office of Compliance Inspections and Examinations hasserved as Director of the Division or Office for less than 90 days on the date on which areport is required to be submitted under subsection (a), the Commission may submit thereport on the date on which the Director has served as Director for 90 days. If there is noDirector of the Division of Enforcement, the Division of Corporate Finance, or theOffice of Compliance Inspections and Examinations, on the date on which a report isrequired to be submitted under subsection (a), the Acting Director of the Division orOffice may make the certification required under subsection (c).


(e) Review By the Comptroller General.—

(1) Report.—The Comptroller General of the United States shall submit to theCommittee on Banking, Housing, and Urban Affairs of the Senate and the Committeeon Financial Services of the House of Representatives a report that contains a review ofthe adequacy and effectiveness of the internal supervisory control structure and pro-cedures described in subsection (b)(1), not less frequently than once every 3 years, at atime to coincide with the publication of the reports of the Commission under thissection.

(2) Authority to Hire Experts.—The Comptroller General of the United States mayhire independent consultants with specialized expertise in any area relevant to theduties of the Comptroller General described in this section, in order to assist theComptroller General in carrying out such duties.

§ 962. Triennial Report on Personnel Management.

(a) Triennial Report Required.—Once every 3 years, the Comptroller General of theUnited States shall submit a report to the Committee on Banking, Housing, and UrbanAffairs of the Senate and the Committee on Financial Services of the House of Re-presentatives on the quality of personnel management by the Commission.

(b) Contents of Report.—Each report under subsection (a) shall include—

(1) An evaluation of—

(A) The effectiveness of supervisors in using the skills, talents, and motivation ofthe employees of the Commission to achieve the goals of the Commission;

(B) The criteria for promoting employees of the Commission to supervisory posi-tions;

(C) The fairness of the application of the promotion criteria to the decisions of theCommission;

(D) The competence of the professional staff of the Commission;

(E) The efficiency of communication between the units of the Commission re-garding the work of the Commission (including communication between divisions andbetween subunits of a division) and the efforts by the Commission to promote suchcommunication;

(F) The turnover within subunits of the Commission, including the consideration ofsupervisors whose subordinates have an unusually high rate of turnover;

(G) Whether there are excessive numbers of low-level, mid-level, or senior-levelmanagers;

(H) Any initiatives of the Commission that increase the competence of the staff ofthe Commission;

(I) The actions taken by the Commission regarding employees of the Commissionwho have failed to perform their duties and circumstances under which the Commis-sion has issued to employees a notice of termination; and

(J) Such other factors relating to the management of the Commission as theComptroller General determines are appropriate;

(2) An evaluation of any improvements made with respect to the areas described inparagraph (1) since the date of submission of the previous report; and


(3) Recommendations for how the Commission can use the human resources of theCommission more effectively and efficiently to carry out the mission of the Com-mission.

(c) Consultation.—In preparing the report under subsection (a), the ComptrollerGeneral shall consult with current employees of the Commission, retired employeesand other former employees of the Commission, the Inspector General of the Com-mission, persons that have business before the Commission, any union representing theemployees of the Commission, private management consultants, academics, and anyother source that the Comptroller General deems appropriate.

(d) Report By Commission.—Not later than 90 days after the date on which theComptroller General submits each report under subsection (a), the Commission shallsubmit to the Committee on Banking, Housing, and Urban Affairs of the Senate and theCommittee on Financial Services of the House of Representatives a report describingthe actions taken by the Commission in response to the recommendations contained inthe report under subsection (a).

(e) Reimbursements For Cost of Reports.—

(1) Reimbursements Required.—The Commission shall reimburse the GovernmentAccountability Office for the full cost of making the reports under this section, as billedtherefore by the Comptroller General.

(2) Crediting and Use of Reimbursements.—Such reimbursements shall—

(A) Be credited to the appropriation account ‘‘Salaries and Expenses, GovernmentAccountability Office’’ current when the payment is received; and

(B) Remain available until expended.

(f) Authority to Hire Experts.—The Comptroller General of the United States mayhire independent consultants with specialized expertise in any area relevant to theduties of the Comptroller General described in this section, in order to assist theComptroller General in carrying out such duties.

§ 963. Annual Financial Controls Audit.

(a) Reports of Commission.—

(1) Annual Reports Required.—Not later than 6 months after the end of each fiscalyear, the Commission shall publish and submit to Congress a report that—

(A) Describes the responsibility of the management of the Commission for estab-lishing and maintaining an adequate internal control structure and procedures for fi-nancial reporting; and

(B) Contains an assessment of the effectiveness of the internal control structure andprocedures for financial reporting of the Commission during that fiscal year.

