H. Rept. 115-886 - NATIONAL SENIOR INVESTOR INITIATIVE ACT OF 2018115th Congress (2017-2018)
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115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 115-886
======================================================================
NATIONAL SENIOR INVESTOR INITIATIVE ACT OF 2018
_______
August 3, 2018.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Hensarling, from the Committee on Financial Services, submitted the
following
R E P O R T
[To accompany H.R. 6323]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 6323) to create an interdivisional taskforce at
the Securities and Exchange Commission for senior investors,
having considered the same, report favorably thereon with an
amendment and recommend that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``National Senior Investor Initiative
Act of 2018'' or the ``Senior Security Act of 2018''.
SEC. 2. SENIOR INVESTOR TASKFORCE.
Section 4 of the Securities Exchange Act of 1934 (15 U.S.C. 78d) is
amended by adding at the end the following:
``(k) Senior Investor Taskforce.--
``(1) Establishment.--There is established within the
Commission the Senior Investor Taskforce (in this subsection
referred to as the `Taskforce').
``(2) Director of the taskforce.--The head of the Taskforce
shall be the Director, who shall--
``(A) report directly to the Chairman; and
``(B) be appointed by the Chairman, in consultation
with the Commission, from among individuals--
``(i) currently employed by the Commission or
from outside of the Commission; and
``(ii) having experience in advocating for
the interests of senior investors.
``(3) Staffing.--The Chairman shall ensure that--
``(A) the Taskforce is staffed sufficiently to carry
out fully the requirements of this subsection; and
``(B) such staff shall include individuals from the
Division of Enforcement, Office of Compliance
Inspections and Examinations, and Office of Investor
Education and Advocacy.
``(4) Minimizing duplication of efforts.--In organizing and
staffing the Taskforce, the Chairman shall take such actions as
may be necessary to minimize the duplication of efforts within
the divisions and offices described under paragraph (3)(B) and
any other divisions, offices, or taskforces of the Commission.
``(5) Functions of the taskforce.--The Taskforce shall--
``(A) identify challenges that senior investors
encounter, including problems associated with financial
exploitation and cognitive decline;
``(B) identify areas in which senior investors would
benefit from changes in the regulations of the
Commission or the rules of self-regulatory
organizations;
``(C) coordinate, as appropriate, with other offices
within the Commission, other taskforces that may be
established within the Commission, self-regulatory
organizations, and the Elder Justice Coordinating
Council; and
``(D) consult, as appropriate, with State securities
and law enforcement authorities, State insurance
regulators, and other Federal agencies.
``(6) Report.--The Taskforce, in coordination, as
appropriate, with the Office of the Investor Advocate and self-
regulatory organizations, and in consultation, as appropriate,
with State securities and law enforcement authorities, State
insurance regulators, and Federal agencies, shall issue a
report every 2 years to the Committee on Banking, Housing, and
Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives, the first of which
shall not be issued until after the report described in section
3 of the National Senior Investor Initiative Act of 2018 has
been issued and considered by the Taskforce, containing--
``(A) appropriate statistical information and full
and substantive analysis;
``(B) a summary of recent trends and innovations that
have impacted the investment landscape for senior
investors;
``(C) a summary of regulatory initiatives that have
concentrated on senior investors and industry practices
related to senior investors;
``(D) key observations, best practices, and areas
needing improvement, involving senior investors
identified during examinations, enforcement actions,
and investor education outreach;
``(E) a summary of the most serious issues
encountered by senior investors, including issues
involving financial products and services;
``(F) an analysis with regard to existing policies
and procedures of brokers, dealers, investment
advisers, and other market participants related to
senior investors and senior investor-related topics and
whether these policies and procedures need to be
further developed or refined;
``(G) recommendations for such changes to the
regulations, guidance, and orders of the Commission and
self-regulatory organizations and such legislative
actions as may be appropriate to resolve problems
encountered by senior investors; and
``(H) any other information, as determined
appropriate by the Director of the Taskforce.
``(7) Sunset.--The Taskforce shall terminate after the end of
the 10-year period beginning on the date of the enactment of
this subsection, but may be reestablished by the Chairman.
``(8) Senior investor defined.--For purposes of this
subsection, the term `senior investor' means an investor over
the age of 65.''.
SEC. 3. GAO STUDY.
(a) In General.--Not later than 1 year after the date of enactment of
this Act, the Comptroller General of the United States shall submit to
Congress and the Senior Investor Taskforce the results of a study on
the economic costs of the financial exploitation of senior citizens.
