[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4790 Engrossed in House (EH)]
<DOC>
118th CONGRESS
2d Session
H. R. 4790
_______________________________________________________________________
AN ACT
To amend the Federal securities laws with respect to the materiality of
disclosure requirements, to establish the Public Company Advisory
Committee, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Prioritizing
Economic Growth Over Woke Policies Act''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
DIVISION A--GUARDRAIL ACT OF 2023
Sec. 1001. Short title; table of contents.
TITLE I--MANDATORY MATERIALITY REQUIREMENT
Sec. 1101. Limitation on disclosure requirements.
TITLE II--SEC JUSTIFICATION OF NON-MATERIAL DISCLOSURE MANDATES
Sec. 1201. SEC justification of non-material disclosure mandates.
TITLE III--PUBLIC COMPANY ADVISORY COMMITTEE
Sec. 1301. Public Company Advisory Committee.
TITLE IV--PROTECTING U.S. BUSINESS SOVEREIGNTY
Sec. 1401. Study on detrimental impact of the Directive on Corporate
Sustainability Due Diligence and Corporate
Sustainability Reporting Directive.
DIVISION B--BUSINESSES OVER ACTIVISTS ACT
Sec. 2001. Short title.
Sec. 2002. Limitation with respect to compelling the inclusion or
discussion of shareholder proposals.
DIVISION C--PROTECTING AMERICANS' RETIREMENT SAVINGS FROM POLITICS ACT
Sec. 3001. Short title; Table of contents.
TITLE I--PERFORMANCE OVER POLITICS
Sec. 3101. Exclusion of certain substantially similar shareholder
proposals.
TITLE II--NO EXPENSIVE, STIFLING GOVERNANCE
Sec. 3201. Exclusion of certain shareholder proposals.
TITLE III--EXCLUSION OF CERTAIN ESG SHAREHOLDER PROPOSALS
Sec. 3301. Exclusion of certain ESG shareholder proposals.
TITLE IV--EXCLUSIONS AVAILABLE REGARDLESS OF SIGNIFICANT SOCIAL POLICY
ISSUE
Sec. 3401. Exclusions available regardless of significant social policy
issue.
TITLE V--CORPORATE GOVERNANCE EXAMINATION
Sec. 3501. Study of certain issues with respect to shareholder
proposals, proxy advisory firms, and the
proxy process.
TITLE VI--REGISTRATION OF PROXY ADVISORY FIRMS
Sec. 3601. Registration of proxy advisory firms.
TITLE VII--LIABILITY FOR CERTAIN FAILURES TO DISCLOSE MATERIAL
INFORMATION OR MAKING OF MATERIAL MISSTATEMENTS
Sec. 3701. Liability for certain failures to disclose material
information or making of material
misstatements.
TITLE VIII--DUTIES OF INVESTMENT ADVISORS, ASSET MANAGERS, AND PENSION
FUNDS
Sec. 3801. Duties of investment advisors, asset managers, and pension
funds.
TITLE IX--PROTECTING AMERICANS' SAVINGS
Sec. 3901. Requirements related to proxy voting.
TITLE X--EMPOWERING SHAREHOLDERS
Sec. 3911. Proxy voting of passively managed funds.
TITLE XI--PROTECTING RETAIL INVESTORS' SAVINGS
Sec. 3921. Best interest based on pecuniary factors.
Sec. 3922. Study on climate change and other environmental disclosures
in municipal bond market.
Sec. 3923. Study on solicitation of municipal securities business.
DIVISION D--AMERICAN FIRST ACT OF 2023
Sec. 4001. Short title; Table of contents.
TITLE I--STOP EXECUTIVE CAPTURE OF BANKING REGULATORS
Sec. 4101. Report on the implementation of recommendations from the
FSOC Chairperson and Executive Orders.
TITLE II--ENSURING U.S. AUTHORITY OVER U.S. BANKING REGULATIONS
Sec. 4201. Requirements in connection with rulemakings implementing
policies of non-governmental international
organizations.
Sec. 4202. Report on certain climate-related interactions with covered
international organizations.
TITLE III--BANKING REGULATOR INTERNATIONAL REPORTING
Sec. 4301. Reporting on interactions with non-governmental
international organizations.
TITLE IV--SUPERVISION REFORM
Sec. 4401. Removal of the Vice Chairman for Supervision designation.
DIVISION E--LIMITATION ON SEC RESERVE FUND
Sec. 5001. Limitation.
DIVISION A--GUARDRAIL ACT OF 2023
SEC. 1001. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This division may be cited as the ``Guiding
Uniform and Responsible Disclosure Requirements and Information Limits
Act of 2023'' or the ``GUARDRAIL Act of 2023''.
(b) Table of Contents.--The table of contents for this division is
as follows:
Sec. 1001. Short title; table of contents.
TITLE I--MANDATORY MATERIALITY REQUIREMENT
Sec. 1101. Limitation on disclosure requirements.
TITLE II--SEC JUSTIFICATION OF NON-MATERIAL DISCLOSURE MANDATES
Sec. 1201. SEC justification of non-material disclosure mandates.
TITLE III--PUBLIC COMPANY ADVISORY COMMITTEE
Sec. 1301. Public Company Advisory Committee.
TITLE IV--PROTECTING U.S. BUSINESS SOVEREIGNTY
Sec. 1401. Study on detrimental impact of the Directive on Corporate
Sustainability Due Diligence and Corporate
Sustainability Reporting Directive.
TITLE I--MANDATORY MATERIALITY REQUIREMENT
SEC. 1101. LIMITATION ON DISCLOSURE REQUIREMENTS.
(a) Securities Act of 1933.--Section 2(b) of the Securities Act of
1933 (15 U.S.C. 77b(b)) is amended--
(1) in the subsection heading, by inserting ``; Limitation
on Disclosure Requirements'' after ``Formation'';
(2) by striking ``Whenever'' and inserting the following:
``(1) In general.--Whenever''; and
(3) by adding at the end the following:
``(2) Limitation.--
``(A) In general.--Whenever pursuant to this title
the Commission is engaged in rulemaking regarding
disclosure obligations of issuers, the Commission shall
expressly provide that an issuer is only required to
disclose information in response to such disclosure
obligations to the extent the issuer has determined
that such information is material with respect to a
voting or investment decision regarding the securities
of such issuer.
``(B) Applicability.--Subparagraph (A) shall not
apply with respect to the removal of any disclosure
requirement with respect to an issuer.
``(C) Rule of construction.--For the purposes of
this paragraph, information is considered material with
respect to a voting or investment decision regarding
the securities of an issuer if there is a substantial
likelihood that a reasonable investor would view the
failure to disclose that information as having
significantly altered the total mix of information made
available to the investor.''.
(b) Securities Exchange Act of 1934.--Section 3(f) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(f)) is amended--
(1) in the subsection heading, by inserting ``; Limitation
on Disclosure Requirements'' after ``Formation'';
(2) by striking ``Whenever'' and inserting the following:
``(1) In general.--Whenever''; and
(3) by adding at the end the following:
``(2) Limitation.--
``(A) In general.--Whenever pursuant to this title
the Commission is engaged in rulemaking regarding
disclosure obligations of issuers, the Commission shall
expressly provide that an issuer is only required to
disclose information in response to such disclosure
obligations to the extent the issuer has determined
that such information is material with respect to a
voting or investment decision regarding the securities
of such issuer.
``(B) Applicability.--Subparagraph (A) shall not
apply with respect to the removal of any disclosure
requirement with respect to an issuer.
``(C) Rule of construction.--For the purposes of
this paragraph, information is considered material with
respect to a voting or investment decision regarding
the securities of an issuer if there is a substantial
likelihood that a reasonable investor would view the
failure to disclose that information as having
significantly altered the total mix of information made
available to the investor.''.
TITLE II--SEC JUSTIFICATION OF NON-MATERIAL DISCLOSURE MANDATES
SEC. 1201. SEC JUSTIFICATION OF NON-MATERIAL DISCLOSURE MANDATES.
Section 23 of the Securities Exchange Act of 1934 (15 U.S.C. 78w)
is amended by adding at the end the following:
``(e) Non-material Disclosure Mandates.--
``(1) Disclosure.--The Commission shall maintain a list on
the website of the Commission that contains--
``(A) each mandate under the Federal securities
laws and regulations that requires the disclosure of
non-material information; and
``(B) for each such disclosure mandate, an
explanation of why the mandate is required.
``(2) Study and report.--The Commission shall, every 5
years, issue a report to the Congress justifying each
disclosure contained on the list required under paragraph (1).
``(3) No private liability for failing to make a non-
material disclosure.--A person who fails to disclose non-
material information required to be disclosed under the Federal
securities laws or regulations shall not be liable for such
failure in any private action.''.
TITLE III--PUBLIC COMPANY ADVISORY COMMITTEE
SEC. 1301. PUBLIC COMPANY ADVISORY COMMITTEE.
The Securities Exchange Act of 1934 is amended by inserting after
section 40 (15 U.S.C. 78qq) the following:
``SEC. 40A. PUBLIC COMPANY ADVISORY COMMITTEE.
``(a) Establishment and Purpose.--
``(1) Establishment.--There is established within the
Commission the Public Company Advisory Committee (referred to
in this section as the `Committee').
``(2) Purpose.--The Committee shall--
``(A) provide the Commission with advice on its
rules, regulations, and policies with regard to its
mission of protecting investors, maintaining fair,
orderly, and efficient markets, and facilitating
capital formation, as they relate to--
``(i) existing and emerging regulatory
priorities of the Commission;
``(ii) issues relating to the public
reporting and corporate governance of public
companies;
``(iii) issues relating to the proxy
process for shareholder meetings held by public
companies;
``(iv) issues relating to trading in the
securities of public companies; and
``(v) issues relating to capital formation;
and
``(B) submit to the Commission such findings and
recommendations as the Committee determines are
appropriate, including recommendations for proposed
regulatory and legislative changes.