(2) Attestation.—The reports required under paragraph (1) shall be attested to by theChairman and chief financial officer of the Commission.

(b) Report By Comptroller General.—

(1) Report Required.—Not later than 6 months after the end of the first fiscal yearafter the date of enactment of this Act, the Comptroller General of the United Statesshall submit a report to Congress that assesses—

(A) The effectiveness of the internal control structure and procedures of theCommission for financial reporting; and


(B) The assessment of the Commission under subsection (a)(1)(B).

(2) Attestation.—The Comptroller General shall attest to, and report on, the as-sessment made by the Commission under subsection (a).

(c) Reimbursements For Cost of Reports.—

(1) Reimbursements Required.—The Commission shall reimburse the GovernmentAccountability Office for the full cost of making the reports under subsection (b), asbilled therefor by the Comptroller General.




§ 964. Report on Oversight of National Securities Associations.

(a) Report Required.—Not later than 2 years after the date of enactment of this Act,and every 3 years thereafter, the Comptroller General of the United States shall submitto the Committee on Banking, Housing, and Urban Affairs of the Senate and theCommittee on Financial Services of the House of Representatives a report that includesan evaluation of the oversight by the Commission of national securities associationsregistered under section 15A of the Securities Exchange Act of 1934 (15 U.S.C. 78o-3)with respect to—

(1) The governance of such national securities associations, including the identi-fication and management of conflicts of interest by such national securities associa-tions, together with an analysis of the impact of any conflicts of interest on theregulatory enforcement or rulemaking by such national securities associations;

(2) The examinations carried out by the national securities associations, includingthe expertise of the examiners;

(3) The executive compensation practices of such national securities associations;

(4) The arbitration services provided by the national securities associations;

(5) The review performed by national securities associations of advertising by themembers of the national securities associations;

(6) The cooperation with and assistance to State securities administrators by thenational securities associations to promote investor protection;

(7) How the funding of national securities associations is used to support themission of the national securities associations, including—

(A) The methods of funding;

(B) The sufficiency of funds;

(C) How funds are invested by the national securities association pending use; and

(D) The impact of the methods, sufficiency, and investment of funds on regulatoryenforcement by the national securities associations;

(8) The policies regarding the employment of former employees of national secu-rities associations by regulated entities;


(9) The ongoing effectiveness of the rules of the national securities associations inachieving the goals of the rules;

(10) The transparency of governance and activities of the national securities as-sociations; and

(11) Any other issue that has an impact, as determined by the Comptroller General,on the effectiveness of such national securities associations in performing their missionand in dealing fairly with investors and members;

(b) Reimbursements For Cost of Reports.—

(1) Reimbursements Required.—The Commission shall reimburse the GovernmentAccountability Office for the full cost of making the reports under subsection (a), asbilled therefor by the Comptroller General.




§ 967. Commission Organizational Study and Reform.

(a) Study Required.—

(1) In General.—Not later than the end of the 90-day period beginning on the dateof the enactment of this subtitle, the Securities and Exchange Commission (hereinafterin this section referred to as the ‘‘SEC’’) shall hire an independent consultant of highcaliber and with expertise in organizational restructuring and the operations of capitalmarkets to examine the internal operations, structure, funding, and the need for com-prehensive reform of the SEC, as well as the SEC’s relationship with and the relianceon self-regulatory organizations and other entities relevant to the regulation of secu-rities and the protection of securities investors that are under the SEC’s oversight.

(2) Specific Areas For Study.—The study required under paragraph (1) shall, at aminimum, include the study of—

(A) The possible elimination of unnecessary or redundant units at the SEC;

(B) Improving communications between SEC offices and divisions;

(C) The need to put in place a clear chain-of-command structure, particularly forenforcement examinations and compliance inspections;

(D) The effect of high-frequency trading and other technological advances on themarket and what the SEC requires to monitor the effect of such trading and advances onthe market;

(E) The SEC’s hiring authorities, workplace policies, and personal practices, in-cluding—

(i) Whether there is a need to further streamline hiring authorities for those who arenot lawyers, accountants, compliance examiners, or economists;

(ii) Whether there is a need for further pay reforms;

(iii) The diversity of skill sets of SEC employees and whether the present skill setdiversity efficiently and effectively fosters the SEC’s mission of investor protection;and


(iv) The application of civil service laws by the SEC;

(F) Whether the SEC’s oversight and reliance on self-regulatory organizationspromotes efficient and effective governance for the securities markets; and

(G) Whether adjusting the SEC’s reliance on self-regulatory organizations is nec-essary to promote more efficient and effective governance for the securities markets.

