Dodd-Frank Act - Title IX: Investor Protections and Improvements to the Regulation of Securities

This title is also known as the ‘‘Investor Protection and Securities Reform Act of 2010’’.

Subtitle A: Increasing Investor Protection

Investor Advisory Committee:

The Investor Advisory Committee will advise and consult with the Commission on:

• Regulatory priorities of the Commission
• Issues relating to the regulation of securities products, trading strategies, and fee structures, and the effectiveness of disclosure;
• Initiatives to protect investor interest;
• Initiatives to promote investor confidence the integrity of the securities marketplace
• It will then submit to the Commission such findings, recommendations and proposed legislative changes as the Committee finds appropriate.

The members of the Committee will include the Investor Advocate, a representative of State securities commissions, a representative of the interests of senior citizens and not fewer than 10, and not more than 20, members appointed by the Commission, from among individuals who  represent the interests of individual equity and debt investors, including investors in mutual funds,  represent the interests of institutional investors, including the interests of pension funds and registered investment companies. These members need to be knowledgeable about investment issues and decisions.

The studies needed to be undertaken as part of this title are:

Study and rulemaking regarding obligations of brokers, dealers, and investment advisers

The scope of the Commission’s study will be to evaluate the effectiveness of existing legal or regulatory standards of care for brokers, dealers, and investment advisers, persons associated with brokers or dealers. An assessment of  whether there are legal or regulatory gaps in the protection of retail customers relating to the standards of care for brokers, dealers, investment advisers, persons associated with brokers or dealers.

The committee will consider the following points while undertaking the study:

• the effectiveness of existing legal or regulatory standards of care for brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers for providing personalized investment advice and recommendations about securities to retail customers imposed by the Commission and a national securities association, and other Federal and State legal or regulatory standards.
• whether there are legal or regulatory gaps, shortcomings, or overlaps in legal or regulatory standards in the protection of retail customers relating to the standards of care for brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers for providing personalized investment advice about securities to retail customers that should be addressed by rule or statute
• whether retail customers understand that there are different standards of care applicable to brokers, dealers, investment advisers, persons associated with brokers or dealers, and
• persons associated with investment advisers in the provision of personalized investment advice about securities to retail customers
• whether the existence of different standards of care applicable to brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers is a source of confusion for retail customers regarding the quality of personalized investment advice that retail customers receive.
• the regulatory, examination, and enforcement resources devoted to, and activities of, the Commission, the States, and a national securities association to enforce the standards of
• care for brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers when providing personalized investment advice and recommendations about securities to retail customers, including:
  • the effectiveness of the examinations of brokers, dealers, and investment advisers in determining compliance with regulations
  • the frequency of the examinations
  • the length of time of the examinations
  • the substantive differences in the regulation of brokers ,dealers, and investment advisers, when providing personalized investment advice and recommendations about securities to retail customers

The specific instances related to the provision of personalized investment advice about securities in which the regulation and oversight of investment advisers provide greater protection to retail customers than the regulation and oversight of brokers and dealers the regulation and oversight of brokers and dealers provide greater protection to retail customers than the regulation and oversight of investment advisers

• the existing legal or regulatory standards of State securities regulators and other regulators intended to protect retail customers
• the potential impact on retail customers, including the potential impact on access of retail customers to the range of products and services offered by brokers and dealers, of imposing upon brokers, dealers, and persons associated with brokers or dealers.

The impact and potential benefits and harm to retail customers that could result from such a change, including any potential impact on access to personalized investment advice and recommendations about securities to retail customers or the availability of such advice and recommendations.

The number of additional entities and individuals that would be required to register under, or become subject and the additional requirements to which brokers, dealers, and persons associated with brokers and dealers would become subject, including, any potential additional associated person licensing, registration, and examination requirements. The additional costs, if any, to the additional entities and individuals, the impact on Commission and State resources to:

• conduct examinations of registered investment advisers and the representatives of registered investment advisers, including the impact on the examination cycle
• enforce the standard of care and other applicable requirements imposed under the Investment
• the varying level of services provided by brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers to retail customers and the varying scope and terms of retail customer relationships of brokers, dealers, investment advisers, persons associated with brokers or dealers, and persons associated with investment advisers with such retail customers;

A report of the same will be submitted to the no later than 6 months after the date of enactment of this Act to:

(A) the Committee on Banking, Housing, and Urban Affairs of the Senate and

(B) the Committee on Financial Services of the House of Representatives.

The Commission shall seek and consider public input, comments, and data in violations, and in preparing the report.

Study regarding financial literacy among investors

The Commission shall conduct a study to identify:

• the existing level of financial literacy among retail investors, including subgroups of investors identified by the Commission;
• methods to improve the timing, content, and format of disclosures to investors with respect to financial intermediaries, investment products, and investment services;
• the most useful and understandable relevant information that retail investors need to make informed financial decisions before engaging a financial intermediary or purchasing an investment product or service that is typically sold to retail investors, including shares of open-end companies .
• methods to increase the transparency of expenses and conflicts of interests in transactions involving investment services and products, including shares of open-end companies the most effective existing private and public efforts to educate investors;
• and in consultation with the Financial Literacy and Education Commission, a strategy (including, to the extent practicable, measurable goals and objectives) to increase the financial literacy of investors in order to bring about a positive change in investor behavior.

Study regarding mutual fund advertising

The Comptroller General of the United States will undertake a study on mutual fund advertising to identify:

• existing and proposed regulatory requirements for open end investment company advertisements;
• current marketing practices for the sale of open-end investment company shares, including the use of past performance data, funds that have merged, and incubator funds;
• the impact of such advertising on consumers; and
• recommendations to improve investor protections in mutual fund advertising and additional information necessary to ensure that investors can make informed financial decisions when purchasing shares.