``(b) Membership.--
``(1) In general.--The membership of the Committee shall be
not fewer than 10, and not more than 20, members appointed by
the Commission from among individuals who--
``(A) are officers, directors, or senior officials
of public companies registered with the Commission
under the Securities Act or 1933 and this Act, except
for those public companies that own asset management,
fixed income, investment advisory, broker-dealer, or
proxy services businesses;
``(B) are executives or other individuals with
senior managerial responsibility in business,
professional, trade, and industry associations that
represent the interests of such public companies; or
``(C) are professional advisers and service
providers to such public companies (including
attorneys, accountants, investment bankers, and
financial advisers).
``(2) Qualifications.--At least 50 percent of the Committee
membership shall be drawn from individuals who would qualify
for membership under paragraph (1)(A).
``(3) Term.--
``(A) In general.--Each member of the Committee
appointed under paragraph (1) shall serve for a term of
4 years.
``(B) Vacancies.--Vacancies among the members,
whether caused by the resignation, death, removal,
expiration of a term, or otherwise, will be filled
consistent with the Commission's procedures then in
effect.
``(C) Staggered terms.--The members of the
Committee shall serve staggered terms, with one-third
of the initial members of the Committee each serving
for 1, 2, or 3 years.
``(4) Members not on other advisory committees.--Public
companies and other organizations that are currently
represented on any other Commission Advisory Committee are not
eligible to have representatives also serve on the Public
Company Advisory Committee.
``(5) Members not commission employees.-- Members appointed
under paragraph (1) shall not be considered to be employees or
agents of the Commission solely because of membership on the
Committee.
``(c) Chair; Vice Chair; Secretary; Assistant Secretary.--
``(1) In general.--The members of the Committee shall
elect, from among the members of the Committee--
``(A) a Chair;
``(B) a Vice Chair;
``(C) a Secretary; and
``(D) an Assistant Secretary.
``(2) Term.--Each member elected under paragraph (1) shall
serve for a term of two years in the capacity the member was
elected under paragraph (1).
``(3) Subcommittees.--The Chair may create subcommittees
that hold public or non-public meetings and provide
recommendations to the full Committee.
``(d) Meetings.--
``(1) Frequency of meetings.--The Committee shall meet--
``(A) not less frequently than twice annually, at
the call of the Chair of the Committee; and
``(B) from time to time, at the call of the
Commission.
``(2) Notice.--The Chair of the Committee shall give the
members of the Committee written notice of each meeting, not
later than two weeks before the date of the meeting.
``(e) Compensation and Travel Expenses.--Each member of the
Committee who is not a full-time employee of the United States shall--
``(1) be entitled to receive compensation at a rate not to
exceed the daily equivalent of the annual rate of basic pay in
effect for a position at level V of the Executive Schedule
under section 5316 of title 5, United States Code, for each day
during which the members is engaged in the actual performance
of the duties of the Committee; and
``(2) while away from the home or regular place of business
of the member in the performance of services for the Committee,
be allowed travel expenses, including per diem in lieu of
subsistence, in the same manner as persons employed
intermittently in the Government service are allowed expenses
under section 5703(b) of title 5, United States Code.
``(f) Staff.--The Commission shall make available to the Committee
such staff as the Chair of the Committee determines are necessary to
carry out this section.
``(g) Review by Commission.--The Commission shall--
``(1) review the findings and recommendations of the
Committee; and
``(2) each time the Committee submits a finding or
recommendation to the Commission, promptly issue a public
statement--
``(A) assessing the finding or recommendation of
the Committee; and
``(B) disclosing the action, if any, the Commission
intends to take with respect to the finding or
recommendation.
``(h) Committee Findings.--Nothing in this section shall require
the Commission to agree to or act upon any finding or recommendation of
the Committee.
``(i) Nonapplicability of FACA.--Chapter 10 of part I of title 5,
United States Code, shall not apply to the Committee and its
activities.''.
TITLE IV--PROTECTING U.S. BUSINESS SOVEREIGNTY
SEC. 1401. STUDY ON DETRIMENTAL IMPACT OF THE DIRECTIVE ON CORPORATE
SUSTAINABILITY DUE DILIGENCE AND CORPORATE SUSTAINABILITY
REPORTING DIRECTIVE.
(a) Study.--The Securities and Exchange Commission shall conduct a
study to examine and evaluate--
(1) the detrimental impact and potential detrimental impact
of each of the Directives on--
(A) United States companies, consumers, and
investors; and
(B) the economy of the United States;
(2) the extent to which each of the Directives aligns with
international conventions and declarations on human rights and
environmental obligations; and
(3) the legal basis for the extraterritorial reach of each
of the Directives.
(b) Report.--Not later than 1 year after the date of the enactment
of this Act, the Securities and Exchange Commission shall submit to the
Committee on Banking, Housing, and Urban Affairs of the Senate, the
Committee on Financial Services of the House of Representatives, the
Secretary of State, the Secretary of Commerce, and the United States
Trade Representative a report that includes--
(1) the results of the study conducted under this section;
and
(2) recommendations for policymakers and relevant
stakeholders on potential mitigating measures, alternative
approaches, or modifications to each of the Directives that
would address any concerns identified in the study.
(c) Access to Information.--The Securities and Exchange Commission
may request from private entities such relevant data and information as
the Securities and Exchange Commission determines necessary to carry
out the study required under this section and such private entities
shall provide such requested data and information to the Securities and
Exchange Commission.
(d) Directives Defined.--In this section the term ``Directives''
means--
(1) the proposed directive entitled ``Corporate
Sustainability Due Diligence'' adopted by the European
Commission on February 23, 2022; and
(2) the Corporate Sustainability Reporting Directive of the
European Commission effective January 5, 2023.
DIVISION B--BUSINESSES OVER ACTIVISTS ACT
SEC. 2001. SHORT TITLE.
This division may be cited as the ``Businesses Over Activists
Act''.
SEC. 2002. LIMITATION WITH RESPECT TO COMPELLING THE INCLUSION OR
DISCUSSION OF SHAREHOLDER PROPOSALS.
Section 14(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78n(a)) is amended by adding at the end the following:
``(3) Limitation with respect to compelling inclusion or
discussion of shareholder proposals.--Except as provided in
paragraph (2), the Commission may not compel an issuer to
include in a proxy statement of the issuer--
``(A) any shareholder proposal; or
``(B) any discussion (either from the issuer or
otherwise) related to a shareholder proposal contained
in the proxy statement.
``(4) Rule of construction relating to state authority.--
Nothing in this Act or any other securities law shall be
construed to provide the Commission the authority to preempt
the State regulation of shareholder proposals or proxy or
consent solicitation materials.''.
DIVISION C--PROTECTING AMERICANS' RETIREMENT SAVINGS FROM POLITICS ACT
SEC. 3001. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This division may be cited as the ``Protecting
Americans' Retirement Savings from Politics Act''.
(b) Table of Contents.--The table of contents for this division is
as follows:
Sec. 3001. Short title; Table of contents.
TITLE I--PERFORMANCE OVER POLITICS
Sec. 3101. Exclusion of certain substantially similar shareholder
proposals.
TITLE II--NO EXPENSIVE, STIFLING GOVERNANCE
Sec. 3201. Exclusion of certain shareholder proposals.
TITLE III--EXCLUSION OF CERTAIN ESG SHAREHOLDER PROPOSALS
Sec. 3301. Exclusion of certain ESG shareholder proposals.
TITLE IV--EXCLUSIONS AVAILABLE REGARDLESS OF SIGNIFICANT SOCIAL POLICY
ISSUE
Sec. 3401. Exclusions available regardless of significant social policy
issue.
TITLE V--CORPORATE GOVERNANCE EXAMINATION
Sec. 3501. Study of certain issues with respect to shareholder
proposals, proxy advisory firms, and the
proxy process.
TITLE VI--REGISTRATION OF PROXY ADVISORY FIRMS
Sec. 3601. Registration of proxy advisory firms.
TITLE VII--LIABILITY FOR CERTAIN FAILURES TO DISCLOSE MATERIAL
INFORMATION OR MAKING OF MATERIAL MISSTATEMENTS
Sec. 3701. Liability for certain failures to disclose material
information or making of material
misstatements.
TITLE VIII--DUTIES OF INVESTMENT ADVISORS, ASSET MANAGERS, AND PENSION
FUNDS
Sec. 3801. Duties of investment advisors, asset managers, and pension
funds.
TITLE IX--PROTECTING AMERICANS' SAVINGS
Sec. 3901. Requirements related to proxy voting.
TITLE X--EMPOWERING SHAREHOLDERS
Sec. 3911. Proxy voting of passively managed funds.
TITLE XI--PROTECTING RETAIL INVESTORS' SAVINGS
Sec. 3921. Best interest based on pecuniary factors.
Sec. 3922. Study on climate change and other environmental disclosures
in municipal bond market.
Sec. 3923. Study on solicitation of municipal securities business.
TITLE I--PERFORMANCE OVER POLITICS
SEC. 3101. EXCLUSION OF CERTAIN SUBSTANTIALLY SIMILAR SHAREHOLDER
PROPOSALS.
The Securities and Exchange Commission shall revise the
resubmission requirements in section 240.14a-8(i)(12) of title 17, Code
of Federal Regulations, to provide that a shareholder proposal may be
excluded by an issuer from its proxy or consent solicitation material
for a meeting of the shareholders of such issuer if the shareholder
proposal addresses substantially the same subject matter as a proposal,
or proposals, previously included in the proxy or consent solicitation
material for a meeting of the shareholders of such issuer--
(1) for a meeting of the shareholders conducted in the
preceding 5 calendar years; and
(2) if the most recent vote--
(A) occurred in the preceding 3 calendar years; and
(B)(i) if voted on once during such 5-year period,
received less than 10 percent of the votes cast;
(ii) if voted on twice during such 5-year period,
received less than 20 percent of the votes cast; or
(iii) if voted on three or more times during such
5-year period, received less than 40 percent of the
votes cast.