(b) Contents.--The study required under subsection (a) shall include
information with respect to--
(1) costs--
(A) associated with losses by victims that were
incurred as a result of the financial exploitation of
senior citizens;
(B) incurred by State and Federal agencies, law
enforcement and investigatory agencies, public benefit
programs, public health programs, and other public
programs as a result of the financial exploitation of
senior citizens; and
(C) incurred by the private sector as a result of the
financial exploitation of senior citizens; and
(2) any other relevant costs that--
(A) result from the financial exploitation of senior
citizens; and
(B) the Comptroller General determines are necessary
and appropriate to include in order to provide Congress
and the public with a full and accurate understanding
of the economic costs resulting from the financial
exploitation of senior citizens in the United States.
(c) Senior Citizen Defined.--For purposes of this section, the term
``senior citizen'' means an individual over the age of 65.
Purpose and Summary
On July 10, 2018, Representative Gottheimer introduced H.R.
6323, the ``National Senior Investor Initiative Act of 2018''.
As modified by an amendment in the nature of a substitute, H.R.
6323 creates an interdivisional task force at the U.S.
Securities and Exchange Commission (``SEC'')--composed of staff
from the Division of Enforcement, Office of Compliance,
Inspections and Examinations, and the Office of Investor
Education and Advocacy--to examine and identify challenges
facing senior investors (the ``Task Force''). Every two years,
in consultation with other SEC offices, State securities and
law enforcement authorities, State insurance regulators, and
Federal agencies, the Task Force is to report to Congress and
recommend any regulatory or statutory changes that it believes
are necessary. Further, within one year of enactment, the U.S.
Government Accountability Office (``GAO'') shall study and
report on the economic costs of the financial exploitation of
senior citizens.
Background and Need for Legislation
The goal of H.R. 6323 is to help the SEC ensure it
continues to identify and correct financial challenges facing
senior investors. The SEC recently has focused attention on
these issues through the Retail Strategy Task Force established
under Chairman Jay Clayton's leadership and the white paper on
elder financial exploitation issued by the Office of the
Investor Advocate in July 2018. H.R. 6323 will provide a
statutory framework to ensure that the various SEC offices
continue to work together to address these issues.
According to a 2015 report, older Americans lose
approximately $36.5 billion each year to financial scams and
abuse. These numbers are increasing as technology makes it
easier for scammers to target older Americans. For example, in
New York, the state reported that in twelve months seniors lost
as much as $1.5 billion from misappropriation of funds.
Further, a 2016 survey from the Investor Protection Trust found
that almost 1-in-5 seniors, approximately 7 million Americans,
have reported being victims of exploitation. Even more
troubling is that the majority of financial exploitation
against seniors goes unreported. According to the National
Adult Protective Services Association, only one in 44 cases of
financial abuse may be reported.
On May the President signed into law the ``Economic Growth,
Regulatory Relief and Consumer Protection Act'' (P.L. 115-174)
(EGRRCPA). Section 303 of the law, entitled ``Immunity from
suit for disclosure of financial exploitation of senior
citizens'', or more commonly known as the Senior Safe Act
provides immunity to depository institutions, credit unions,
investment advisers, broker-dealers, insurance companies,
insurance agency, or transfer agents, and their employees from
civil or administrative liability, as long as employees at
these specified institutions receive training in how to
identify and report predatory activity and reports are made
``in good faith'' and ``with reasonable care.'' Current bank
privacy laws make it difficult for these entities to report any
potentially fraudulent activity. Maine's Senior$afe program
served as the basis for the Senior Safe Act and Section 303 of
the EGRRCPA. Sadly, financial exploitation of seniors often is
committed by those closest to seniors, such as friends,
neighbors, family members, caregivers, or other trusted
individuals. Maine designed its program to train financial
professionals to detect and report senior financial abuse.
At a time when the population of senior investors is
increasing rapidly, H.R. 6323 will help to ensure that the SEC
can marshal its resources across the agency to identify and
work to reduce financial abuse against senior investors. The
legislation empowers the SEC Chairman to appoint a director of
the Task Force, who can be a current SEC employee, and to
ensure the Task Force is operated in coordination with other
offices and initiatives to reduce bureaucratic redundancies.
The Task Force will report to Congress every two years on key
observations, best practices, and areas for improvement
identified throughout its work. Additionally, the GAO will
conduct a study on the economic costs of the financial
exploitation of elder investors--which will provide much needed
recent data on financial exploitation; and the Task Force must
consider this report in connection with its own first report to
Congress.
Hearings
The Committee on Financial Services held no hearings
examining matters relating to H.R. 6323.
