HR 3422 — Promoting Opportunities for Non-Traditional Capital Formation Act

changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, and existing law in which no 
change is proposed is shown in roman):

 SECURITIES EXCHANGE ACT OF 1934

TITLE I--REGULATION OF SECURITIES EXCHANGES

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 securities and exchange commission

 Sec. 4. (a) There is hereby established a Securities and 
Exchange Commission (hereinafter referred to as the 
``Commission'') to be composed of five commissioners to be 
appointed by the President by and with the advice and consent 
of the Senate. Not more than three of such commissioners shall 
be members of the same political party, and in making 
appointments members of different political parties shall be 
appointed alternately as nearly as may be practicable. No 
commissioner shall engage in any other business, vocation, or 
employment than that of serving as commissioner, nor shall any 
commissioner participate, directly or indirectly, in any stock-
market operations or transactions of a character subject to 
regulation by the Commission pursuant to this title. Each 
commissioner shall hold office for a term of five years and 
until his successor is appointed and has qualified, except that 
he shall not so continue to serve beyond the expiration of the 
next session of Congress subsequent to the expiration of said 
fixed term of office, and except (1) any commissioner appointed 
to fill a vacancy occurring prior to the expiration of the term 
for which his predecessor was appointed shall be appointed for 
the remainder of such term, and (2) the terms of office of the 
commissioners first taking office after the enactment of this 
title shall expire as designated by the President at the time 
of nomination, one at the end of one year, one at the end of 
two years, one at the end of three years, one at the end of 
four years, and one at the end of five years, after the date of 
the enactment of this title.
 (b) Appointment and Compensation of Staff and Leasing 
Authority.--
 (1) Appointment and compensation.--The Commission 
 shall appoint and compensate officers, attorneys, 
 economists, examiners, and other employees in 
 accordance with section 4802 of title 5, United States 
 Code.
 (2) Reporting of information.--In establishing and 
 adjusting schedules of compensation and benefits for 
 officers, attorneys, economists, examiners, and other 
 employees of the Commission under applicable provisions 
 of law, the Commission shall inform the heads of the 
 agencies referred to under section 1206 of the 
 Financial Institutions Reform, Recovery, and 
 Enforcement Act of 1989 (12 U.S.C. 1833b) and Congress 
 of such compensation and benefits and shall seek to 
 maintain comparability with such agencies regarding 
 compensation and benefits.
 (3) Leasing authority.--Nothwithstanding any other 
 provision of law, the Commission is authorized to enter 
 directly into leases for real property for office, 
 meeting, storage, and such other space as is necessary 
 to carry out its functions, and shall be exempt from 
 any General Services Administration space management 
 regulations or directives.
 (c) Notwithstanding any other provision of law, in accordance 
with regulations which the Commission shall prescribe to 
prevent conflicts of interest, the Commission may accept 
payment and reimbursement, in cash or in kind, from non-Federal 
agencies, organizations, and individuals for travel, 
subsistence, and other necessary expenses incurred by 
Commission members and employees in attending meetings and 
conferences concerning the functions or activities of the 
Commission. Any payment or reimbursement accepted shall be 
credited to the appropriated funds of the Commission. The 
amount of travel, subsistence, and other necessary expenses for 
members and employees paid or reimbursed under this subsection 
may exceed per diem amounts established in official travel 
regulations, but the Commission may include in its regulations 
under this subsection a limitation on such amounts.
 (d) Notwithstanding any other provision of law, former 
employers of participants in the Commission's professional 
fellows programs may pay such participants their actual 
expenses for relocation to Washington, District of Columbia, to 
facilitate their participation in such programs, and program 
participants may accept such payments.
 (e) Notwithstanding any other provision of law, whenever any 
fee is required to be paid to the Commission pursuant to any 
provision of the securities laws or any other law, the 
Commission may provide by rule that such fee shall be paid in a 
manner other than in cash and the Commission may also specify 
the time that such fee shall be determined and paid relative to 
the filing of any statement or document with the Commission.