TITLE II--NO EXPENSIVE, STIFLING GOVERNANCE
SEC. 3201. EXCLUSION OF CERTAIN SHAREHOLDER PROPOSALS.
(a) Exclusion of Certain Shareholder Proposals.--A shareholder
proposal submitted to an issuer pursuant to section 240.14a-8 of title
17, Code of Federal Regulations, may be excluded by an issuer from its
proxy or consent solicitation material for a meeting of the
shareholders of such issuer if the shareholder proposal--
(1) has been substantially implemented by the issuer by
implementing policies, practices, or procedures that compare
favorably with the guidelines of the proposal and address the
proposal's underlying concerns; or
(2) substantially duplicates by having the same principal
thrust or principal focus as another proposal previously
submitted to the issuer by another proponent that will be
included in such material.
(b) Nullification of Proposed Rule.--The Securities and Exchange
Commission may not finalize or apply the positions contained in the
proposed rule entitled ``Substantial Implementation, Duplication, and
Resubmission of Shareholder Proposals under Exchange Act Rule 14a-8''
(87 Fed. Reg. 45052), issue any substantially similar rule, or apply
any substantially similar rule, including with respect to a no-action
or other interpretive request.
TITLE III--EXCLUSION OF CERTAIN ESG SHAREHOLDER PROPOSALS
SEC. 3301. EXCLUSION OF CERTAIN ESG SHAREHOLDER PROPOSALS.
A shareholder proposal submitted to an issuer pursuant to section
240.14a-8 of title 17, Code of Federal Regulations, may be excluded by
an issuer from its proxy or consent solicitation material for a meeting
of the shareholders of such issuer if the subject matter of the
shareholder proposal is environmental, social, or political (or a
similar subject matter).
TITLE IV--EXCLUSIONS AVAILABLE REGARDLESS OF SIGNIFICANT SOCIAL POLICY
ISSUE
SEC. 3401. EXCLUSIONS AVAILABLE REGARDLESS OF SIGNIFICANT SOCIAL POLICY
ISSUE.
An issuer may exclude a shareholder proposal pursuant to section
240.14a-8(i) of title 17, Code of Federal Regulations, without regard
to whether such shareholder proposal relates to a significant social
policy issue.
TITLE V--CORPORATE GOVERNANCE EXAMINATION
SEC. 3501. STUDY OF CERTAIN ISSUES WITH RESPECT TO SHAREHOLDER
PROPOSALS, PROXY ADVISORY FIRMS, AND THE PROXY PROCESS.
Section 4(j) of the Securities Exchange Act of 1934 (15 U.S.C.
78d(j)) is amended by adding at the end the following:
``(10) Study of certain issues with respect to shareholder
proposals, proxy advisory firms, and the proxy process.--
``(A) In general.--Not later than 180 days after
the date of the enactment of this paragraph, and every
5 years thereafter, the Commission shall conduct a
comprehensive study on shareholder proposals, proxy
advisory firms, and the proxy process.
``(B) Scope of study.--The studies required under
subparagraph (A) shall cover--
``(i) the previous 10 years, with respect
to the initial study; and
``(ii) the previous 5 years, with respect
to each other study.
``(C) Contents.--Each study required under
subparagraph (A) shall address the following issues:
``(i) The financial and other incentives
and obligations of all groups involved in the
proxy process.
``(ii) A consideration of whether financial
and other incentives have created a process
that no longer serves the economic interests of
long-term retail investors.
``(iii) An analysis of whether regulations
and financial incentives have created and
protected the outsized influence of proxy
advisors or a duopoly in proxy advice, and if
so, what are the benefits and costs of that
outsized influence or duopoly.
``(iv) The costs incurred by issuers in
responding to politically-, environmentally-,
or socially-motivated shareholder proposals.
``(v) An assessment, including a cost-
benefit analysis, of the adequacy of the
current submission thresholds in Rule 14a-8 (17
CFR 240.14a-8) to ensure that shareholder
proponents have demonstrated a meaningful
economic stake in a company, which is
appropriate to effectively serve markets and
shareholders at large.
``(vi) An examination of the extent to
which the politicization of the shareholder
proposal process is increasing the operating
costs of public companies.
``(vii) An analysis of the impact that
shareholder proposals have on discouraging
private companies from going public.
``(viii) An evaluation of the risk that
shareholder proposals may contribute to the
balkanization of the U.S. economy over time.
``(ix) A thorough assessment of the
economic analysis, if any, conducted by proxy
advisory firms and institutional shareholders
when recommending or voting in favor of
shareholder proposals.
``(x) A review of the extent to which
institutional investors, who owe fiduciary
duties, rely on proxy advisory firm
recommendations.
``(xi) An assessment of whether, in light
of their significant influence on corporate
actions and vote outcomes, proxy advisors are
subject to sufficient and effective regulation
to ensure that their policies and
recommendations are accurate, free of
conflicts, and benefit the economic best
interest of shareholders at large.
``(D) Report.--At the completion of each study
required under subparagraph (A) the Commission shall
issue a report to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives that
includes the results of the study.''.
TITLE VI--REGISTRATION OF PROXY ADVISORY FIRMS
SEC. 3601. REGISTRATION OF PROXY ADVISORY FIRMS.
(a) Amendment.--The Securities Exchange Act of 1934 (15 U.S.C. 78a
et seq.) is amended by inserting after section 15G the following new
section:
``SEC. 15H. REGISTRATION OF PROXY ADVISORY FIRMS.
``(a) Conduct Prohibited.--It shall be unlawful for a proxy
advisory firm to make use of the mails or any means or instrumentality
of interstate commerce to provide proxy voting advice, research,
analysis, ratings or recommendations to any client, unless such proxy
advisory firm is registered under this section.
``(b) Registration Procedures.--
``(1) Application for registration.--
``(A) In general.--A proxy advisory firm shall file
with the Commission an application for registration, in
such form as the Commission shall require, by rule, and
containing the information described in subparagraph
(B).
``(B) Required information.--An application for
registration under this section shall contain--
``(i) a certification that the applicant is
able to consistently provide proxy advice based
on accurate information;
``(ii) with respect to clients of the
applicant that vote shares held on behalf of
shareholders, a certification that the
applicant--
``(I) will provide proxy voting
advice only in the best economic
interest of those shareholders; and
``(II) has the requisite expertise
to ensure that voting recommendations
are in the best economic interest of
those shareholders;
``(iii) information on the procedures and
methodologies that the applicant uses to ensure
that proxy voting recommendations are in the
best economic interest of the ultimate
shareholders;
``(iv) information on the organizational
structure of the applicant;
``(v) an explanation of whether or not the
applicant has in effect a code of ethics, and
if not, the reasons therefor;
``(vi) a description of any potential or
actual conflict of interest relating to the
provision of proxy advisory services, including
those arising out of or resulting from the
ownership structure of the applicant or the
provision of other services by the applicant or
any person associated with the applicant;
``(vii) the policies and procedures in
place to publicly disclose and manage conflicts
of interest under subsection (f);
``(viii) information related to the
professional and academic qualifications of
staff tasked with providing proxy advisory
services; and
``(ix) any other information and documents
concerning the applicant and any person
associated with such applicant as the
Commission, by rule, may prescribe as necessary
or appropriate in the public interest or for
the protection of investors.
``(2) Review of application.--
``(A) Initial determination.--Not later than 90
days after the date on which the application for
registration is filed with the Commission under
paragraph (1) (or within such longer period as to which
the applicant consents) the Commission shall--
``(i) by order, grant registration; or
``(ii) institute proceedings to determine
whether registration should be denied.
``(B) Conduct of proceedings.--
``(i) Content.--Proceedings referred to in
subparagraph (A)(ii) shall--
``(I) include notice of the grounds
for denial under consideration and an
opportunity for hearing; and
``(II) be concluded not later than
120 days after the date on which the
application for registration is filed
with the Commission under paragraph
(1).
``(ii) Determination.--At the conclusion of
such proceedings, the Commission, by order,
shall grant or deny such application for
registration.
``(iii) Extension authorized.--The
Commission may extend the time for conclusion
of such proceedings for not longer than 90
days, if the Commission finds good cause for
such extension and publishes its reasons for so
finding, or for such longer period as to which
the applicant consents.
``(C) Grounds for decision.--The Commission shall
grant registration under this subsection--
``(i) if the Commission finds that the
requirements of this section are satisfied; and
``(ii) unless the Commission finds (in
which case the Commission shall deny such
registration) that--
``(I) the applicant has failed to
certify to the Commission's
satisfaction that it is able to
consistently provide proxy advice based
on accurate information and to
materially comply with the procedures
and methodologies disclosed under
paragraph (1)(B) and with subsections
(f) and (g); or
``(II) if the applicant were so
registered, its registration would be
subject to suspension or revocation
under subsection (d).
``(3) Public availability of information.--Subject to
section 24, the Commission shall make the information and
documents submitted to the Commission by a proxy advisory firm
in its completed application for registration, or in any
amendment submitted under paragraph (1) or (2) of subsection
(c), publicly available on the Commission's website, or through
another comparable, readily accessible means.
``(c) Update of Registration.--
``(1) Update.--Each registered proxy advisory firm shall
promptly amend and update its application for registration
under this section if any information or document provided
therein becomes materially inaccurate, except that a registered
proxy advisory firm is not required to amend the information
required to be filed under subsection (b)(1)(B)(i) by filing
information under this paragraph, but shall amend such
information in the annual submission of the organization under
paragraph (2) of this subsection.
``(2) Certification.--Not later than 90 calendar days after
the end of each calendar year, each registered proxy advisory
firm shall file with the Commission an amendment to its
registration, in such form as the Commission, by rule, may
prescribe as necessary or appropriate in the public interest or
for the protection of investors--
``(A) certifying that the information and documents
in the application for registration of such registered
proxy advisory firm continue to be accurate in all
material respects; and
``(B) listing any material change that occurred to
such information or documents during the previous
calendar year.