Committee Consideration
The Committee on Financial Services met in open session on
July 11, 2018, and ordered H.R. 6323 to be reported favorably
to the House, as amended, by voice vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. The
sole vote was a motion by Chairman Hensarling to report the
bill favorably to the House as amended. The motion was agreed
to by voice vote, a quorum being present.
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee states that H.R. 6323
will help the SEC to eliminate the increasing number of
financial exploitation cases against senior citizens by
creating an interdivisional task force at the SEC to examine
and identify challenges facing senior investors and will help
Congress and the public, through a report by the GAO, to better
understand the economic costs of the exploitation of seniors.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Congressional Budget Office Estimates
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 17, 2018.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 3555, H.R. 6177,
H.R. 6319, H.R. 6320, H.R. 6321, H.R. 6322, H.R. 6323, and H.R.
6324.
If you wish further details on these estimates, we will be
pleased to provide them. The CBO staff contact is Stephen
Rabent.
Sincerely,
Mark P. Hadley
(For Keith Hall, Director).
Enclosure.
Securities and Exchange Commission Legislation
On July 11, the House Committee on Financial Services
ordered eight bills to be reported related to the rules,
regulations, and operations of the Securities and Exchange
Commission (SEC). The bills are:
H.R. 3555, the Exchange Regulatory
Improvement Act, would require the Securities and
Exchange Commission (SEC) to issue regulations
regarding its definition of what constitutes a facility
used by a national securities exchange;
H.R. 6177, the Developing and Empowering our
Aspiring Leaders Act of 2018, would direct the SEC to
conduct a rulemaking to expand what types of asset
acquisitions are considered qualifying investments for
a venture capital fund;
H.R. 6319, the Expanding Investment in Small
Business Act, would require the SEC to conduct a study
on the limitation on the amount of outstanding
securities a closed-end fund may hold from a single
issuer and still be classified as diversified;
H.R. 6320, the Promoting Transparent
Standards for Corporate Insiders Act, would require the
SEC to conduct a study of various proposals to change
agency rules regarding the use of written trading plans
by certain securities traders;
H.R. 6321, the Investment Adviser Regulatory
Flexibility Improvement Act, would require the SEC to
revise the definitions of a small business and small
organization applicable for assessing the effect of the
agency's rulemakings under the Investment Advisers Act
of 1940 on those entities;
H.R. 6322, the Enhancing Multi-Class Share
Disclosures Act, would direct the SEC to issue a rule
requiring securities issuers with multi-class stock
structures to make disclosures regarding the voting
power of certain individuals;
H.R. 6323, the National Senior Investor
Initiative Act of 2018, would direct the SEC to
establish a taskforce to identify challenges that
senior investors face and to report on its findings
every two years; and
H.R. 6324, the Middle Market IPO
Underwriting Cost Act, would direct the SEC to study
the costs associated with small and medium-sized
companies undertaking an initial public offering and to
report on its findings.
Using information from the SEC regarding the costs of
similar activities, CBO estimates that implementing seven of
those bills--H.R. 3555, H.R. 6177, H.R. 6319, H.R. 6320, H.R.
6321, H.R. 6322, and H.R. 6324--would each have a gross cost of
about $1 million for the agency to conduct the required studies
and rulemakings and to issue reports. CBO estimates that
implementing the eighth bill--H.R. 6323--would have a gross
cost of $7 million over the 2019-2023 period for the SEC to
establish and carry out the functions of the taskforce
established under the bill.
However, the SEC is authorized to collect fees sufficient
to offset its annual appropriation; therefore, CBO estimates
that the net effect on discretionary spending of implementing
each of those bills would be negligible, assuming appropriation
actions consistent with that authority. H.R. 6323 also would
require the Government Accountability Office (GAO) to conduct a
study on the economic costs of the financial exploitation of
senior citizens and CBO estimates that implementing that
section would cost GAO less than $500,000; such spending would
be subject to the availability of appropriated funds.
None of the bills would affect direct spending or revenues;
therefore, pay-as-you-go procedures do not apply for any of the
eight bills.
None of the bills would increase net direct spending or on-
budget deficits in any of the four consecutive 10-year periods
beginning in 2029, CBO estimates.
None of the bills contain intergovernmental mandates as
defined in the Unfunded Mandate Reform Act (UMRA) and would not
affect the budgets of state, local, or tribal governments. All
of them would require the SEC to take actions that could raise
the agency's administrative costs and the fees it collects to
offset those costs. If the SEC increased fees, it would
increase the cost of an existing mandate on private entities
required to pay those fees. CBO estimates that none of the
bills would increase fees in an amount that would exceed the
annual threshold for private-sector mandates established in
UMRA ($160 million in 2018, adjusted annually for inflation).