 (f) Reimbursement of Expenses for Assisting Foreign 
Securities Authorities.--Notwithstanding any other provision of 
law, the Commission may accept payment and reimbursement, in 
cash or in kind, from a foreign securities authority, or made 
on behalf of such authority, for necessary expenses incurred by 
the Commission, its members, and employees in carrying out any 
investigation pursuant to section 21(a)(2) of this title or in 
providing any other assistance to a foreign securities 
authority. Any payment or reimbursement accepted shall be 
considered a reimbursement to the appropriated funds of the 
Commission.
 (g) Office of the Investor Advocate.--
 (1) Office established.--There is established within 
 the Commission the Office of the Investor Advocate (in 
 this subsection referred to as the ``Office'').
 (2) Investor advocate.--
 (A) In general.--The head of the Office shall 
 be the Investor Advocate, who shall--
 (i) report directly to the Chairman; 
 and
 (ii) be appointed by the Chairman, in 
 consultation with the Commission, from 
 among individuals having experience in 
 advocating for the interests of 
 investors in securities and investor 
 protection issues, from the perspective 
 of investors.
 (B) Compensation.--The annual rate of pay for 
 the Investor Advocate shall be equal to the 
 highest rate of annual pay for other senior 
 executives who report to the Chairman of the 
 Commission.
 (C) Limitation on service.--An individual who 
 serves as the Investor Advocate may not be 
 employed by the Commission--
 (i) during the 2-year period ending 
 on the date of appointment as Investor 
 Advocate; or
 (ii) during the 5-year period 
 beginning on the date on which the 
 person ceases to serve as the Investor 
 Advocate.
 (3) Staff of office.--The Investor Advocate, after 
 consultation with the Chairman of the Commission, may 
 retain or employ independent counsel, research staff, 
 and service staff, as the Investor Advocate deems 
 necessary to carry out the functions, powers, and 
 duties of the Office.
 (4) Functions of the investor advocate.--The Investor 
 Advocate shall--
 (A) assist retail investors in resolving 
 significant problems such investors may have 
 with the Commission or with self-regulatory 
 organizations;
 (B) identify areas in which investors would 
 benefit from changes in the regulations of the 
 Commission or the rules of self-regulatory 
 organizations;
 (C) identify problems that investors have 
 with financial service providers and investment 
 products;
 (D) analyze the potential impact on investors 
 of--
 (i) proposed regulations of the 
 Commission; and
 (ii) proposed rules of self-
 regulatory organizations registered 
 under this title; and
 (E) to the extent practicable, propose to the 
 Commission changes in the regulations or orders 
 of the Commission and to Congress any 
 legislative, administrative, or personnel 
 changes that may be appropriate to mitigate 
 problems identified under this paragraph and to 
 promote the interests of investors.
 (5) Access to documents.--The Commission shall ensure 
 that the Investor Advocate has full access to the 
 documents of the Commission and any self-regulatory 
 organization, as necessary to carry out the functions 
 of the Office.
 (6) Annual reports.--
 (A) Report on objectives.--
 (i) In general.--Not later than June 
 30 of each year after 2010, the 
 Investor Advocate shall submit to the 
 Committee on Banking, Housing, and 
 Urban Affairs of the Senate and the 
 Committee on Financial Services of the 
 House of Representatives a report on 
 the objectives of the Investor Advocate 
 for the following fiscal year.
 (ii) Contents.--Each report required 
 under clause (i) shall contain full and 
 substantive analysis and explanation.
 (B) Report on activities.--
 (i) In general.--Not later than 
 December 31 of each year after 2010, 
 the Investor Advocate shall submit to 
 the Committee on Banking, Housing, and 
 Urban Affairs of the Senate and the 
 Committee on Financial Services of the 
 House of Representatives a report on 
 the activities of the Investor Advocate 
 during the immediately preceding fiscal 
 year.
 (ii) Contents.--Each report required 
 under clause (i) shall include--
 (I) appropriate statistical 
 information and full and 
 substantive analysis;
 (II) information on steps 
 that the Investor Advocate has 
 taken during the reporting 
 period to improve investor 
 services and the responsiveness 
 of the Commission and self-
 regulatory organizations to 
 investor concerns;
 (III) a summary of the most 
 serious problems encountered by 
 investors during the reporting 
 period;
 (IV) an inventory of the 
 items described in subclause 
 (III) that includes--
 (aa) identification 
 of any action taken by 
 the Commission or the 
 self-regulatory 
 organization and the 
 result of such action;
 (bb) the length of 
 time that each item has 
 remained on such 
 inventory; and
 (cc) for items on 
 which no action has 
 been taken, the reasons 
 for inaction, and an 
 identification of any 
 official who is 
 responsible for such 
 action;
 (V) recommendations for such 
 administrative and legislative 
 actions as may be appropriate 
 to resolve problems encountered 
 by investors; and
 (VI) any other information, 
 as determined appropriate by 
 the Investor Advocate.