(b) Consultant Report.—Not later than the end of the 150-day period after beingretained, the independent consultant hired pursuant to subsection (a)(1) shall issue areport to the SEC and the Congress containing—

(1) A detailed description of any findings and conclusions made while carrying outthe study required under subsection (a)(1); and

(2) Recommendations for legislative, regulatory, or administrative action that theconsultant determines appropriate to enable the SEC and other entities on which theconsultant reports to perform their statutorily or otherwise mandated missions.

(c) SEC Report.—Not later than the end of the 6-month period beginning on the datethe consultant issues the report under subsection (b), and every 6-months thereafterduring the 2-year period following the date on which the consultant issues such report,the SEC shall issue a report to the Committee on Financial Services of the House ofRepresentatives and the Committee on Banking, Housing, and Urban Affairs of theSenate describing the SEC’s implementation of the regulatory and administrative re-commendations contained in the consultant’s report.

§ 968. Study on SEC Revolving Door.

(a) Government Accountability Office Study.—The Comptroller General of theUnited States shall conduct a study that will—

(1) Review the number of employees who leave the Securities and ExchangeCommission to work for financial institutions regulated by such Commission;

(2) Determine how many employees who leave the Securities and ExchangeCommission worked on cases that involved financial institutions regulated by suchCommission;

(3) Review the length of time employees work for the Securities and ExchangeCommission before leaving to be employed by financial institutions regulated by suchCommission;

(4) Review existing internal controls and make recommendations on strengtheningsuch controls to ensure that employees of the Securities and Exchange Commissionwho are later employed by financial institutions did not assist such institutions inviolating any rules or regulations of the Commission during the course of their em-ployment with such Commission;

(5) Determine if greater post-employment restrictions are necessary to preventemployees of the Securities and Exchange Commission from being employed by fi-nancial institutions after employment with such Commission;

(6) Determine if the volume of employees of the Securities and Exchange Com-mission who are later employed by financial institutions has led to inefficiencies inenforcement;

(7) Determine if employees of the Securities and Exchange Commission who arelater employed by financial institutions assisted such institutions in circumventingFederal rules and regulations while employed by such Commission;


(8) Review any information that may address the volume of employees of theSecurities and Exchange Commission who are later employed by financial institutions,and make recommendations to Congress; and

(9) Review other additional issues as may be raised during the course of the studyconducted under this subsection.

(b) Report.—Not later than 1 year after the date of the enactment of this subtitle, theComptroller General of the United States shall submit to the Committee on FinancialServices of the House of Representatives and the Committee on Banking, Housing,and Urban Affairs of the Senate a report on the results of the study required bysubsection (a).

§ 971. Proxy Access.


(b) Regulations.—The Commission may issue rules permitting the use by a share-holder of proxy solicitation materials supplied by an issuer of securities for the purposeof nominating individuals to membership on the board of directors of the issuer, undersuch terms and conditions as the Commission determines are in the interests ofshareholders and for the protection of investors.

(c) Exemptions.—The Commission may, by rule or order, exempt an issuer or classof issuers from the requirement made by this section or an amendment made by thissection. In determining whether to make an exemption under this subsection, theCommission shall take into account, among other considerations, whether the re-quirement in the amendment made by subsection (a) disproportionately burdens smallissuers.

§ 976. Government Accountability Office Study of Increased Disclosure toInvestors.

(a) Study.—The Comptroller General of the United States shall conduct a study andreview of the disclosure required to be made by issuers of municipal securities.

(b) Subjects For Evaluation.—In conducting the study under subsection (a), theComptroller General of the United States shall—

(1) Broadly describe—

(A) The size of the municipal securities markets and the issuers and investors; and

(B) The disclosures provided by issuers to investors;

(2) Compare the amount, frequency, and quality of disclosures that issuers ofmunicipal securities are required by law to provide for the benefit of municipal se-curities holders, including the amount of and frequency of disclosures actually pro-vided by issuers of municipal securities, with the amount of and frequency ofdisclosures that issuers of corporate securities provide for the benefit of corporatesecurities holders, taking into account the differences between issuers of municipalsecurities and issuers of corporate securities;

(3) Evaluate the costs and benefits to various types of issuers of municipal securitiesof requiring issuers of municipal bonds to provide additional financial disclosures forthe benefit of investors;

(4) Evaluate the potential benefit to investors from additional financial disclosuresby issuers of municipal bonds; and


(5) Make recommendations relating to disclosure requirements for municipal is-suers, including the advisability of the repeal or retention of section 15B(d) of theSecurities Exchange Act of 1934 (15 U.S.C. 78o-4(d)) (commonly known as the‘‘Tower Amendment’’).