The CBO staff contacts for this estimate are Stephen Rabent
(for federal costs) and Rachel Austin (for mandates). The
estimate was reviewed by H. Samuel Papenfuss, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995.
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of the section
102(b)(3) of the Congressional Accountability Act.
Earmark Identification
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
Duplication of Federal Programs
In compliance with clause 3(c)(5) of rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program; (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139; or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
Disclosure of Directed Rulemaking
Pursuant to section 3(i) of H. Res. 5, (115th Congress),
the following statement is made concerning directed rule
makings: The Committee estimates that the bill requires no
directed rule makings within the meaning of such section.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This section cites H.R. 6323 as the ``National Senior
Investor Initiative Act of 2018'' or the ``Senior Security Act
of 2018.''
Section 2. Senior Investors Taskforce
This section amends Section 4 of the Securities Exchange
Act of 1934 to establish an interdivisional Senior Investors
Task Force within the Commission, composed of staff from the
Division of Enforcement, Office of Compliance, Inspections and
Examinations, and Office of Investor Education and Advocacy, to
examine and identify challenges facing senior investors. Senior
investors are defined as investors over the age of 65.
The task force will issue a report every two years on its
findings to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives. The Task Force will terminate
at the end of the 10-year period after enactment.
The SEC is empowered to establish and run the Task Force in
a manner that compliments initiatives and activities of other
divisions, offices, and task forces and to reduce bureaucratic
redundancies.
Section 3. GAO study
This section cites that GAO is ordered to conduct a study
within one year after enactment as to the economic costs
associated with the financial exploitation of senior citizens.
The section also requires the GAO study to include certain
information.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
SECURITIES EXCHANGE ACT OF 1934
TITLE I--REGULATION OF SECURITIES EXCHANGES
* * * * * * *
securities and exchange commission
Sec. 4. (a) There is hereby established a Securities and
Exchange Commission (hereinafter referred to as the
``Commission'') to be composed of five commissioners to be
appointed by the President by and with the advice and consent
of the Senate. Not more than three of such commissioners shall
be members of the same political party, and in making
appointments members of different political parties shall be
appointed alternately as nearly as may be practicable. No
commissioner shall engage in any other business, vocation, or
employment than that of serving as commissioner, nor shall any
commissioner participate, directly or indirectly, in any stock-
market operations or transactions of a character subject to
regulation by the Commission pursuant to this title. Each
commissioner shall hold office for a term of five years and
until his successor is appointed and has qualified, except that
he shall not so continue to serve beyond the expiration of the
next session of Congress subsequent to the expiration of said
fixed term of office, and except (1) any commissioner appointed
to fill a vacancy occurring prior to the expiration of the term
for which his predecessor was appointed shall be appointed for
the remainder of such term, and (2) the terms of office of the
commissioners first taking office after the enactment of this
title shall expire as designated by the President at the time
of nomination, one at the end of one year, one at the end of
two years, one at the end of three years, one at the end of
four years, and one at the end of five years, after the date of
the enactment of this title.
(b) Appointment and Compensation of Staff and Leasing
Authority.--
(1) Appointment and compensation.--The Commission
shall appoint and compensate officers, attorneys,
economists, examiners, and other employees in
accordance with section 4802 of title 5, United States
Code.
(2) Reporting of information.--In establishing and
adjusting schedules of compensation and benefits for
officers, attorneys, economists, examiners, and other
employees of the Commission under applicable provisions
of law, the Commission shall inform the heads of the
agencies referred to under section 1206 of the
Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (12 U.S.C. 1833b) and Congress
of such compensation and benefits and shall seek to
maintain comparability with such agencies regarding
compensation and benefits.
(3) Leasing authority.--Nothwithstanding any other
provision of law, the Commission is authorized to enter
directly into leases for real property for office,
meeting, storage, and such other space as is necessary
to carry out its functions, and shall be exempt from
any General Services Administration space management
regulations or directives.
(c) Notwithstanding any other provision of law, in accordance
with regulations which the Commission shall prescribe to
prevent conflicts of interest, the Commission may accept
payment and reimbursement, in cash or in kind, from non-Federal
agencies, organizations, and individuals for travel,
subsistence, and other necessary expenses incurred by
Commission members and employees in attending meetings and
conferences concerning the functions or activities of the
Commission. Any payment or reimbursement accepted shall be
credited to the appropriated funds of the Commission. The
amount of travel, subsistence, and other necessary expenses for
members and employees paid or reimbursed under this subsection
may exceed per diem amounts established in official travel
regulations, but the Commission may include in its regulations
under this subsection a limitation on such amounts.