``(d) Censure, Denial, or Suspension of Registration; Notice and
Hearing.--The Commission, by order, shall censure, place limitations on
the activities, functions, or operations of, suspend for a period not
exceeding 12 months, or revoke the registration of any registered proxy
advisory firm if the Commission finds, on the record after notice and
opportunity for hearing, that such censure, placing of limitations,
suspension, or revocation is necessary for the protection of investors
and in the public interest and that such registered proxy advisory
firm, or any person associated with such an organization, whether prior
to or subsequent to becoming so associated--
``(1) has committed or omitted any act, or is subject to an
order or finding, enumerated in subparagraph (A), (D), (E),
(H), or (G) of section 15(b)(4), has been convicted of any
offense specified in section 15(b)(4)(B), or is enjoined from
any action, conduct, or practice specified in subparagraph (C)
of section 15(b)(4), during the 10-year period preceding the
date of commencement of the proceedings under this subsection,
or at any time thereafter;
``(2) has been convicted during the 10-year period
preceding the date on which an application for registration is
filed with the Commission under this section, or at any time
thereafter, of--
``(A) any crime that is punishable by imprisonment
for 1 or more years, and that is not described in
section 15(b)(4)(B); or
``(B) a substantially equivalent crime by a foreign
court of competent jurisdiction;
``(3) is subject to any order of the Commission barring or
suspending the right of the person to be associated with a
registered proxy advisory firm;
``(4) fails to furnish the certifications required under
subsections (b)(2)(C)(ii)(I) and (c)(2);
``(5) has engaged in one or more prohibited acts enumerated
in paragraph (1);
``(6) fails to maintain adequate financial and managerial
resources to consistently offer advisory services to clients
that vote shares held on behalf of shareholders consistent with
the best economic interest of those shareholders, including by
failing to comply with subsections (f) or (g);
``(7) fails to maintain adequate expertise to ensure that
proxy advisory services for clients that vote shares held on
behalf of shareholders are tied to the best economic interest
of those shareholders; or
``(8) engages in a prohibited act enumerated in subsection
(j).
``(e) Termination of Registration.--
``(1) Voluntary withdrawal.--A registered proxy advisory
firm may, upon such terms and conditions as the Commission may
establish as necessary in the public interest or for the
protection of investors, which terms and conditions shall
include at a minimum that the registered proxy advisory firm
will no longer conduct such activities as to bring it within
the definition of proxy advisory firm in section 3(a)(82),
withdraw from registration by filing a written notice of
withdrawal to the Commission.
``(2) Commission authority.--In addition to any other
authority of the Commission under this title, if the Commission
finds that a registered proxy advisory firm is no longer in
existence or has ceased to do business as a proxy advisory
firm, the Commission, by order, shall cancel the registration
under this section of such registered proxy advisory firm.
``(f) Management of Conflicts of Interest.--
``(1) Organization policies and procedures.--Each
registered proxy advisory firm shall establish, maintain, and
enforce written policies and procedures reasonably designed,
taking into consideration the nature of the business of such
registered proxy advisory firm and associated persons, to
publicly disclose and manage any conflicts of interest that
arise or would reasonably be expected to arise from such
business.
``(2) Commission authority.--The Commission shall, within
one year of the date of enactment of this section, issue final
rules to prohibit, or require the management and public
disclosure of, any conflicts of interest relating to the
offering of proxy advisory services by a registered proxy
advisory firm, including, without limitation, conflicts of
interest relating to--
``(A) the manner in which a registered proxy
advisory firm is compensated by the client, any
affiliate of the client, or any other person for
providing proxy advisory services;
``(B) business relationships, ownership interests,
or any other financial or personal interests between a
registered proxy advisory firm, or any person
associated with such registered proxy advisory firm,
and any client, or any affiliate of such client;
``(C) the formulation of proxy voting policies;
``(D) the execution, or assistance with the
execution, of proxy votes if such votes are based upon
recommendations made by the proxy advisory firm in
which a person other than the issuer is a proponent;
and
``(E) any other potential conflict of interest, as
the Commission deems necessary or appropriate in the
public interest or for the protection of investors.
``(3) Disclosure on factors influencing recommendations.--
Each registered proxy advisory firm shall annually disclose to
the Commission and make publicly available the economic and
other factors that a reasonable investor would expect to
influence the recommendations of such proxy advisory firm,
including the ownership composition of such proxy advisory firm
and any meetings with, or feedback received from, outside
entities.
``(g) Reliability of Proxy Advisory Firm Services.--
``(1) In general.--Each registered proxy advisory firm
shall--
``(A) have staff and other resources sufficient to
produce proxy voting recommendations that are based on
accurate and current information and designed for
clients that vote shares held on behalf of shareholders
to advance the best economic interest of those
shareholders;
``(B) implement procedures that permit issuers that
are the subject of proxy voting recommendations--
``(i) access in a reasonable time to data
and information used to make recommendations;
and
``(ii) a reasonable opportunity to provide
meaningful comment and corrections to such data
and information, including the opportunity to
present (in person or telephonically) details
to the person responsible for developing such
data and information prior to the publication
of proxy voting recommendations to clients;
``(C) employ an ombudsman to receive complaints
about the accuracy of information used in making
recommendations from the companies that are the subject
of the proxy advisory firm's voting recommendations and
seek to resolve those complaints in a timely fashion
and prior to the publication of proxy voting
recommendations to clients; and
``(D) if the ombudsman is unable to resolve a
complaint to a company's satisfaction prior to the
publication of proxy voting recommendations to clients,
include in the final report of the firm to clients--
``(i) a statement detailing the company's
complaints, if requested in writing by the
company; and
``(ii) a statement explaining why the proxy
voting recommendation is in the best economic
interest of shareholders.
``(2) Definitions.--In this subsection:
``(A) Data and information used to make
recommendations.--The term `data and information used
to make voting recommendations'--
``(i) means the financial, operational, or
descriptive data and information on an issuer
used by proxy advisory firms and any contextual
or substantive analysis impacting the
recommendation; and
``(ii) does not include the entirety of the
proxy advisory firm's final report to its
clients.
``(B) Reasonable time.--The term `reasonable
time'--
``(i) means not less than 1 week before the
publication of proxy voting recommendations for
clients; and
``(ii) shall not otherwise interfere with a
proxy advisory firm's ability to provide its
clients with timely access to accurate proxy
voting research, analysis, or recommendations.
``(h) Private Right of Action With Respect to Illegal
Recommendations.--Any proxy advisory firm that endorses a proposal that
is not supported by the issuer but is approved and subsequently found
by a court of competent jurisdiction to violate State or Federal law
shall be liable to the applicable issuer for the costs associated with
the approval of such proposal, including implementation costs and any
penalties incurred by the issuer.
``(i) Designation of Compliance Officer.--Each registered proxy
advisory firm shall designate an individual who reports directly to
senior management as responsible for administering the policies and
procedures that are required to be established pursuant to subsections
(f) and (g), and for ensuring compliance with the securities laws and
the rules and regulations thereunder, including those promulgated by
the Commission pursuant to this section.
``(j) Prohibited Conduct.--
``(1) Prohibited acts and practices.--Not later than one
year after the date of enactment of this section, the
Commission shall issue final rules to prohibit any act or
practice relating to the offering of proxy advisory services by
a registered proxy advisory firm that the Commission determines
to be unfair, coercive, or abusive, including any act or
practice relating to--
``(A) advisory or consulting services (offered
directly or indirectly, including through an affiliate)
related to corporate governance issues; or
``(B) modifying a voting recommendation or
otherwise departing from its adopted systematic
procedures and methodologies in the provision of proxy
advisory services, based on whether an issuer, or
affiliate thereof, subscribes or will subscribe to
other services or product of the registered proxy
advisory firm or any person associated with such
organization.
``(2) Rule of construction.--Nothing in paragraph (1), or
in any rules or regulations adopted thereunder, may be
construed to modify, impair, or supersede the operation of any
of the antitrust laws (as defined in the first section of the
Clayton Act, except that such term includes section 5 of the
Federal Trade Commission Act, to the extent that such section 5
applies to unfair methods of competition).
``(k) Statements of Financial Condition.--Each registered proxy
advisory firm shall, on a confidential basis, file with the Commission,
at intervals determined by the Commission, such financial statements,
certified (if required by the rules or regulations of the Commission)
by an independent public auditor, and information concerning its
financial condition, as the Commission, by rule, may prescribe as
necessary or appropriate in the public interest or for the protection
of investors.
``(l) Annual Report.--
``(1) In general.--Each registered proxy advisory firm
shall, not later than 90 calendar days after the end of each
fiscal year, file with the Commission and make publicly
available an annual report in such form as the Commission, by
rule, may prescribe as necessary or appropriate in the public
interest or for the protection of investors.
``(2) Contents.--Each annual report required under
paragraph (1) shall include, at a minimum, disclosure by the
registered proxy advisory firm of the following:
``(A) A list of shareholder proposals the staff of
the registered proxy advisory firm reviewed in the
prior fiscal year.
``(B) A list of the recommendations made in the
prior fiscal year.
``(C) The economic analysis conducted to determine
that final recommendations provided in the prior fiscal
year (other than recommendations relating to an issuer-
sponsored proposal or recommendations consistent with
that of a board of directors composed of a majority of
independent directors) delivered to clients that vote
shares held on behalf of shareholders were in the best
economic interest of those shareholders.
``(D) The staff who reviewed and made
recommendations on such proposals in the prior fiscal
year.
``(E) The qualifications of such staff to ensure
that each of the recommendations for clients that vote
shares held on behalf of shareholders were tied to the
best economic interest of those shareholders.
``(F) The recommendations made in the prior fiscal
year where the proponent of such recommendation was a
client of or received services from the proxy advisory
firm.