 (iii) Independence.--Each report 
 required under this paragraph shall be 
 provided directly to the Committees 
 listed in clause (i) without any prior 
 review or comment from the Commission, 
 any commissioner, any other officer or 
 employee of the Commission, or the 
 Office of Management and Budget.
 (iv) Confidentiality.--No report 
 required under clause (i) may contain 
 confidential information.
 (7) Regulations.--The Commission shall, by 
 regulation, establish procedures requiring a formal 
 response to all recommendations submitted to the 
 Commission by the Investor Advocate, not later than 3 
 months after the date of such submission.
 (8) Ombudsman.--
 (A) Appointment.--Not later than 180 days 
 after the date on which the first Investor 
 Advocate is appointed under paragraph 
 (2)(A)(i), the Investor Advocate shall appoint 
 an Ombudsman, who shall report directly to the 
 Investor Advocate.
 (B) Duties.--The Ombudsman appointed under 
 subparagraph (A) shall--
 (i) act as a liaison between the 
 Commission and any retail investor in 
 resolving problems that retail 
 investors may have with the Commission 
 or with self-regulatory organizations;
 (ii) review and make recommendations 
 regarding policies and procedures to 
 encourage persons to present questions 
 to the Investor Advocate regarding 
 compliance with the securities laws; 
 and
 (iii) establish safeguards to 
 maintain the confidentiality of 
 communications between the persons 
 described in clause (ii) and the 
 Ombudsman.
 (C) Limitation.--In carrying out the duties 
 of the Ombudsman under subparagraph (B), the 
 Ombudsman shall utilize personnel of the 
 Commission to the extent practicable. Nothing 
 in this paragraph shall be construed as 
 replacing, altering, or diminishing the 
 activities of any ombudsman or similar office 
 of any other agency.
 (D) Report.--The Ombudsman shall submit a 
 semiannual report to the Investor Advocate that 
 describes the activities and evaluates the 
 effectiveness of the Ombudsman during the 
 preceding year. The Investor Advocate shall 
 include the reports required under this section 
 in the reports required to be submitted by the 
 Inspector Advocate under paragraph (6).
 (h) Examiners.--
 (1) Division of trading and markets.--The Division of 
 Trading and Markets of the Commission, or any successor 
 organizational unit, shall have a staff of examiners 
 who shall--
 (A) perform compliance inspections and 
 examinations of entities under the jurisdiction 
 of that Division; and
 (B) report to the Director of that Division.
 (2) Division of investment management.--The Division 
 of Investment Management of the Commission, or any 
 successor organizational unit, shall have a staff of 
 examiners who shall--
 (A) perform compliance inspections and 
 examinations of entities under the jurisdiction 
 of that Division; and
 (B) report to the Director of that Division.
 (i) Securities and Exchange Commission Reserve Fund.--
 (1) Reserve fund established.--There is established 
 in the Treasury of the United States a separate fund, 
 to be known as the ``Securities and Exchange Commission 
 Reserve Fund'' (referred to in this subsection as the 
 ``Reserve Fund'').
 (2) Reserve fund amounts.--
 (A) In general.--Except as provided in 
 subparagraph (B), any registration fees 
 collected by the Commission under section 6(b) 
 of the Securities Act of 1933 (15 U.S.C. 
 77f(b)) or section 24(f) of the Investment 
 Company Act of 1940 (15 U.S.C. 80a-24(f)) shall 
 be deposited into the Reserve Fund.
 (B) Limitations.--For any 1 fiscal year--
 (i) the amount deposited in the Fund 
 may not exceed $50,000,000; and
 (ii) the balance in the Fund may not 
 exceed $100,000,000.
 (C) Excess fees.--Any amounts in excess of 
 the limitations described in subparagraph (B) 
 that the Commission collects from registration 
 fees under section 6(b) of the Securities Act 
 of 1933 (15 U.S.C. 77f(b)) or section 24(f) of 
 the Investment Company Act of 1940 (15 U.S.C. 