(d) Notwithstanding any other provision of law, former
employers of participants in the Commission's professional
fellows programs may pay such participants their actual
expenses for relocation to Washington, District of Columbia, to
facilitate their participation in such programs, and program
participants may accept such payments.
(e) Notwithstanding any other provision of law, whenever any
fee is required to be paid to the Commission pursuant to any
provision of the securities laws or any other law, the
Commission may provide by rule that such fee shall be paid in a
manner other than in cash and the Commission may also specify
the time that such fee shall be determined and paid relative to
the filing of any statement or document with the Commission.
(f) Reimbursement of Expenses for Assisting Foreign
Securities Authorities.--Notwithstanding any other provision of
law, the Commission may accept payment and reimbursement, in
cash or in kind, from a foreign securities authority, or made
on behalf of such authority, for necessary expenses incurred by
the Commission, its members, and employees in carrying out any
investigation pursuant to section 21(a)(2) of this title or in
providing any other assistance to a foreign securities
authority. Any payment or reimbursement accepted shall be
considered a reimbursement to the appropriated funds of the
Commission.
(g) Office of the Investor Advocate.--
(1) Office established.--There is established within
the Commission the Office of the Investor Advocate (in
this subsection referred to as the ``Office'').
(2) Investor advocate.--
(A) In general.--The head of the Office shall
be the Investor Advocate, who shall--
(i) report directly to the Chairman;
and
(ii) be appointed by the Chairman, in
consultation with the Commission, from
among individuals having experience in
advocating for the interests of
investors in securities and investor
protection issues, from the perspective
of investors.
(B) Compensation.--The annual rate of pay for
the Investor Advocate shall be equal to the
highest rate of annual pay for other senior
executives who report to the Chairman of the
Commission.
(C) Limitation on service.--An individual who
serves as the Investor Advocate may not be
employed by the Commission--
(i) during the 2-year period ending
on the date of appointment as Investor
Advocate; or
(ii) during the 5-year period
beginning on the date on which the
person ceases to serve as the Investor
Advocate.
(3) Staff of office.--The Investor Advocate, after
consultation with the Chairman of the Commission, may
retain or employ independent counsel, research staff,
and service staff, as the Investor Advocate deems
necessary to carry out the functions, powers, and
duties of the Office.
(4) Functions of the investor advocate.--The Investor
Advocate shall--
(A) assist retail investors in resolving
significant problems such investors may have
with the Commission or with self-regulatory
organizations;
(B) identify areas in which investors would
benefit from changes in the regulations of the
Commission or the rules of self-regulatory
organizations;
(C) identify problems that investors have
with financial service providers and investment
products;
(D) analyze the potential impact on investors
of--
(i) proposed regulations of the
Commission; and
(ii) proposed rules of self-
regulatory organizations registered
under this title; and
(E) to the extent practicable, propose to the
Commission changes in the regulations or orders
of the Commission and to Congress any
legislative, administrative, or personnel
changes that may be appropriate to mitigate
problems identified under this paragraph and to
promote the interests of investors.
(5) Access to documents.--The Commission shall ensure
that the Investor Advocate has full access to the
documents of the Commission and any self-regulatory
organization, as necessary to carry out the functions
of the Office.
(6) Annual reports.--
(A) Report on objectives.--
(i) In general.--Not later than June
30 of each year after 2010, the
Investor Advocate shall submit to the
Committee on Banking, Housing, and
Urban Affairs of the Senate and the
Committee on Financial Services of the
House of Representatives a report on
the objectives of the Investor Advocate
for the following fiscal year.
(ii) Contents.--Each report required
under clause (i) shall contain full and
substantive analysis and explanation.
(B) Report on activities.--
(i) In general.--Not later than
December 31 of each year after 2010,
the Investor Advocate shall submit to
the Committee on Banking, Housing, and
Urban Affairs of the Senate and the
Committee on Financial Services of the
House of Representatives a report on
the activities of the Investor Advocate
during the immediately preceding fiscal
year.