(c) Report.—Not later than 24 months after the date of enactment of this Act, theComptroller General of the United States shall submit a report to Congress on theresults of the study conducted under subsection (a), including recommendations forhow to improve disclosure by issuers of municipal securities.

§ 977. Government Accountability Office Study on the Municipal SecuritiesMarkets.

(a) Study.—The Comptroller General of the United States shall conduct a study ofthe municipal securities markets.

(b) Report.—Not later than 18 months after the date of enactment of this Act, theComptroller General of the United States shall submit a report to the Committee onBanking, Housing, and Urban Affairs of the Senate, and the Committee on FinancialServices of the House of Representatives, with copies to the Special Committee onAging of the Senate and the Commission, on the results of the study conducted undersubsection (a), including—

(1) An analysis of the mechanisms for trading, quality of trade executions, markettransparency, trade reporting, price discovery, settlement clearing, and credit en-hancements;

(2) The needs of the markets and investors and the impact of recent innovations;

(3) Recommendations for how to improve the transparency, efficiency, fairness, andliquidity of trading in the municipal securities markets, including with reference toitems listed in paragraph (1); and

(4) Potential uses of derivatives in the municipal securities markets.

(c) Responses.—Not later than 180 days after receipt of the report required undersubsection (b), the Commission shall submit a response to the Committee on Banking,Housing, and Urban Affairs of the Senate, and the Committee on Financial Services ofthe House of Representatives, with a copy to the Special Committee on Aging of theSenate, stating the actions the Commission has taken in response to the re-commendations contained in such report.

§ 978. Funding For Governmental Accounting Standards Board.


(b) Study of Funding For Governmental Accounting Standards Board.—

(1) Study.—The Comptroller General of the United States shall conduct a study thatevaluates—

(A) The role and importance of the Governmental Accounting Standards Board inthe municipal securities markets; and

(B) The manner and the level at which the Governmental Accounting StandardsBoard has been funded.

(2) Consultation.—In conducting the study required under paragraph (1), theComptroller General shall consult with the principal organizations representing Stategovernors, legislators, local elected officials, and State and local finance officers.


(3) Report.—Not later than 180 days after the date of enactment of this Act, theComptroller General shall submit to the Committee on Banking, Housing, andUrban Affairs of the Senate and the Committee on Financial Services of the House ofRepresentatives a report on the study required under paragraph (1).

§ 979. Commission Office of Municipal Securities.

(a) In General.—There shall be in the Commission an Office of Municipal Secu-rities, which shall—

(1) Administer the rules of the Commission with respect to the practices of mu-nicipal securities brokers and dealers, municipal securities advisors, municipal secu-rities investors, and municipal securities issuers; and

(2) Coordinate with the Municipal Securities Rulemaking Board for rulemaking andenforcement actions as required by law.

(b) Director of the Office.—The head of the Office of Municipal Securities shall bethe Director, who shall report to the Chairman.

(c) Staffing.—

(1) In General.—The Office of Municipal Securities shall be staffed sufficiently tocarry out the requirements of this section.

(2) Requirement.—The staff of the Office of Municipal Securities shall includeindividuals with knowledge of and expertise in municipal finance.

§ 984. Loan or Borrowing of Securities.


(b) Rulemaking Required.—Not later than 2 years after the date of enactment of thisAct, the Commission shall promulgate rules that are designed to increase the trans-parency of information available to brokers, dealers, and investors, with respect to theloan or borrowing of securities.

§ 989F. GAO Study of Person to Person Lending.

(a) Study.—

(1) In General.—The Comptroller General of the United States shall conduct astudy of person to person lending to determine the optimal Federal regulatory structure.

(2) Consultation.—In conducting the study required under paragraph (1), theComptroller General shall consult with Federal banking agencies, the Commission,consumer groups, outside experts, and the person to person lending industry.

(3) Content of Study.—The study required under paragraph (1) shall include anexamination of—

(A) The regulatory structure as it exists on the date of enactment of this Act, asdetermined by the Commission, with particular attention to—

(i) The application of the Securities Act of 1933 to person to person lending plat-forms;

(ii) The posting of consumer loan information on the EDGAR database of theCommission; and

§ 989F Dodd-Frank Wall Street Reform and Consumer Protection Act 45

(iii) The treatment of privately held person to person lending platforms as publiccompanies;

(B) The State and other Federal regulators responsible for the oversight and regu-lation of person to person lending markets;

(C) Any Federal, State, or local government or private studies of person to personlending completed or in progress on the date of enactment of this Act;

(D) Consumer privacy and data protections, minimum credit standards, anti-moneylaundering and risk management in the regulatory structure as it exists on the date ofenactment of this Act, and whether additional or alternative safeguards are needed; and

(E) The uses of person to person lending.