 80a-24(f)) shall be deposited in the General 
 Fund of the Treasury of the United States and 
 shall not be available for obligation by the 
 Commission.
 (3) Use of amounts in reserve fund.--The Commission 
 may obligate amounts in the Reserve Fund, not to exceed 
 a total of $100,000,000 in any 1 fiscal year, as the 
 Commission determines is necessary to carry out the 
 functions of the Commission. Any amounts in the reserve 
 fund shall remain available until expended. Not later 
 than 10 days after the date on which the Commission 
 obligates amounts under this paragraph, the Commission 
 shall notify Congress of the date, amount, and purpose 
 of the obligation.
 (4) Rule of construction.--Amounts collected and 
 deposited in the Reserve Fund shall not be construed to 
 be Government funds or appropriated monies and shall 
 not be subject to apportionment for the purpose of 
 chapter 15 of title 31, United States Code, or under 
 any other authority.
 (j) Office of the Advocate for Small Business Capital 
Formation.--
 (1) Office established.--There is established within 
 the Commission the Office of the Advocate for Small 
 Business Capital Formation (hereafter in this 
 subsection referred to as the ``Office'').
 (2) Advocate for small business capital formation.--
 (A) In general.--The head of the Office shall 
 be the Advocate for Small Business Capital 
 Formation, who shall--
 (i) report directly to the 
 Commission; and
 (ii) be appointed by the Commission, 
 from among individuals having 
 experience in advocating for the 
 interests of small businesses and 
 encouraging small business capital 
 formation.
 (B) Compensation.--The annual rate of pay for 
 the Advocate for Small Business Capital 
 Formation shall be equal to the highest rate of 
 annual pay for other senior executives who 
 report directly to the Commission.
 (C) No current employee of the commission.--
 An individual may not be appointed as the 
 Advocate for Small Business Capital Formation 
 if the individual is currently employed by the 
 Commission.
 (3) Staff of office.--The Advocate for Small Business 
 Capital Formation, after consultation with the 
 Commission, may retain or employ independent counsel, 
 research staff, and service staff, as the Advocate for 
 Small Business Capital Formation determines to be 
 necessary to carry out the functions of the Office.
 (4) Functions of the advocate for small business 
 capital formation.--The Advocate for Small Business 
 Capital Formation shall--
 (A) assist small businesses and small 
 business investors in resolving significant 
 problems such businesses and investors may have 
 with the Commission or with self-regulatory 
 organizations;
 (B) identify areas in which small businesses 
 and small business investors would benefit from 
 changes in the regulations of the Commission or 
 the rules of self-regulatory organizations;
 (C) identify problems that small businesses 
 have with securing access to capital, including 
 any unique challenges to minority-owned small 
 businesses, women-owned small businesses, and 
 small businesses affected by hurricanes or 
 other natural disasters;
 (D) analyze the potential impact on small 
 businesses and small business investors of--
 (i) proposed regulations of the 
 Commission that are likely to have a 
 significant economic impact on small 
 businesses and small business capital 
 formation; and
 (ii) proposed rules that are likely 
 to have a significant economic impact 
 on small businesses and small business 
 capital formation of self-regulatory 
 organizations registered under this 
 title;
 (E) conduct outreach to small businesses and 
 small business investors, including through 
 regional roundtables, in order to solicit views 
 on relevant capital formation issues;
 (F) to the extent practicable, propose to the 
 Commission changes in the regulations or orders 
 of the Commission and to Congress any 
 legislative, administrative, or personnel 
 changes that may be appropriate to mitigate 
 problems identified under this paragraph and to 
 promote the interests of small businesses and 
 small business investors;
 (G) consult with the Investor Advocate on 
 proposed recommendations made under 
 subparagraph (F); [and]
 (H) advise the Investor Advocate on issues 
 related to small businesses and small business 
 investors[.];
 (I) provide educational resources and host or 
 participate in events for small businesses and 
 small business investors, including to raise 
 awareness of capital raising options for--
 (i) underrepresented small 
 businesses, including women-owned small 
 businesses and minority-owned small 
 businesses;
 (ii) businesses located in rural 
 areas; and
 (iii) small businesses affected by 
 hurricanes or other natural disasters; 
 and
 (J) at least annually, meet with 
 representatives of State securities commissions 
 to discuss opportunities for collaboration and 
 coordination with respect to efforts to assist 
 small businesses and small business investors.
