H.R. 2374 — what changed

The second subsection (k) of section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o(k)), as added by section 913(g)(1) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301 et seq.), is amended by adding at the end the following:

“(3) Requirements prior to rulemaking—The Commission shall not promulgate a rule pursuant to paragraph (1) before—

changed “(A) identifying if retail customers (and such other customers as the Commission may by rule provide) are being systematically harmed or disadvantaged due to brokers or dealers operating under different standards of conduct than those standards that apply to investment advisors under section 211 of the Investment Advisers Act of 1940 (15 U.S.C. 80b–11);80b–11); and

changed “(B) identifying whether the adoption of a uniform fiduciary standard of care for brokers or dealers and investment advisors would adversely impact retail investor access to personalized investment advice, recommendations about securities, or the availability of such advice and recommendations;recommendations.

removed “(C) conducting an assessment by the chief economist of the Commission that assesses the qualitative and quantitative costs and benefits of the rule; and

removed “(D) the Commission, based on the assessment described in subparagraph (B)—

removed “(i) determines that the benefits of the rule justify its costs;

removed “(ii) identifies and assesses available alternatives to the rule that were considered, including modification of an existing regulation, simplification of disclosures regarding standards of care that apply to brokers or dealers and those that apply to investment advisors, together with an explanation of why the rule meets the regulatory objectives more effectively than the alternatives; and

removed “(iii) ensures that the rule is accessible, consistent, written in plain language, and easy to understand, and that the rule shall measure and seek to improve the actual results of regulatory requirements.

“(4) Requirements for promulgating a rule—The Commission shall publish in the Federal Register alongside the rule promulgated pursuant to paragraph (1) formal findings that such rule would reduce the confusion of a retail customer (and such other customers as the Commission may by rule provide) about standards of conduct applicable to brokers, dealers, and investment advisors.

“(5) Requirements under Investment Advisers Act of 1940—In proposing rules under paragraph (1) for brokers or dealers, the Commission shall consider the differences in the registration, supervision, and examination requirements applicable to brokers, dealers, and investment advisors.”