``(G) A certification by the chief executive
officer, chief financial officer, and the primary
executive responsible for overseeing the compilation
and dissemination of proxy voting advice that the final
recommendations (other than recommendations relating to
an issuer-sponsored proposal or recommendations
consistent with that of a board of directors composed
of a majority of independent directors) delivered to
clients that vote shares held on behalf of shareholders
in the last fiscal year--
``(i) were based on internal controls and
procedures that are designed to ensure accurate
information and that such internal controls and
procedures are effective;
``(ii) do not violate applicable State or
Federal law; and
``(iii) were based on the best economic
interest of those shareholders.
``(H) The economic and other factors that a
reasonable investor would expect to influence the
recommendations of such proxy advisory firm, including
the ownership composition of such proxy advisory firm.
``(m) Transparent Policies.--Each registered proxy advisory firm
shall file with the Commission and make publicly available its
methodology for the formulation of proxy voting policies and voting
recommendations to clients that vote shares held on behalf of
shareholders and how that methodology ensures that the firm's voting
recommendations are in the best economic interest of those
shareholders.
``(n) Rules of Construction.--Registration under and compliance
with this section does not constitute a waiver of, or otherwise
diminish, any right, privilege, or defense that a registered proxy
advisory firm may otherwise have under any provision of State or
Federal law, including any rule, regulation, or order thereunder.
``(o) Regulations.--
``(1) New provisions.--Such rules and regulations as are
required by this section or are otherwise necessary to carry
out this section, including the application form required under
subsection (a)--
``(A) shall be issued by the Commission, not later
than 180 days after the date of enactment of this
section; and
``(B) shall become effective not later than 1 year
after the date of enactment of this section.
``(2) Review of existing regulations.--Not later than 270
days after the date of enactment of this section, the
Commission shall--
``(A) review its existing rules and regulations
which affect the operations of proxy advisory firms;
and
``(B) amend or revise such rules and regulations in
accordance with the purposes of this section, and issue
such guidance as the Commission may prescribe as
necessary or appropriate in the public interest or for
the protection of investors.
``(p) Applicability.--This section, other than subsection (n),
which shall apply on the date of enactment of this section, shall apply
on the earlier of--
``(1) the date on which regulations are issued in final
form under subsection (o)(1); or
``(2) 270 days after the date of enactment of this section.
``(q) Best Economic Interest Defined.--In this section, the term
`best economic interest' means decisions that seek to maximize
investment returns over a time horizon consistent with the investment
objectives and risk management profile of the fund in which the
shareholders are invested.''.
(b) Conforming Amendment.--Section 17(a)(1) of the Securities
Exchange Act of 1934 (15 U.S.C. 78q(a)(1)) is amended by inserting
``proxy advisory firm,'' after ``nationally recognized statistical
rating organization,''.
(c) Proxy Advisory Firm Definitions.--Section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended--
(1) by redesignating the second paragraph (80) (relating to
funding portal) as paragraph (81); and
(2) by adding at the end the following:
``(82) Proxy advisory firm.--The term `proxy advisory
firm'--
``(A) means any person who is primarily engaged in
the business of providing proxy voting advice,
research, analysis, ratings, or recommendations to
clients, which conduct constitutes a solicitation
within the meaning of section 14; and
``(B) does not include any person that is exempt
under law or regulation from the requirements otherwise
applicable to persons engaged in such a solicitation.
``(83) Person associated with a proxy advisory firm.--With
respect to a proxy advisory firm--
``(A) a person is `associated' with the proxy
advisory firm if the person is--
``(i) a partner, officer, or director of
the proxy advisory firm (or any person
occupying a similar status or performing
similar functions);
``(ii) a person directly or indirectly
controlling, controlled by, or under common
control with the proxy advisory firm;
``(iii) an employee of the proxy advisory
firm; or
``(iv) a person the Commission determines
by rule is controlled by the proxy advisory
firm; and
``(B) a person is not `associated' with the proxy
advisory firm if the person only performs clerical or
ministerial functions with respect to a proxy advisory
firm.''.
TITLE VII--LIABILITY FOR CERTAIN FAILURES TO DISCLOSE MATERIAL
INFORMATION OR MAKING OF MATERIAL MISSTATEMENTS
SEC. 3701. LIABILITY FOR CERTAIN FAILURES TO DISCLOSE MATERIAL
INFORMATION OR MAKING OF MATERIAL MISSTATEMENTS.
Section 14 of the Securities Exchange Act of 1934 (15 U.S.C. 78n)
is amended by adding at the end the following:
``(l) False or Misleading Statements.--For purposes of section 18,
the failure to disclose material information (such as a proxy voting
advice business's methodology, sources of information, or conflicts of
interest) or the making of a material misstatement regarding proxy
voting advice that makes a recommendation to a security holder as to
the security holder's vote, consent, or authorization on a specific
matter for which security holder approval is solicited, and that is
furnished by a person that markets the person's expertise as a provider
of such proxy voting advice separately from other forms of investment
advice, and sells such proxy voting advice for a fee, shall be
considered to be false or misleading with respect to a material
fact.''.
TITLE VIII--DUTIES OF INVESTMENT ADVISORS, ASSET MANAGERS, AND PENSION
FUNDS
SEC. 3801. DUTIES OF INVESTMENT ADVISORS, ASSET MANAGERS, AND PENSION
FUNDS.
Section 13(f) of the Securities Exchange Act of 1934 (15 U.S.C.
78m(f)) is amended by adding at the end the following:
``(7) Disclosures by institutional investment managers in
connection with proxy advisory firms.--
``(A) In general.--Every institutional investment
manager which uses the mails, or any means or
instrumentality of interstate commerce in the course of
its business as an institutional investment manager,
which engages a proxy advisory firm, and which
exercises voting power with respect to accounts holding
equity securities of a class described in subsection
(d)(1) or otherwise becomes or is deemed to become a
beneficial owner of any security of a class described
in subsection (d)(1) upon the purchase or sale of a
security-based swap that the Commission may define by
rule, shall file an annual report with the Commission
containing--
``(i) an explanation of how the
institutional investment manager voted with
respect to each shareholder proposal;
``(ii) the percentage of votes cast on
shareholder proposals that were consistent with
proxy advisory firm recommendations, for each
proxy advisory firm retained by the
institutional investment manager;
``(iii) an explanation of--
``(I) how the institutional
investment manager took into
consideration proxy advisory firm
recommendations in making voting
decisions, including the degree to
which the institutional investment
manager used those recommendations in
making voting decisions;
``(II) how often the institutional
investment manager voted consistent
with a recommendation made by a proxy
advisory firm, expressed as a
percentage;
``(III) how such votes are
reconciled with the fiduciary duty of
the institutional investment manager to
vote in the best economic interests of
shareholders;
``(IV) how frequently votes were
changed when an error occurred or due
to new information from issuers; and
``(V) the degree to which
investment professionals of the
institutional investment manager were
involved in proxy voting decisions; and
``(iv) a certification that the voting
decisions of the institutional investment
manager were based solely on the best economic
interest of the shareholders on behalf of whom
the institutional investment manager holds
shares.
``(B) Requirements for larger institutional
investment managers.--Every institutional investment
manager described in subparagraph (A) that has assets
under management with an aggregate fair market value on
the last trading day in any of the preceding twelve
months of at least $100,000,000,000 shall--
``(i) in any materials provided to
customers and related to customers voting their
shares, clarify that shareholders are not
required to vote on every proposal;
``(ii) with respect to each shareholder
proposal for which the institutional investment
manager votes (other than votes consistent with
the recommendation of a board of directors
composed of a majority of independent
directors) perform an economic analysis before
making such vote, to determine that the vote is
in the best economic interest of the
shareholders on behalf of whom the
institutional investment manager holds shares;
and
``(iii) include each economic analysis
required under clause (ii) in the annual report
required under subparagraph (A).
``(C) Best economic interest defined.--In this
paragraph, the term `best economic interest' means
decisions that seek to maximize investment returns over
a time horizon consistent with the investment
objectives and risk management profile of the fund in
which shareholders are invested.''.
TITLE IX--PROTECTING AMERICANS' SAVINGS
SEC. 3901. REQUIREMENTS RELATED TO PROXY VOTING.
Section 14 of the Securities Exchange Act of 1934 (15 U.S.C. 78n),
as amended by section 3701, is further amended by adding at the end the
following:
``(m) Prohibition on Robovoting.--
``(1) In general.--The Commission shall issue final rules
prohibiting the use of robovoting with respect to votes related
to proxy or consent solicitation materials.
``(2) Robovoting defined.--In this subsection, the term
`robovoting' means the practice of automatically voting in a
manner consistent with the recommendations of a proxy advisory
firm or pre-populating votes on a proxy advisory firm's
electronic voting platform with the proxy advisory firm's
recommendations, in either case, without independent review and
analysis.
``(n) Prohibition on Outsourcing Voting Decisions by Institutional
Investors.--With respect to votes related to proxy or consent
solicitation materials, an institutional investor may not outsource
voting decisions to any person other than an investment adviser or a
broker or dealer that is registered with the Commission and has a
fiduciary or best interest duty to the institutional investor.
``(o) No Requirement to Vote.--No person may be required to cast
votes related to proxy or consent solicitation materials.
``(p) Proxy Advisory Firm Calculation of Votes.--With respect to
votes related to proxy or consent solicitation materials with respect
to an issuer, a proxy advisor firm shall calculate the vote result
consistent with the law of the State in which the issuer is
incorporated.''.
TITLE X--EMPOWERING SHAREHOLDERS
SEC. 3911. PROXY VOTING OF PASSIVELY MANAGED FUNDS.
(a) In General.--The Investment Advisers Act of 1940 (15 U.S.C.
80b-1 et seq.) is amended by inserting after section 208 (15 U.S.C.
80b-8) the following:
``SEC. 208A. PROXY VOTING OF PASSIVELY MANAGED FUNDS.
``(a) Investment Adviser Proxy Voting.--
``(1) In general.--An investment adviser that holds
authority to vote a proxy solicited by an issuer pursuant to
section 14 of the Securities Exchange Act of 1934 (15 U.S.C.