 (5) Access to documents.--The Commission shall ensure 
 that the Advocate for Small Business Capital Formation 
 has full access to the documents and information of the 
 Commission and any self-regulatory organization, as 
 necessary to carry out the functions of the Office.
 (6) Annual report on activities.--
 (A) In general.--Not later than December 31 
 of each year after 2015, the Advocate for Small 
 Business Capital Formation shall submit to the 
 Committee on Banking, Housing, and Urban 
 Affairs of the Senate and the Committee on 
 Financial Services of the House of 
 Representatives a report on the activities of 
 the Advocate for Small Business Capital 
 Formation during the immediately preceding 
 fiscal year.
 (B) Contents.--Each report required under 
 subparagraph (A) shall include--
 (i) appropriate statistical 
 information and full and substantive 
 analysis;
 (ii) information on steps that the 
 Advocate for Small Business Capital 
 Formation has taken during the 
 reporting period to improve small 
 business services and the 
 responsiveness of the Commission and 
 self-regulatory organizations to small 
 business and small business investor 
 concerns;
 (iii) a summary of the most serious 
 issues encountered by small businesses 
 and small business investors, including 
 any unique issues encountered by 
 minority-owned small businesses, women-
 owned small businesses, and small 
 businesses affected by hurricanes or 
 other natural disasters and their 
 investors, during the reporting period;
 (iv) an inventory of the items 
 summarized under clause (iii) 
 (including items summarized under such 
 clause for any prior reporting period 
 on which no action has been taken or 
 that have not been resolved to the 
 satisfaction of the Advocate for Small 
 Business Capital Formation as of the 
 beginning of the reporting period 
 covered by the report) that includes--
 (I) identification of any 
 action taken by the Commission 
 or the self-regulatory 
 organization and the result of 
 such action;
 (II) the length of time that 
 each item has remained on such 
 inventory; and
 (III) for items on which no 
 action has been taken, the 
 reasons for inaction, and an 
 identification of any official 
 who is responsible for such 
 action;
 (v) recommendations for such changes 
 to the regulations, guidance and orders 
 of the Commission and such legislative 
 actions as may be appropriate to 
 resolve problems with the Commission 
 and self-regulatory organizations 
 encountered by small businesses and 
 small business investors and to 
 encourage small business capital 
 formation; and
 (vi) any other information, as 
 determined appropriate by the Advocate 
 for Small Business Capital Formation.
 (C) Confidentiality.--No report required by 
 subparagraph (A) may contain confidential 
 information.
 (D) Independence.--Each report required under 
 subparagraph (A) shall be provided directly to 
 the committees of Congress listed in such 
 subparagraph without any prior review or 
 comment from the Commission, any commissioner, 
 any other officer or employee of the 
 Commission, or the Office of Management and 
 Budget.
 (7) Regulations.--The Commission shall establish 
 procedures requiring a formal response to all 
 recommendations submitted to the Commission by the 
 Advocate for Small Business Capital Formation, not 
 later than 3 months after the date of such submission.
 (8) Government-business forum on small business 
 capital formation.--The Advocate for Small Business 
 Capital Formation shall be responsible for planning, 
 organizing, and executing the annual Government-
 Business Forum on Small Business Capital Formation 
 described in section 503 of the Small Business 
 Investment Incentive Act of 1980 (15 U.S.C. 80c-1).
 (9) Rule of construction.--Nothing in this subsection 
 may be construed as replacing or reducing the 
 responsibilities of the Investor Advocate with respect 
 to small business investors.
 (k) Open Data Publication.--All public data assets published 
by the Commission under the securities laws and the Dodd-Frank 
Wall Street Reform and Consumer Protection Act (Public Law 111-
203; 124 Stat. 1376) shall be--
 (1) made available as an open Government data asset 
 (as defined in section 3502 of title 44, United States 
 Code);
 (2) freely available for download;
 (3) rendered in a human-readable format; and
 (4) accessible via application programming interface 
 where appropriate.

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