(ii) Contents.--Each report required
under clause (i) shall include--
(I) appropriate statistical
information and full and
substantive analysis;
(II) information on steps
that the Investor Advocate has
taken during the reporting
period to improve investor
services and the responsiveness
of the Commission and self-
regulatory organizations to
investor concerns;
(III) a summary of the most
serious problems encountered by
investors during the reporting
period;
(IV) an inventory of the
items described in subclause
(III) that includes--
(aa) identification
of any action taken by
the Commission or the
self-regulatory
organization and the
result of such action;
(bb) the length of
time that each item has
remained on such
inventory; and
(cc) for items on
which no action has
been taken, the reasons
for inaction, and an
identification of any
official who is
responsible for such
action;
(V) recommendations for such
administrative and legislative
actions as may be appropriate
to resolve problems encountered
by investors; and
(VI) any other information,
as determined appropriate by
the Investor Advocate.
(iii) Independence.--Each report
required under this paragraph shall be
provided directly to the Committees
listed in clause (i) without any prior
review or comment from the Commission,
any commissioner, any other officer or
employee of the Commission, or the
Office of Management and Budget.
(iv) Confidentiality.--No report
required under clause (i) may contain
confidential information.
(7) Regulations.--The Commission shall, by
regulation, establish procedures requiring a formal
response to all recommendations submitted to the
Commission by the Investor Advocate, not later than 3
months after the date of such submission.
(8) Ombudsman.--
(A) Appointment.--Not later than 180 days
after the date on which the first Investor
Advocate is appointed under paragraph
(2)(A)(i), the Investor Advocate shall appoint
an Ombudsman, who shall report directly to the
Investor Advocate.
(B) Duties.--The Ombudsman appointed under
subparagraph (A) shall--
(i) act as a liaison between the
Commission and any retail investor in
resolving problems that retail
investors may have with the Commission
or with self-regulatory organizations;
(ii) review and make recommendations
regarding policies and procedures to
encourage persons to present questions
to the Investor Advocate regarding
compliance with the securities laws;
and
(iii) establish safeguards to
maintain the confidentiality of
communications between the persons
described in clause (ii) and the
Ombudsman.
(C) Limitation.--In carrying out the duties
of the Ombudsman under subparagraph (B), the
Ombudsman shall utilize personnel of the
Commission to the extent practicable. Nothing
in this paragraph shall be construed as
replacing, altering, or diminishing the
activities of any ombudsman or similar office
of any other agency.
(D) Report.--The Ombudsman shall submit a
semiannual report to the Investor Advocate that
describes the activities and evaluates the
effectiveness of the Ombudsman during the
preceding year. The Investor Advocate shall
include the reports required under this section
in the reports required to be submitted by the
Inspector Advocate under paragraph (6).
(h) Examiners.--
(1) Division of trading and markets.--The Division of
Trading and Markets of the Commission, or any successor
organizational unit, shall have a staff of examiners
who shall--
(A) perform compliance inspections and
examinations of entities under the jurisdiction
of that Division; and
(B) report to the Director of that Division.
(2) Division of investment management.--The Division
of Investment Management of the Commission, or any
successor organizational unit, shall have a staff of
examiners who shall--
(A) perform compliance inspections and
examinations of entities under the jurisdiction
of that Division; and
(B) report to the Director of that Division.
(i) Securities and Exchange Commission Reserve Fund.--
(1) Reserve fund established.--There is established
in the Treasury of the United States a separate fund,
to be known as the ``Securities and Exchange Commission
Reserve Fund'' (referred to in this subsection as the
``Reserve Fund'').
(2) Reserve fund amounts.--
(A) In general.--Except as provided in
subparagraph (B), any registration fees
collected by the Commission under section 6(b)
of the Securities Act of 1933 (15 U.S.C.
77f(b)) or section 24(f) of the Investment
Company Act of 1940 (15 U.S.C. 80a-24(f)) shall
be deposited into the Reserve Fund.
(B) Limitations.--For any 1 fiscal year--
(i) the amount deposited in the Fund
may not exceed $50,000,000; and
(ii) the balance in the Fund may not
exceed $100,000,000.
(C) Excess fees.--Any amounts in excess of
the limitations described in subparagraph (B)
that the Commission collects from registration
fees under section 6(b) of the Securities Act
of 1933 (15 U.S.C. 77f(b)) or section 24(f) of
the Investment Company Act of 1940 (15 U.S.C.
80a-24(f)) shall be deposited in the General
Fund of the Treasury of the United States and
shall not be available for obligation by the
Commission.
(3) Use of amounts in reserve fund.--The Commission
may obligate amounts in the Reserve Fund, not to exceed
a total of $100,000,000 in any 1 fiscal year, as the
Commission determines is necessary to carry out the
functions of the Commission. Any amounts in the reserve
fund shall remain available until expended. Not later
than 10 days after the date on which the Commission
obligates amounts under this paragraph, the Commission
shall notify Congress of the date, amount, and purpose
of the obligation.