78n) in connection with any vote of covered securities held by
a passively managed fund shall--
``(A) vote in accordance with the instructions of
the beneficial owner of a voting security of the
passively managed fund;
``(B) vote in accordance with the voting
recommendations of such issuer; or
``(C) abstain from voting but make reasonable
efforts to be considered present for purposes of
establishing a quorum.
``(2) Exception.--Paragraph (1) shall not apply with
respect to a vote on a routine matter.
``(b) Safe Harbor.--With respect to a matter that is not a routine
matter, in the case of a vote described in subsection (a)(1), an
investment adviser shall not be liable to any person under any law or
regulation of the United States, any constitution, law, or regulation
of any State or political subdivision thereof, or under any contract or
other legally enforceable agreement (including any arbitration
agreement), for any of the following:
``(1) Voting in accordance with the instructions of the
beneficial owner of a voting security of the passively managed
fund.
``(2) Not soliciting voting instructing from any person
under subsection (a)(1) with respect to such vote.
``(3) Voting in accordance with the voting recommendations
of an issuer pursuant to subparagraph (B) of such subsection.
``(4) Abstaining from voting in accordance with
subparagraph (C) of such subsection.
``(c) Foreign Private Issuers Exemption.--Subsection (a) shall not
apply with respect to a foreign private issuer if the voting policy of
the investment advisor with respect to such foreign private issuers is
fully and fairly disclosed to beneficial owners, including the extent
to which such policy differs from the voting policy for non-exempt
issuers.
``(d) Definitions.--In this section:
``(1) Covered security.--The term `covered security'--
``(A) means a voting security, as that term is
defined in section 2(a) of the Investment Company Act
of 1940 (15 U.S.C. 80a-2(a)), in which a qualified fund
is invested; and
``(B) does not include any voting security (as
defined in subparagraph (A)) of an issuer registered
with the Commission as an investment company under
section 8 of the Investment Company Act of 1940 (15
U.S.C. 80a-8).
``(2) Passively managed fund.--The term `passively managed
fund' means a qualified fund that--
``(A) is designed to track, or is derived from, an
index of securities or a portion of such an index;
``(B) discloses that the qualified fund is a
passive index fund; or
``(C) allocates not less than 60 percent of the
total assets of the qualified fund to an investment
strategy that is designed to track, or is derived from,
an index of securities or a portion of such an index
fund.
``(3) Qualified fund.--The term `qualified fund' means--
``(A) an investment company, as that term is
defined in section 3 of the Investment Company Act of
1940 (15 U.S.C. 80a-3);
``(B) a private fund;
``(C) an eligible deferred compensation plan, as
that term is defined in section 457(b) of the Internal
Revenue Code of 1986;
``(D) a trust, plan, account, or other entity
described in section 3(c)(11) of the Investment Company
Act of 1940 (15 U.S.C. 80a-3(c)(11));
``(E) a plan maintained by an employer described in
clause (i), (ii), or (iii) of section 403(b)(1)(A) of
the Internal Revenue Code of 1986 to provide annuity
contracts described in section 403(b) of such Code;
``(F) a common trust fund, or similar fund,
maintained by a bank;
``(G) any fund established under section 8438(b)(1)
of title 5, United States Code; or
``(H) any separate managed account of a client of
an investment adviser.
``(4) Registrant.--The term `registrant' means an issuer of
covered securities.
``(5) Routine matter.--The term `routine matter'--
``(A) includes a proposal that relates to--
``(i) an election with respect to the board
of directors of the registrant;
``(ii) the compensation of management or
the board of directors of the registrant;
``(iii) the selection of auditors;
``(iv) a matter where there is a material
conflict of interest between or among the
issuer, members of management, members of the
board of directors, or an affiliate of the
issuer;
``(v) declassification; or
``(vi) transactions that would transform
the structure of the registrant, including--
``(I) a merger or consolidation;
and
``(II) the sale, lease, or exchange
of all, or substantially all, of the
property and assets of a registrant;
and
``(B) does not include--
``(i) a proposal that is not submitted to a
holder of covered securities by means of a
proxy statement comparable to that described in
section 240.14a-101 of title 17, Code of
Federal Regulations, or any successor
regulation; or
``(ii) a proposal that is--
``(I) the subject of a counter-
solicitation; or
``(II) part of a proposal made by a
person other than the applicable
registrant.''.
(b) Effective Date.--The amendment made by this section shall take
effect on the first August 1 that occurs after the date that is 2 years
after the date of enactment of this Act.
TITLE XI--PROTECTING RETAIL INVESTORS' SAVINGS
SEC. 3921. BEST INTEREST BASED ON PECUNIARY FACTORS.
(a) In General.--Section 211(g) of the Investment Advisers Act of
1940 (15 U.S.C. 80b-11(g)) is amended by adding at the end the
following:
``(3) Best interest based on pecuniary factors.--
``(A) In general.--For purposes of paragraph (1),
the best interest of a customer shall be determined
using pecuniary factors, which may not be subordinated
to or limited by non-pecuniary factors, unless the
customer provides informed consent, in writing, that
such non-pecuniary factors be considered.
``(B) Disclosure of pecuniary factors.--If a
customer provides a broker, dealer, or investment
adviser with the informed consent to consider non-
pecuniary factors described under subparagraph (A), the
broker, dealer, or investment adviser shall--
``(i) disclose the expected pecuniary
effects to the customer over a time period
selected by the customer and not to exceed
three years; and
``(ii) at the end of the time period
described in clause (i), disclose, by
comparison to a reasonably comparable index or
basket of securities selected by the customer,
the actual pecuniary effects of that time
period, including all fees, costs, and other
expenses incurred to consider non-pecuniary
factors.
``(C) Pecuniary factor defined.--In this paragraph,
the term `pecuniary factor' means a factor that a
fiduciary prudently determines is expected to have a
material effect on the risk or return of an investment
based on appropriate investment horizons.''.
(b) Rulemaking.--Not later than the end of the 12-month period
beginning on the date of enactment of this Act, the Securities and
Exchange Commission shall revise or issue such rules as may be
necessary to implement the amendment made by subsection (a).
(c) Applicability.--The amendment made by subsection (a) shall
apply to actions taken by a broker, dealer, or investment adviser
beginning on the date that is 12 months after the date of enactment of
this Act.
SEC. 3922. STUDY ON CLIMATE CHANGE AND OTHER ENVIRONMENTAL DISCLOSURES
IN MUNICIPAL BOND MARKET.
(a) In General.--The Securities and Exchange Commission shall--
(1) conduct a study to determine the extent to which
issuers of municipal securities (as such term is defined in
section 3(a)(29) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)(29)) make disclosures to investors regarding
climate change and other environmental matters; and
(2) solicit public comment with respect to such study.
(b) Contents.--The study required under subsection (a) shall
consider and analyze--
(1) the frequency with which disclosures described in
subsection (a)(1) are made;
(2) whether such disclosures made by issuers of municipal
securities in connection with offerings of securities align
with such disclosures made by issuers of municipal securities
in other contexts or to audiences other than investors;
(3) any voluntary or mandatory disclosure standards
observed by issuers of municipal securities in the course of
making such disclosures;
(4) the degree to which investors consider such disclosures
in connection with making an investment decision; and
(5) such other information as the Securities and Exchange
Commission determines appropriate.
(c) Report.--Not later than 1 year after the date of the enactment
of this Act, the Securities and Exchange Commission shall submit to the
Committee on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives a
report that includes--
(1) the results of the study required under this section;
(2) a detailed discussion of the financial risks to
investors from investments in municipal securities;
(3) whether such risks are adequately disclosed to
investors; and
(4) recommended regulatory or legislative steps to address
any concerns identified in the study.
SEC. 3923. STUDY ON SOLICITATION OF MUNICIPAL SECURITIES BUSINESS.
(a) In General.--The Securities and Exchange Commission shall--
(1) conduct a study on the effectiveness of each covered
rule in preventing the payment of funds to elected officials or
candidates for elected office in exchange for the receipt of
government business in connection with the offer or sale of
municipal securities; and
(2) solicit public comment with respect to such study.
(b) Contents.--The study required under subsection (a) shall
consider and analyze--
(1) the effectiveness of each covered rule, including
whether each covered rule accomplishes the intended effect of
such covered rule and has any unintended adverse effects;
(2) the frequency and scope of enforcement actions
undertaken pursuant to each covered rule;
(3) the degree to which--
(A) persons subject to each covered rule--
(i) have in effect policies and procedures
intended to ensure compliance with each such
covered rule; and
(ii) are disadvantaged from participating
in the political process generally and in
relation to persons who solicit or receive
government business or government licenses,
permits, and approvals other than in connection
with the offer or sale of municipal securities;
and
(B) other State and Federal laws and regulations
impact the solicitation of municipal securities
business; and
(4) such other information as the Securities and Exchange
Commission determines appropriate.
(c) Report.--Not later than 1 year after the date of the enactment
of this Act, the Securities and Exchange Commission shall submit to the
Committee on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives a
report that includes--
(1) the results of the study required under this section;
(2) an analysis of the extent to which persons affiliated
with small businesses, as well as persons affiliated with
minority and women opened businesses, have been affected by the
covered rules; and
(3) recommended regulatory or legislative steps to address
any concerns identified in the study.
(d) Definitions.--In this section:
(1) Covered rule.--The term ``covered rule'' means--
(A) Rule G-38 of the Municipal Securities
Rulemaking Board; and
(B) Rule 206(4)-5 (17 CFR 275.206(4)-5).
(2) Municipal securities.--The term ``municipal
securities'' has the meaning given the term in section 3(a)(29)
of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(29)).
DIVISION D--AMERICAN FIRST ACT OF 2023
SEC. 4001. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This division may be cited as the ``American
Financial Institution Regulatory Sovereignty and Transparency Act of
2023'' or the ``American FIRST Act of 2023''.
(b) Table of Contents.--The table of contents for this division is
as follows:
Sec. 4001. Short title; Table of contents.