(b) Report.—

(1) In General.—Not later than 1 year after the date of enactment of this Act, theComptroller General shall submit a report on the study required under subsection (a) tothe Committee on Banking, Housing, and Urban Affairs of the Senate and the Com-mittee on Financial Services of the House of Representatives.

(2) Content of Report.—The report required under paragraph (1) shall includealternative regulatory options, including—

(A) The involvement of other Federal agencies; and

(B) Alternative approaches by the Commission and recommendations on whetherthe alternative approaches are effective.

§ 989G. Exemption For Nonaccelerated Filers.


(b) Study.—The Securities and Exchange Commission shall conduct a study todetermine how the Commission could reduce the burden of complying with section404(b) of the Sarbanes-Oxley Act of 2002 for companies whose market capitalizationis between $75,000,000 and $250,000,000 for the relevant reporting period whilemaintaining investor protections for such companies. The study shall also considerwhether any such methods of reducing the compliance burden or a complete exemptionfor such companies from compliance with such section would encourage companies tolist on exchanges in the United States in their initial public offerings. Not later than 9months after the date of the enactment of this subtitle, the Commission shall transmit areport of such study to Congress.

§ 989H. Corrective Responses By Heads of Certain Establishments toDeficiencies Identified By Inspectors General.

The Chairman of the Board of Governors of the Federal Reserve System, theChairman of the Commodity Futures Trading Commission, the Chairman of theNational Credit Union Administration, the Director of the Pension Benefit GuarantyCorporation, and the Chairman of the Securities and Exchange Commission shalleach—

(1) Take action to address deficiencies identified by a report or investigation of theInspector General of the establishment concerned; or

(2) Certify to both Houses of Congress that no action is necessary or appropriate inconnection with a deficiency described in paragraph (1).

46 Dodd-Frank Wall Street Reform and Consumer Protection Act § 989G

§ 989I. GAO Study Regarding Exemption For Smaller Issuers.

(a) Study Regarding Exemption For Smaller Issuers.—The Comptroller General ofthe United States shall carry out a study on the impact of the amendments made by thisAct to section 404(b) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262(b)), whichshall include an analysis of—

(1) Whether issuers that are exempt from such section 404(b) have fewer or morerestatements of published accounting statements than issuers that are required tocomply with such section 404(b);

(2) The cost of capital for issuers that are exempt from such section 404(b)compared to the cost of capital for issuers that are required to comply with such section404(b);

(3) Whether there is any difference in the confidence of investors in the integrity offinancial statements of issuers that comply with such section 404(b) and issuers that areexempt from compliance with such section 404(b);

(4) Whether issuers that do not receive the attestation for internal controls requiredunder such section 404(b) should be required to disclose the lack of such attestation toinvestors; and

(5) The costs and benefits to issuers that are exempt from such section 404(b) thatvoluntarily have obtained the attestation of an independent auditor.

(b) Report.—Not later than 3 years after the date of enactment of this Act, theComptroller General shall submit to the Committee on Banking, Housing, and UrbanAffairs of the Senate and the Committee on Financial Services of the House ofRepresentatives a report on the results of the study required under subsection (a).

§ 989J. Further Promoting the Adoption of the NAIC Model Regulations thatEnhance Protection of Seniors and Other Consumers.

(a) In General.—The Commission shall treat as exempt securities described undersection 3(a)(8) of the Securities Act of 1933 (15 U.S.C. 77c(a)(8)) any insurance orendowment policy or annuity contract or optional annuity contract—

(1) The value of which does not vary according to the performance of a separateaccount;

(2) That—

(A) Satisfies standard nonforfeiture laws or similar requirements of the applicableState at the time of issue; or

(B) In the absence of applicable standard nonforfeiture laws or requirements, sa-tisfies the Model Standard Nonforfeiture Law for Life Insurance or Model StandardNonforfeiture Law for Individual Deferred Annuities, or any successor model law, aspublished by the National Association of Insurance Commissioners; and

(3) That is issued—

(A) On and after June 16, 2013, in a State, or issued by an insurance company that isdomiciled in a State, that—

(i) Adopts rules that govern suitability requirements in the sale of an insurance orendowment policy or annuity contract or optional annuity contract, which shall sub-stantially meet or exceed the minimum requirements established by the Suitability in