(4) Rule of construction.--Amounts collected and
deposited in the Reserve Fund shall not be construed to
be Government funds or appropriated monies and shall
not be subject to apportionment for the purpose of
chapter 15 of title 31, United States Code, or under
any other authority.
(j) Office of the Advocate for Small Business Capital
Formation.--
(1) Office established.--There is established within
the Commission the Office of the Advocate for Small
Business Capital Formation (hereafter in this
subsection referred to as the ``Office'').
(2) Advocate for small business capital formation.--
(A) In general.--The head of the Office shall
be the Advocate for Small Business Capital
Formation, who shall--
(i) report directly to the
Commission; and
(ii) be appointed by the Commission,
from among individuals having
experience in advocating for the
interests of small businesses and
encouraging small business capital
formation.
(B) Compensation.--The annual rate of pay for
the Advocate for Small Business Capital
Formation shall be equal to the highest rate of
annual pay for other senior executives who
report directly to the Commission.
(C) No current employee of the commission.--
An individual may not be appointed as the
Advocate for Small Business Capital Formation
if the individual is currently employed by the
Commission.
(3) Staff of office.--The Advocate for Small Business
Capital Formation, after consultation with the
Commission, may retain or employ independent counsel,
research staff, and service staff, as the Advocate for
Small Business Capital Formation determines to be
necessary to carry out the functions of the Office.
(4) Functions of the advocate for small business
capital formation.--The Advocate for Small Business
Capital Formation shall--
(A) assist small businesses and small
business investors in resolving significant
problems such businesses and investors may have
with the Commission or with self-regulatory
organizations;
(B) identify areas in which small businesses
and small business investors would benefit from
changes in the regulations of the Commission or
the rules of self-regulatory organizations;
(C) identify problems that small businesses
have with securing access to capital, including
any unique challenges to minority-owned small
businesses, women-owned small businesses, and
small businesses affected by hurricanes or
other natural disasters;
(D) analyze the potential impact on small
businesses and small business investors of--
(i) proposed regulations of the
Commission that are likely to have a
significant economic impact on small
businesses and small business capital
formation; and
(ii) proposed rules that are likely
to have a significant economic impact
on small businesses and small business
capital formation of self-regulatory
organizations registered under this
title;
(E) conduct outreach to small businesses and
small business investors, including through
regional roundtables, in order to solicit views
on relevant capital formation issues;
(F) to the extent practicable, propose to the
Commission changes in the regulations or orders
of the Commission and to Congress any
legislative, administrative, or personnel
changes that may be appropriate to mitigate
problems identified under this paragraph and to
promote the interests of small businesses and
small business investors;
(G) consult with the Investor Advocate on
proposed recommendations made under
subparagraph (F); and
(H) advise the Investor Advocate on issues
related to small businesses and small business
investors.
(5) Access to documents.--The Commission shall ensure
that the Advocate for Small Business Capital Formation
has full access to the documents and information of the
Commission and any self-regulatory organization, as
necessary to carry out the functions of the Office.
(6) Annual report on activities.--
(A) In general.--Not later than December 31
of each year after 2015, the Advocate for Small
Business Capital Formation shall submit to the
Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on
Financial Services of the House of
Representatives a report on the activities of
the Advocate for Small Business Capital
Formation during the immediately preceding
fiscal year.
(B) Contents.--Each report required under
subparagraph (A) shall include--
(i) appropriate statistical
information and full and substantive
analysis;
(ii) information on steps that the
Advocate for Small Business Capital
Formation has taken during the
reporting period to improve small
business services and the
responsiveness of the Commission and
self-regulatory organizations to small
business and small business investor
concerns;
(iii) a summary of the most serious
issues encountered by small businesses
and small business investors, including
any unique issues encountered by
minority-owned small businesses, women-
owned small businesses, and small
businesses affected by hurricanes or
other natural disasters and their
investors, during the reporting period;
(iv) an inventory of the items
summarized under clause (iii)
(including items summarized under such
clause for any prior reporting period
on which no action has been taken or
that have not been resolved to the
satisfaction of the Advocate for Small
Business Capital Formation as of the
beginning of the reporting period
covered by the report) that includes--
(I) identification of any
action taken by the Commission
or the self-regulatory
organization and the result of
such action;
(II) the length of time that
each item has remained on such
inventory; and
(III) for items on which no
action has been taken, the
reasons for inaction, and an
identification of any official
who is responsible for such
action;
(v) recommendations for such changes
to the regulations, guidance and orders
of the Commission and such legislative
actions as may be appropriate to
resolve problems with the Commission
and self-regulatory organizations
encountered by small businesses and
small business investors and to
encourage small business capital
formation; and
(vi) any other information, as
determined appropriate by the Advocate
for Small Business Capital Formation.