TITLE I--STOP EXECUTIVE CAPTURE OF BANKING REGULATORS
Sec. 4101. Report on the implementation of recommendations from the
FSOC Chairperson and Executive Orders.
TITLE II--ENSURING U.S. AUTHORITY OVER U.S. BANKING REGULATIONS
Sec. 4201. Requirements in connection with rulemakings implementing
policies of non-governmental international
organizations.
Sec. 4202. Report on certain climate-related interactions with covered
international organizations.
TITLE III--BANKING REGULATOR INTERNATIONAL REPORTING
Sec. 4301. Reporting on interactions with non-governmental
international organizations.
TITLE IV--SUPERVISION REFORM
Sec. 4401. Removal of the Vice Chairman for Supervision designation.
TITLE I--STOP EXECUTIVE CAPTURE OF BANKING REGULATORS
SEC. 4101. REPORT ON THE IMPLEMENTATION OF RECOMMENDATIONS FROM THE
FSOC CHAIRPERSON AND EXECUTIVE ORDERS.
(a) Board of Governors of the Federal Reserve System.--Section 10
of the Federal Reserve Act (12 U.S.C. 247b), as amended by section
4401(b), is further amended by adding at the end the following:
``(11) Report on the implementation of recommendations from
the fsoc chairperson and executive orders.--The Board of
Governors of the Federal Reserve System may not implement a
non-binding recommendation made by the Chairperson of the
Financial Stability Oversight Council or contained in an
Executive Order unless the Board of Governors first provides
the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate with--
``(A) notice that the Board of Governors intends to
implement such recommendation;
``(B) a report containing the proposed
implementation by the Board of Governors and a
justification for such implementation; and
``(C) upon request, not later than the end of the
120-day period beginning on the date of the notice
under subparagraph (A), testimony on such proposed
implementation.''.
(b) Office of the Comptroller of the Currency.--Section 324 of the
Revised Statutes of the United States (12 U.S.C. 1) is amended by
adding at the end the following:
``(c) Report on the Implementation of Recommendations From the FSOC
Chairperson and Executive Orders.--The Comptroller of the Currency may
not implement a non-binding recommendation made by the Chairperson of
the Financial Stability Oversight Council or contained in an Executive
Order unless the Comptroller of the Currency first provides the
Committee on Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate with--
``(1) notice that the Comptroller of the Currency intends
to implement such recommendation;
``(2) a report containing the proposed implementation by
the Comptroller of the Currency and a justification for such
implementation; and
``(3) upon request, not later than the end of the 120-day
period beginning on the date of the notice under paragraph (1),
testimony on such proposed implementation.''.
(c) Federal Deposit Insurance Corporation.--Section 2 of the
Federal Deposit Insurance Act (12 U.S.C. 1812) is amended by inserting
after subsection (f) the following:
``(g) Report on the Implementation of Recommendations From the FSOC
Chairperson and Executive Orders.--The Board of Directors of the
Corporation may not implement a non-binding recommendation made by the
Chairperson of the Financial Stability Oversight Council or contained
in an Executive Order unless the Board of Directors first provides the
Committee on Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate with--
``(1) notice that the Board of Directors intends to
implement such recommendation;
``(2) a report containing the proposed implementation by
the Board of Directors and a justification for such
implementation; and
``(3) upon request, not later than the end of the 120-day
period beginning on the date of the notice under paragraph (1),
testimony on such proposed implementation.''.
(d) National Credit Union Administration.--Section 102 of the
Federal Credit Union Act (12 U.S.C. 1752a) is amended by adding at the
end the following:
``(g) Report on the Implementation of Recommendations From the FSOC
Chairperson and Executive Orders.--The Board may not implement a non-
binding recommendation made by the Chairperson of the Financial
Stability Oversight Council or contained in an Executive Order unless
the Board first provides the Committee on Financial Services of the
House of Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate with--
``(1) notice that the Board intends to implement such
recommendation;
``(2) a report containing the proposed implementation by
the Board and a justification for such implementation; and
``(3) upon request, not later than the end of the 120-day
period beginning on the date of the notice under paragraph (1),
testimony on such proposed implementation.''.
(e) Federal Housing Finance Agency.--Section 1311 of the Housing
and Community Development Act of 1992 (12 U.S.C. 4511) is amended by
adding at the end the following:
``(d) Report on the Implementation of Recommendations From the FSOC
Chairperson and Executive Orders.--The Director may not implement a
non-binding recommendation made by the Chairperson of the Financial
Stability Oversight Council or contained in an Executive Order unless
the Director first provides the Committee on Financial Services of the
House of Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate with--
``(1) notice that the Director intends to implement such
recommendation;
``(2) a report containing the proposed implementation by
the Director and a justification for such implementation; and
``(3) upon request, not later than the end of the 120-day
period beginning on the date of the notice under paragraph (1),
testimony on such proposed implementation.''.
TITLE II--ENSURING U.S. AUTHORITY OVER U.S. BANKING REGULATIONS
SEC. 4201. REQUIREMENTS IN CONNECTION WITH RULEMAKINGS IMPLEMENTING
POLICIES OF NON-GOVERNMENTAL INTERNATIONAL ORGANIZATIONS.
(a) Board of Governors of the Federal Reserve System.--Section 10
of the Federal Reserve Act (12 U.S.C. 247b), as amended by section
4101(a), is further amended by inserting after paragraph (11) the
following:
``(12) Requirements in connection with rulemakings
implementing policies of non-governmental international
organizations.--
``(A) In general.--The Board of Governors of the
Federal Reserve System may not propose or finalize a
major covered rule unless, not later than 120 days
before issuing such a proposed or final rule, the Board
of Governors provides the Committee on Financial
Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the
Senate with notice, testimony, and a detailed economic
analysis with respect to the proposed or final rule,
including projections of economic costs, sectoral
effects, and effects on the availability of credit, the
gross domestic product, and employment.
``(B) Major covered rule defined.--In this
paragraph, the term `major covered rule' means a rule--
``(i) that the Board of Governors
determines would have an effect, in the
aggregate, on the economy of the United States
of $10,000,000,000 or more during the 10-year
period beginning on the date the rule takes
effect; and
``(ii) that is intended to align or conform
with a recommendation from a non-governmental
international organization (including the
Financial Stability Board, the Bank for
International Settlements, the Network of
Central Banks and Supervisors for Greening the
Financial System, and the Basel Committee on
Banking Supervision).''.
(b) Office of the Comptroller of the Currency.--Section 324 of the
Revised Statutes of the United States (12 U.S.C. 1), as amended by
section 4101(b), is further amended by adding at the end the following:
``(d) Requirements in Connection With Rulemakings Implementing
Policies of Non-governmental International Organizations.--
``(1) In general.--The Comptroller of the Currency may not
propose or finalize a major covered rule unless, not later than
120 days before issuing such a proposed or final rule, the
Comptroller of the Currency provides the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate with notice,
testimony, and a detailed economic analysis with respect to the
proposed or final rule, including projections of economic
costs, sectoral effects, and effects on the availability of
credit, the gross domestic product, and employment.
``(2) Major covered rule defined.--In this subsection, the
term `major covered rule' means a rule--
``(A) that the Comptroller of the Currency
determines would have an effect, in the aggregate, on
the economy of the United States of $10,000,000,000 or
more during the 10-year period beginning on the date
the rule takes effect; and
``(B) that is intended to align or conform with a
recommendation from a non-governmental international
organization (including the Financial Stability Board,
the Bank for International Settlements, the Network of
Central Banks and Supervisors for Greening the
Financial System, and the Basel Committee on Banking
Supervision).''.
(c) Federal Deposit Insurance Corporation.--Section 2 of the
Federal Deposit Insurance Act (12 U.S.C. 1812), as amended by section
4101(c), is further amended by inserting after subsection (g) the
following:
``(h) Requirements in Connection With Rulemakings Implementing
Policies of Non-governmental International Organizations.--
``(1) In general.--The Board of Directors of the
Corporation may not propose or finalize a major covered rule
unless, not later than 120 days before issuing such a proposed
or final rule, the Board of Directors provides the Committee on
Financial Services of the House of Representatives and the
Committee on Banking, Housing, and Urban Affairs of the Senate
with notice, testimony, and a detailed economic analysis with
respect to the proposed or final rule, including projections of
economic costs, sectoral effects, and effects on the
availability of credit, the gross domestic product, and
employment.
``(2) Major covered rule defined.--In this subsection, the
term `major covered rule' means a rule--
``(A) that the Board of Directors determines would
have an effect, in the aggregate, on the economy of the
United States of $10,000,000,000 or more during the 10-
year period beginning on the date the rule takes
effect; and
``(B) that is intended to align or conform with a
recommendation from a non-governmental international
organization (including the Financial Stability Board,
the Bank for International Settlements, the Network of
Central Banks and Supervisors for Greening the
Financial System, and the Basel Committee on Banking
Supervision).''.
(d) National Credit Union Administration.--Section 102 of the
Federal Credit Union Act (12 U.S.C. 1752a), as amended by section
4101(d), is further amended by adding at the end the following:
``(h) Requirements in Connection With Rulemakings Implementing
Policies of Non-governmental International Organizations.--
``(1) In general.--The Board may not propose or finalize a
major covered rule unless, not later than 120 days before
issuing such a proposed or final rule, the Board provides the
Committee on Financial Services of the House of Representatives
and the Committee on Banking, Housing, and Urban Affairs of the
Senate with notice, testimony, and a detailed economic analysis
with respect to the proposed or final rule, including
projections of economic costs, sectoral effects, and effects on
the availability of credit, the gross domestic product, and
employment.
``(2) Major covered rule defined.--In this subsection, the
term `major covered rule' means a rule--
``(A) that the Board determines would have an
effect, in the aggregate, on the economy of the United
States of $10,000,000,000 or more during the 10-year
period beginning on the date the rule takes effect; and
``(B) that is intended to align or conform with a
recommendation from a non-governmental international
organization (including the Financial Stability Board,
the Bank for International Settlements, the Network of
Central Banks and Supervisors for Greening the
Financial System, and the Basel Committee on Banking
Supervision).''.