§ 989J Dodd-Frank Wall Street Reform and Consumer Protection Act 47

Annuity Transactions Model Regulation adopted by the National Association of In-surance Commissioners in March 2010; and

(ii) Adopts rules that substantially meet or exceed the minimum requirements of anysuccessor modifications to the model regulations described in subparagraph (A) within5 years of the adoption by the Association of any further successors thereto; or

(B) By an insurance company that adopts and implements practices on a nationwidebasis for the sale of any insurance or endowment policy or annuity contract or optionalannuity contract that meet or exceed the minimum requirements established by theNational Association of Insurance Commissioners Suitability in Annuity TransactionsModel Regulation (Model 275), and any successor thereto, and is therefore subject toexamination by the State of domicile of the insurance company, or by any other Statewhere the insurance company conducts sales of such products, for the purpose ofmonitoring compliance under this section.

(b) Rule of Construction.—Nothing in this section shall be construed to affectwhether any insurance or endowment policy or annuity contract or optional annuitycontract that is not described in this section is or is not an exempt security under section3(a)(8) of the Securities Act of 1933 (15 U.S.C. 77c(a)(8)).


§ 1502. Conflict Minerals.

(a) Sense of Congress on Exploitation and Trade of Conflict Minerals Originatingin the Democratic Republic of the Congo.—It is the sense of Congress that the ex-ploitation and trade of conflict minerals originating in the Democratic Republic of theCongo is helping to finance conflict characterized by extreme levels of violence in theeastern Democratic Republic of the Congo, particularly sexual- and gender-based vi-olence, and contributing to an emergency humanitarian situation therein, warrantingthe provisions of section 13(p) of the Securities Exchange Act of 1934, as added bysubsection (b).

(b) [Omitted; paragraph (b) amended existing law.]

(c) Strategy and Map to Address Linkages Between Conflict Minerals and ArmedGroups.—

(1) Strategy.—

(A) In General.—Not later than 180 days after the date of the enactment of this Act,the Secretary of State, in consultation with the Administrator of the United StatesAgency for International Development, shall submit to the appropriate congressionalcommittees a strategy to address the linkages between human rights abuses, armedgroups, mining of conflict minerals, and commercial products.

(B) Contents.—The strategy required by subparagraph (A) shall include the fol-lowing:

(i) A plan to promote peace and security in the Democratic Republic of the Congoby supporting efforts of the Government of the Democratic Republic of the Congo,including the Ministry of Mines and other relevant agencies, adjoining countries, andthe international community, in particular the United Nations Group of Experts on theDemocratic Republic of Congo, to—

(I) Monitor and stop commercial activities involving the natural resources of theDemocratic Republic of the Congo that contribute to the activities of armed groups andhuman rights violations in the Democratic Republic of the Congo; and


(II) Develop stronger governance and economic institutions that can facilitate andimprove transparency in the cross-border trade involving the natural resources of theDemocratic Republic of the Congo to reduce exploitation by armed groups and pro-mote local and regional development.

(ii) A plan to provide guidance to commercial entities seeking to exercise duediligence on and formalize the origin and chain of custody of conflict minerals usedin their products and on their suppliers to ensure that conflict minerals used in theproducts of such suppliers do not directly or indirectly finance armed conflict or resultin labor or human rights violations.

(iii) A description of punitive measures that could be taken against individuals orentities whose commercial activities are supporting armed groups and human rightsviolations in the Democratic Republic of the Congo.

(2) Map.—

(A) In General.—Not later than 180 days after the date of the enactment of this Act,the Secretary of State shall, in accordance with the recommendation of the UnitedNations Group of Experts on the Democratic Republic of the Congo in their December2008 report—

(i) Produce a map of mineral-rich zones, trade routes, and areas under the control ofarmed groups in the Democratic Republic of the Congo and adjoining countries basedon data from multiple sources, including—

(I) The United Nations Group of Experts on the Democratic Republic of the Congo;

(II) The Government of the Democratic Republic of the Congo, the governmentsof adjoining countries, and the governments of other Member States of the UnitedNations; and

(III) Local and international nongovernmental organizations;

(ii) Make such map available to the public; and

(iii) Provide to the appropriate congressional committees an explanatory note de-scribing the sources of information from which such map is based and the identifica-tion, where possible, of the armed groups or other forces in control of the minesdepicted.

(B) Designation.—The map required under subparagraph (A) shall be known as the‘‘Conflict Minerals Map’’, and mines located in areas under the control of armedgroups in the Democratic Republic of the Congo and adjoining countries, as depictedon such Conflict Minerals Map, shall be known as ‘‘Conflict Zone Mines’’.