(C) Confidentiality.--No report required by
subparagraph (A) may contain confidential
information.
(D) Independence.--Each report required under
subparagraph (A) shall be provided directly to
the committees of Congress listed in such
subparagraph without any prior review or
comment from the Commission, any commissioner,
any other officer or employee of the
Commission, or the Office of Management and
Budget.
(7) Regulations.--The Commission shall establish
procedures requiring a formal response to all
recommendations submitted to the Commission by the
Advocate for Small Business Capital Formation, not
later than 3 months after the date of such submission.
(8) Government-business forum on small business
capital formation.--The Advocate for Small Business
Capital Formation shall be responsible for planning,
organizing, and executing the annual Government-
Business Forum on Small Business Capital Formation
described in section 503 of the Small Business
Investment Incentive Act of 1980 (15 U.S.C. 80c-1).
(9) Rule of construction.--Nothing in this subsection
may be construed as replacing or reducing the
responsibilities of the Investor Advocate with respect
to small business investors.
(k) Senior Investor Taskforce.--
(1) Establishment.--There is established within the
Commission the Senior Investor Taskforce (in this
subsection referred to as the ``Taskforce'').
(2) Director of the taskforce.--The head of the
Taskforce shall be the Director, who shall--
(A) report directly to the Chairman; and
(B) be appointed by the Chairman, in
consultation with the Commission, from among
individuals--
(i) currently employed by the
Commission or from outside of the
Commission; and
(ii) having experience in advocating
for the interests of senior investors.
(3) Staffing.--The Chairman shall ensure that--
(A) the Taskforce is staffed sufficiently to
carry out fully the requirements of this
subsection; and
(B) such staff shall include individuals from
the Division of Enforcement, Office of
Compliance Inspections and Examinations, and
Office of Investor Education and Advocacy.
(4) Minimizing duplication of efforts.--In organizing
and staffing the Taskforce, the Chairman shall take
such actions as may be necessary to minimize the
duplication of efforts within the divisions and offices
described under paragraph (3)(B) and any other
divisions, offices, or taskforces of the Commission.
(5) Functions of the taskforce.--The Taskforce
shall--
(A) identify challenges that senior investors
encounter, including problems associated with
financial exploitation and cognitive decline;
(B) identify areas in which senior investors
would benefit from changes in the regulations
of the Commission or the rules of self-
regulatory organizations;
(C) coordinate, as appropriate, with other
offices within the Commission, other taskforces
that may be established within the Commission,
self-regulatory organizations, and the Elder
Justice Coordinating Council; and
(D) consult, as appropriate, with State
securities and law enforcement authorities,
State insurance regulators, and other Federal
agencies.
(6) Report.--The Taskforce, in coordination, as
appropriate, with the Office of the Investor Advocate
and self-regulatory organizations, and in consultation,
as appropriate, with State securities and law
enforcement authorities, State insurance regulators,
and Federal agencies, shall issue a report every 2
years to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial
Services of the House of Representatives, the first of
which shall not be issued until after the report
described in section 3 of the National Senior Investor
Initiative Act of 2018 has been issued and considered
by the Taskforce, containing--
(A) appropriate statistical information and
full and substantive analysis;
(B) a summary of recent trends and
innovations that have impacted the investment
landscape for senior investors;
(C) a summary of regulatory initiatives that
have concentrated on senior investors and
industry practices related to senior investors;
(D) key observations, best practices, and
areas needing improvement, involving senior
investors identified during examinations,
enforcement actions, and investor education
outreach;
(E) a summary of the most serious issues
encountered by senior investors, including
issues involving financial products and
services;
(F) an analysis with regard to existing
policies and procedures of brokers, dealers,
investment advisers, and other market
participants related to senior investors and
senior investor-related topics and whether
these policies and procedures need to be
further developed or refined;
(G) recommendations for such changes to the
regulations, guidance, and orders of the
Commission and self-regulatory organizations
and such legislative actions as may be
appropriate to resolve problems encountered by
senior investors; and
(H) any other information, as determined
appropriate by the Director of the Taskforce.
(7) Sunset.--The Taskforce shall terminate after the
end of the 10-year period beginning on the date of the
enactment of this subsection, but may be reestablished
by the Chairman.
(8) Senior investor defined.--For purposes of this
subsection, the term ``senior investor'' means an
investor over the age of 65.
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