(e) Federal Housing Finance Agency.--Section 1311 of the Housing
and Community Development Act of 1992 (12 U.S.C. 4511), as amended by
section 4101(e), is further amended by adding at the end the following:
``(e) Requirements in Connection With Rulemakings Implementing
Policies of Non-governmental International Organizations.--
``(1) In general.--The Director may not propose or finalize
a major covered rule unless, not later than 120 days before
issuing such a proposed or final rule, the Director provides
the Committee on Financial Services of the House of
Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate with notice, testimony, and a
detailed economic analysis with respect to the proposed or
final rule, including projections of economic costs, sectoral
effects, and effects on the availability of credit, the gross
domestic product, and employment.
``(2) Major covered rule defined.--In this subsection, the
term `major covered rule' means a rule--
``(A) that the Director determines would have an
effect, in the aggregate, on the economy of the United
States of $10,000,000,000 or more during the 10-year
period beginning on the date the rule takes effect; and
``(B) that is intended to align or conform with a
recommendation from a non-governmental international
organization (including the Financial Stability Board,
the Bank for International Settlements, the Network of
Central Banks and Supervisors for Greening the
Financial System, and the Basel Committee on Banking
Supervision).''.
SEC. 4202. REPORT ON CERTAIN CLIMATE-RELATED INTERACTIONS WITH COVERED
INTERNATIONAL ORGANIZATIONS.
(a) In General.--A Federal banking regulator may not meet with or
otherwise engage with a covered international organization on the topic
of climate-related financial risk during a calendar year unless the
Federal banking regulator has issued a report to the Committee on
Financial Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate containing, for the
previous calendar year--
(1) a complete description of the activities of the covered
international organization in which the Federal banking
regulator participates (including any task force, committee, or
other organizational unit thereof); and
(2) a detailed accounting of the governmental and non-
governmental funding sources of the covered international
organization (including any task force, committee, or other
organizational unit thereof).
(b) Definitions.--In this section:
(1) Covered international organization.--The term ``covered
international organization'' means the Financial Stability
Board, the Bank for International Settlements, the Network of
Central Banks and Supervisors for Greening the Financial
System, and the Basel Committee on Banking Supervision.
(2) Federal banking regulator.--The term ``Federal banking
regulator'' means the Board of Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation, the Federal
Housing Finance Agency, the National Credit Union
Administration, and the Office of the Comptroller of the
Currency.
TITLE III--BANKING REGULATOR INTERNATIONAL REPORTING
SEC. 4301. REPORTING ON INTERACTIONS WITH NON-GOVERNMENTAL
INTERNATIONAL ORGANIZATIONS.
(a) Board of Governors of the Federal Reserve System.--Section 10
of the Federal Reserve Act (12 U.S.C. 247b), as amended by section
4201(a), is further amended by inserting after paragraph (12) the
following:
``(13) Reporting on interactions with non-governmental
international organizations.--With respect to interactions
between the Board of Governors of the Federal Reserve System
and a non-governmental international organization (including
the Financial Stability Board, the Bank for International
Settlements, the Network of Central Banks and Supervisors for
Greening the Financial System, and the Basel Committee on
Banking Supervision), the Board of Governors shall--
``(A) keep a complete record of all such
interactions, including minutes of all meetings and any
recommendations made during such interaction for
international standardization with respect to open-
market policies and operations, discount lending and
operations (including collateral policies), or
supervisory policies and operations; and
``(B) issue an annual report to the Committee on
Financial Services of the House of Representatives and
the Committee on Banking, Housing, and Urban Affairs of
the Senate containing--
``(i) all of the information recorded
pursuant to subparagraph (A) with respect to
the previous year; and
``(ii) with respect to each non-
governmental international organization with
which the Board of Governors had an interaction
in the previous year, a description of the
funding sources of the non-governmental
international organization.''.
(b) Office of the Comptroller of the Currency.--Section 324 of the
Revised Statutes of the United States (12 U.S.C. 1), as amended by
section 4201(b), is further amended by adding at the end the following:
``(e) Reporting on Interactions With Non-governmental International
Organizations.--With respect to interactions between the Office of the
Comptroller of the Currency and a non-governmental international
organization (including the Financial Stability Board, the Bank for
International Settlements, the Network of Central Banks and Supervisors
for Greening the Financial System, and the Basel Committee on Banking
Supervision), the Comptroller of the Currency shall--
``(1) keep a complete record of all such interactions,
including minutes of all meetings and any recommendations made
during such interaction for international standardization with
respect to discount lending and operations (including
collateral policies) or supervisory policies and operations;
and
``(2) issue an annual report to the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate containing--
``(A) all of the information recorded pursuant to
paragraph (1) with respect to the previous year; and
``(B) with respect to each non-governmental
international organization with which the Office of the
Comptroller of the Currency had an interaction in the
previous year, a description of the funding sources of
the non-governmental international organization.''.
(c) Federal Deposit Insurance Corporation.--Section 2 of the
Federal Deposit Insurance Act (12 U.S.C. 1812), as amended by section
4201(c), is further amended is amended by inserting after subsection
(h) the following:
``(i) Reporting on Interactions With Non-governmental International
Organizations.--With respect to interactions between the Federal
Deposit Insurance Corporation and a non-governmental international
organization (including the Financial Stability Board, the Bank for
International Settlements, the Network of Central Banks and Supervisors
for Greening the Financial System, and the Basel Committee on Banking
Supervision), the Board of Directors of the Corporation shall--
``(1) keep a complete record of all such interactions,
including minutes of all meetings and any recommendations made
during such interaction for international standardization with
respect to discount lending and operations (including
collateral policies) or supervisory policies and operations;
and
``(2) issue an annual report to the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate containing--
``(A) all of the information recorded pursuant to
paragraph (1) with respect to the previous year; and
``(B) with respect to each non-governmental
international organization with which the Corporation
had an interaction in the previous year, a description
of the funding sources of the non-governmental
international organization.''.
(d) National Credit Union Administration.--Section 102 of the
Federal Credit Union Act (12 U.S.C. 1752a), as amended by section
4201(d), is further amended by adding at the end the following:
``(i) Reporting on Interactions With Non-governmental International
Organizations.--With respect to interactions between the Administration
and a non-governmental international organization (including the
Financial Stability Board, the Bank for International Settlements, the
Network of Central Banks and Supervisors for Greening the Financial
System, and the Basel Committee on Banking Supervision), the Board
shall--
``(1) keep a complete record of all such interactions,
including minutes of all meetings and any recommendations made
during such interaction for international standardization with
respect to discount lending and operations (including
collateral policies) or supervisory policies and operations;
and
``(2) issue an annual report to the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate containing--
``(A) all of the information recorded pursuant to
paragraph (1) with respect to the previous year; and
``(B) with respect to each non-governmental
international organization with which the
Administration had an interaction in the previous year,
a description of the funding sources of the non-
governmental international organization.''.
(e) Federal Housing Finance Agency.--Section 1311 of the Housing
and Community Development Act of 1992 (12 U.S.C. 4511), as amended by
section 4201(e), is further amended by adding at the end the following:
``(f) Reporting on Interactions With Non-governmental International
Organizations.--With respect to interactions between the Federal
Housing Finance Agency and a non-governmental international
organization (including the Financial Stability Board, the Bank for
International Settlements, the Network of Central Banks and Supervisors
for Greening the Financial System, and the Basel Committee on Banking
Supervision), the Director shall--
``(1) keep a complete record of all such interactions,
including minutes of all meetings and any recommendations made
during such interaction for international standardization with
respect to discount lending and operations (including
collateral policies) or supervisory policies and operations;
and
``(2) issue an annual report to the Committee on Financial
Services of the House of Representatives and the Committee on
Banking, Housing, and Urban Affairs of the Senate containing--
``(A) all of the information recorded pursuant to
paragraph (1) with respect to the previous year; and
``(B) with respect to each non-governmental
international organization with which the Federal
Housing Finance Agency had an interaction in the
previous year, a description of the funding sources of
the non-governmental international organization.''.
TITLE IV--SUPERVISION REFORM
SEC. 4401. REMOVAL OF THE VICE CHAIRMAN FOR SUPERVISION DESIGNATION.
(a) In General.--The second undesignated paragraph of section 10 of
the Federal Reserve Act (12 U.S.C. 242) (relating to the Chairman and
Vice Chairman of the Board) is amended by striking ``and 2 shall be
designated by the President, by and with the advice and consent of the
Senate, to serve as Vice Chairmen of the Board, each for a term of 4
years, 1 of whom shall serve in the absence of the Chairman, as
provided in the fourth undesignated paragraph of this section, and 1 of
whom shall be designated Vice Chairman for Supervision. The Vice
Chairman for Supervision shall develop policy recommendations for the
Board regarding supervision and regulation of depository institution
holding companies and other financial firms supervised by the Board,
and shall oversee the supervision and regulation of such firms.'' and
inserting ``and 1 shall be designated by the President, by and with the
consent of the Senate, to serve as Vice Chairman of the Board for a
term of 4 years.''.
(b) Conforming Amendment.--Section 10 of the Federal Reserve Act
(12 U.S.C. 241 et seq.) is amended by striking paragraph (12).
DIVISION E--LIMITATION ON SEC RESERVE FUND
SEC. 5001. LIMITATION.
During fiscal years 2026 and 2027, registration fees collected by
the Securities and Exchange Commission shall not be deposited in the
Securities and Exchange Commission Reserve Fund.
Passed the House of Representatives September 19, 2024.
Attest:
Clerk.
118th CONGRESS
2d Session
H. R. 4790
_______________________________________________________________________
AN ACT
To amend the Federal securities laws with respect to the materiality of
disclosure requirements, to establish the Public Company Advisory
Committee, and for other purposes.