US Codex
Bill
Notes

H.R. 1815 — what changed

SEC Disclosure Effectiveness Testing Act

From Introduced in House to Reported in House. 1 section amended between Introduced in House and Reported in House.

Sec. 2 Disclosure testing

(a)
changed In general— Section 23(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78w(a)) is amended by adding at the end the following:

“(4) Investor testing

changed “(A) In general—The Commission, Commission shall engage in investor testing prior to making issuing any rule or regulation pursuant to any provision of the securities laws which would designate designates documents or information to be provided to a retail investor, shall engage in investor testing to assess whether designating disclosed under the securities laws, if such documents or information will achieve the purpose intended by the Commission.information—

added “(i) are primarily used by retail investors, as determined by the Commission; and

added “(ii) are intended to be used by retail investors to make informed investment decisions or to understand the investments held by the retail investor.

“(B) Contents—Investor testing conducted pursuant to subparagraph (A) shall include the following:

“(i) Qualitative testing in the form of one-on-one cognitive interviews of retail investors about documents or information, or samples of such documents or information, to be provided.

“(ii) A nationwide survey of retail investors, designed to complement the interviews under clause (i), on—

“(I) the usefulness of such documents or information, or samples of such documents or information;

“(II) the proposed format of such documents or information, or samples of such documents or information; and

“(III) delivery preferences of such documents or information, or samples of such documents or information.

“(iii) Analysis and publication in the Federal Register of the results of the survey and interviews.

“(iv) An opportunity for the public to comment on such results published in the Federal Register.

added “(C) Substantive changes—If the Commission, in the period between engaging in investor testing and publishing a final rule, makes substantive changes to such rule that the Commission determines would have a significant impact on retail investors, the Commission shall again engage in investor testing.

added “(D) Public availability of retail testing results—The Commission shall make the data and results of any investor testing performed pursuant to this paragraph available to the public.”

(b)
added Participation of Investor Advocate— Section 4(g) of the Securities Exchange Act of 1934 (15 U.S.C. 78d(g)) is amended—
(1)
added in paragraph (4)—
(A)
added in subparagraph (D)(ii), by striking “and” at the end;
(B)
added by redesignating subparagraph (E) as subparagraph (F); and
(C)
added by inserting after subparagraph (D) the following:

added “(E) engage in investor testing—

added “(i) as necessary to carry out the functions of the Office; and

added “(ii) under section 23(a)(4), if the Commission determines it appropriate; and”

(2)
added by adding at the end the following:

added “(9) Publication of data and results of investor testing—With respect to any investor testing carried out by the Investor Advocate pursuant to paragraph (4)(E), the Investor Advocate may make the data and results of such investor testing available to the public, and without further review or editing by the Commission.”

(c)
added Prior rules—
(1)
added In general— For any final rule or regulation issued by the Securities and Exchange Commission (in this subsection referred to as the “Commission”) before the date of the enactment of this Act that would be subject to investor testing under section 23(a)(4) of the Securities Exchange Act of 1934, had such rule been issued on or after the date of enactment of this Act, the Commission shall perform investor testing with respect to such rule or regulation that includes the contents described in such section 23(a)(4).

removed “(C) Substantive changes—If the Commission, in the period between engaging in investor testing and publishing a final rule, makes substantive changes to such rule that the Commission determines would have a significant impact on investors, the Commission shall again engage in investor testing.”

(b)
removed Prior rules—
(1)
removed In general— For any final rule or regulation issued by the Securities and Exchange Commission (in this subsection referred to as the “Commission”) before the date of the enactment of this Act, pursuant to any provision of the securities laws (as such term is defined in section 3(a) of the Securities Exchange Act of 1934) which designates documents or information to be provided to a retail investor, the Commission shall perform investor testing that includes the contents described in section 23(a)(4) of the Securities Exchange Act of 1934.
(2)
renumbered was (3)(3) Schedule— The Commission shall, not later than 6 months after the date of the enactment of this Act, establish a schedule for completing any investor testing required under paragraph (1) that prioritizes testing of any final rules and regulations that designate documents or information central to retail investor decision making.
(3)
renumbered was (3)(4) Report— The Commission shall issue a report to Congress each year containing the following:
(A)
renumbered was (3)(4)(3) The status of any investor testing required under paragraph (1).
(B)
renumbered was (3)(4)(4) The results of any investor testing completed under paragraph (1).
(C)
renumbered was (3)(4)(5) Any priorities the Commission has, based on results of investor testing required by paragraph (1), for—
(i)
renumbered was (3)(4)(5)(2) revising or eliminating any final rule or regulation designating documents or information to be provided to retail investors; and
(ii)
renumbered was (3)(4)(5)(3) revising any other final rule or regulation to supplement revised or eliminated rules designating documents or information to be provided to retail investors.