(C) Updates.—The Secretary of State shall update the map required under sub-paragraph (A) not less frequently than once every 180 days until the date on which thedisclosure requirements under paragraph (1) of section 13(p) of the Securities Ex-change Act of 1934, as added by subsection (b), terminate in accordance with theprovisions of paragraph (4) of such section 13(p).

(D) Publication in Federal Register.—The Secretary of State shall add minerals tothe list of minerals in the definition of conflict minerals under section 1502, as ap-propriate. The Secretary shall publish in the Federal Register notice of intent to declarea mineral as a conflict mineral included in such definition not later than one year beforesuch declaration.


(d) Reports.—

(1) Baseline Report.—Not later than 1 year after the date of the enactment of thisAct and annually thereafter until the termination of the disclosure requirements undersection 13(p) of the Securities Exchange Act of 1934, the Comptroller General of theUnited States shall submit to appropriate congressional committees a report that in-cludes an assessment of the rate of sexual- and gender-based violence in war-torn areasof the Democratic Republic of the Congo and adjoining countries.

(2) Regular Report on Effectiveness.—Not later than 2 years after the date of theenactment of this Act and annually thereafter, the Comptroller General of the UnitedStates shall submit to the appropriate congressional committees a report that includesthe following:

(A) An assessment of the effectiveness of section 13(p) of the Securities ExchangeAct of 1934, as added by subsection (b), in promoting peace and security in theDemocratic Republic of the Congo and adjoining countries.

(B) A description of issues encountered by the Securities and Exchange Commis-sion in carrying out the provisions of such section 13(p).

(C) (i) A general review of persons described in clause (ii) and whether informationis publicly available about—

(I) The use of conflict minerals by such persons; and

(II) Whether such conflict minerals originate from the Democratic Republic of theCongo or an adjoining country.

(ii) A person is described in this clause if—

(I) The person is not required to file reports with the Securities and ExchangeCommission pursuant to section 13(p)(1)(A) of the Securities Exchange Act of 1934, asadded by subsection (b); and

(II) Conflict minerals are necessary to the functionality or production of a productmanufactured by such person.

(3) Report on Private Sector Auditing.—Not later than 30 months after the dateof the enactment of this Act, and annually thereafter, the Secretary of Commerceshall submit to the appropriate congressional committees a report that includes thefollowing:

(A) An assessment of the accuracy of the independent private sector audits andother due diligence processes described under section 13(p) of the Securities ExchangeAct of 1934.

(B) Recommendations for the processes used to carry out such audits, includingways to—

(i) Improve the accuracy of such audits; and

(ii) Establish standards of best practices.

(C) A listing of all known conflict mineral processing facilities worldwide.

(e) Definitions.—For purposes of this section:

(1) Adjoining Country.—The term ‘‘adjoining country’’, with respect to theDemocratic Republic of the Congo, means a country that shares an internationallyrecognized border with the Democratic Republic of the Congo.


(2) Appropriate Congressional Committees.—The term ‘‘appropriate congressionalcommittees’’ means—

(A) The Committee on Appropriations, the Committee on Foreign Affairs, theCommittee onWays andMeans, and the Committee on Financial Services of the Houseof Representatives; and

(B) The Committee on Appropriations, the Committee on Foreign Relations, theCommittee on Finance, and the Committee on Banking, Housing, and Urban Affairs ofthe Senate.

(3) Armed Group.—The term ‘‘armed group’’ means an armed group that is iden-tified as perpetrators of serious human rights abuses in the annual Country Reports onHuman Rights Practices under sections 116(d) and 502B(b) of the Foreign AssistanceAct of 1961 (22 U.S.C. 2151n(d) and 2304(b)) relating to the Democratic Republic ofthe Congo or an adjoining country.

(4) Conflict Mineral.—The term ‘‘conflict mineral’’ means—

(A) columbite-tantalite (coltan), cassiterite, gold, wolframite, or their derivatives; or

(B) Any other mineral or its derivatives determined by the Secretary of State to befinancing conflict in the Democratic Republic of the Congo or an adjoining country.

(5) Under the Control of Armed Groups.—The term ‘‘under the control of armedgroups’’ means areas within the Democratic Republic of the Congo or adjoiningcountries in which armed groups—

(A) Physically control mines or force labor of civilians to mine, transport, or sellconflict minerals;

(B) Tax, extort, or control any part of trade routes for conflict minerals, includingthe entire trade route from a Conflict Zone Mine to the point of export from theDemocratic Republic of the Congo or an adjoining country; or

(C) Tax, extort, or control trading facilities, in whole or in part, including the pointof export from the Democratic Republic of the Congo or an adjoining country.

§ 1503. Reporting Requirements Regarding Coal or Other Mine Safety.

(a) Reporting Mine Safety Information.—Each issuer that is required to file reportspursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C.78m, 78o) and that is an operator, or that has a subsidiary that is an operator, of a coal orother mine shall include, in each periodic report filed with the Commission under thesecurities laws on or after the date of enactment of this Act, the following informationfor the time period covered by such report:

(1) For each coal or other mine of which the issuer or a subsidiary of the issuer is anoperator—

(A) The total number of violations of mandatory health or safety standards thatcould significantly and substantially contribute to the cause and effect of a coal or othermine safety or health hazard under section 104 of the Federal Mine Safety and HealthAct of 1977 (30 U.S.C. 814) for which the operator received a citation from the MineSafety and Health Administration;

(B) The total number of orders issued under section 104(b) of such Act (30 U.S.C.814(b));


(C) The total number of citations and orders for unwarrantable failure of the mineoperator to comply with mandatory health or safety standards under section 104(d) ofsuch Act (30 U.S.C. 814(d));

(D) The total number of flagrant violations under section 110(b)(2) of such Act (30U.S.C. 820(b)(2));

(E) The total number of imminent danger orders issued under section 107(a) of suchAct (30 U.S.C. 817(a));

(F) The total dollar value of proposed assessments from the Mine Safety and HealthAdministration under such Act (30 U.S.C. 801 et seq.); and

(G) The total number of mining-related fatalities.

(2) A list of such coal or other mines, of which the issuer or a subsidiary of the issueris an operator, that receive written notice from the Mine Safety and Health Adminis-tration of—

(A) A pattern of violations of mandatory health or safety standards that are of suchnature as could have significantly and substantially contributed to the cause and effectof coal or other mine health or safety hazards under section 104(e) of such Act (30U.S.C. 814(e)); or

(B) The potential to have such a pattern.

(3) Any pending legal action before the Federal Mine Safety and Health ReviewCommission involving such coal or other mine.

(b) Reporting Shutdowns and Patterns of Violations.—Beginning on and after thedate of enactment of this Act, each issuer that is an operator, or that has a subsidiarythat is an operator, of a coal or other mine shall file a current report with theCommission on Form 8-K (or any successor form) disclosing the following regardingeach coal or other mine of which the issuer or subsidiary is an operator:

(1) The receipt of an imminent danger order issued under section 107(a) of theFederal Mine Safety and Health Act of 1977 (30 U.S.C. 817(a)).

(2) The receipt of written notice from the Mine Safety and Health Administrationthat the coal or other mine has—

(A) A pattern of violations of mandatory health or safety standards that are of suchnature as could have significantly and substantially contributed to the cause and effectof coal or other mine health or safety hazards under section 104(e) of such Act (30U.S.C. 814(e)); or

(B) The potential to have such a pattern.

(c) Rule of Construction.—Nothing in this section shall be construed to affect anyobligation of a person to make a disclosure under any other applicable law in effectbefore, on, or after the date of enactment of this Act.

(d) Commission Authority.—

(1) Enforcement.—A violation by any person of this section, or any rule or regu-lation of the Commission issued under this section, shall be treated for all purposes inthe same manner as a violation of the Securities Exchange Act of 1934 (15 U.S.C. 78aet seq.) or the rules and regulations issued thereunder, consistent with the provisions ofthis section, and any such person shall be subject to the same penalties, and to the sameextent, as for a violation of such Act or the rules or regulations issued thereunder.


(2) Rules and Regulations.—The Commission is authorized to issue such rules orregulations as are necessary or appropriate for the protection of investors and to carryout the purposes of this section.

(e) Definitions.—In this section—

(1) The terms ‘‘issuer’’ and ‘‘securities laws’’ have the meaning given the terms insection 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c);

(2) The term ‘‘coal or other mine’’ means a coal or other mine, as defined in section3 of the Federal Mine Safety and Health Act of 1977 (30 U.S.C. 802), that is subject tothe provisions of such Act (30 U.S.C. 801 et seq.); and

(3) The term ‘‘operator’’ has the meaning given the term in section 3 of the FederalMine Safety and Health Act of 1977 (30 U.S.C. 802).

(f) Effective Date.—This section shall take effect on the day that is 30 days after thedate of enactment of this Act.


Documents

Dodd-Frank Wall Street Reform and Consumer Protection Act · DODD-FRANK WALL STREET REFORM AND CONSUMER PROTECTION ACT (Pub. L. No. 111-203, 124 Stat. 1376) The following Table cross-references