A study to study conflict of interest

The Comptroller General of the United States shall conduct a study:

• to identify and examine potential conflicts of interest that exist between the staffs of the investment banking and equity and fixed income securities analyst functions within the same firm
• to make recommendations to Congress designed to protect investors in light of such conflicts.

Study on improved investor access to information on investment advisers and broker-dealers

Not later than 6 months after the date of enactment of this Act, the Commission shall complete a study, including recommendations, of ways to improve the access of investors to registration information (including disciplinary actions, regulatory, judicial, and arbitration proceedings, and other information) about registered and previously registered investment advisers, associated persons of investment advisers, brokers and dealers and their associated persons on the existing Central Registration Depository and Investment Adviser Registration Depository systems, as well as identify additional information that should be made publicly available.

Study on financial planners and the use of financial designations

The Comptroller General of the United States shall conduct a study to evaluate:

• the effectiveness of State and Federal regulations to protect investors and other consumers from individuals who hold themselves out as financial planners through the use of misleading titles, designations, or marketing materials
• current State and Federal oversight structure and regulations for financial planners legal or regulatory gaps in the regulation of financial planners and other individuals who provide or offer to provide financial planning services to consumers.

Sub-title C: Improvements to the Regulation of Credit Rating Agencies

The Act expands the regulation of credit rating agencies, including nationally recognized statistical ratings organizations ("NRSROs") by the SEC.  It also requires NRSROs to maintain more robust internal supervision of the ratings process imposes increased accountability on credit rating agencies, including NRSROs and attempts to reduce reliance on ratings from credit rating agencies.  It also requires NRSROs to comply with a number of additional procedures designed to increase transparency and mitigate conflicts of interest in the credit ratings process with the goal of improving the quality and integrity of the credit ratings provided by NRSROs.

Mitigation of Conflicts of Interest at NRSROs

A number of provisions of the Act are directed at mitigating actual or perceived conflicts of interest that could impair the integrity of credit ratings provided by NRSROs, which include those described below. Internal Controls.  NRSROs must establish an effective internal control structure governing implementation of and adherence to policies, procedures and methodologies for determining credit ratings, taking into account such factors as the SEC may prescribe, and document such internal control procedures.  On an annual basis, each NRSRO must submit to the SEC a report, containing an attestation from the NRSRO's Chief Financial Officer, identifying its internal control structure, and describing the role of management.

Separation of Marketing Considerations from the Production of Ratings

The SEC is directed to issue rules intended to require NRSROs to manage conflicts of interest by separating their sales and marketing activities from all areas involved in the production of ratings in order to prevent sales and marketing considerations from influencing the production of ratings.  Small NRSROs are exempted from these rules if compliance would pose an unreasonable burden on the NRSRO.

Employee Look-Back Requirement

If an employee of any issuer, underwriter, sponsor or other entity subject to a credit rating provided by an NRSRO was employed by that NRSRO and participated in any way in determining such credit rating, the NRSRO is required to "look-back" for the one-year time period preceding the date an action was taken with respect to that credit rating to determine whether that employee was influenced by a conflict of interest.

Report of Certain Employment Transitions

Each NRSRO must report to the SEC if a person who was employed at such NRSRO over the previous five years as a senior officer, an employee who participated in determining credit ratings or a supervisor of an employee who participated in determining credit ratings left its organization to obtain employment with an obligor, issuer, underwriter or sponsor of a security or money market instrument for which the NRSRO issued a credit rating during the twelve-month period prior to the employee's departure.

Corporate Governance, Organization, and Management of Conflicts of Interest

Each NRSRO must have a Board of Directors with at least one half (but not fewer than two) of the directors being independent in accordance with specified guidelines.  One or more of the independent directors must be users of NRSRO ratings.  The SEC has the discretion to exempt small NRSROs from this requirement if compliance would pose an unreasonable burden on the NRSRO.

Additional Penalties and Potential Liabilities for NRSROs

The Act contains additional penalties which may be imposed by the SEC and broadens the potential liability of an NRSRO in connection with securities offerings.

Additional Penalties.

The SEC may suspend or revoke an NRSRO's registration upon a determination that the NRSRO lacks adequate financial or managerial resources to consistently produce credit ratings with integrity.  In addition, the SEC is authorized to fine an NRSRO, with consideration given to, among other things, an NRSRO's failure to produce ratings with integrity over time.

SEC Enforcement Actions

The SEC's prohibition against regulating the substance of credit ratings is expressly stated not to be a defense to an anti-fraud action brought by the SEC.

Private Right of Action; State of Mind in Private Actions

A private right of action for securities law violations may be brought against a credit rating agency. Enforcement and penalty provisions now apply to statements made by a credit rating agency in the same manner and extent as statements made by registered public accountants or securities law analysts.

Referring Tips to Law Enforcement or Regulatory Authorities

NRSROs must now report information received from a credible third party alleging that an issuer of securities rated by the NRSRO has committed or is committing a material violation of the law.  The NRSRO is not required to verify the accuracy of any such information.

Oversight of NRSROs; Improvements to Transparency

There are new procedures for SEC oversight of NRSROs, as well as new obligations on NRSROs to make the credit rating process more transparent. Establishment of Office of Credit Ratings.  The SEC is required to establish an Office of Credit Ratings, which must have a Director and sufficient staff.  The stated purposes of this Office are to protect users of credit ratings, promote accuracy in credit ratings, and ensure that ratings are not influenced by conflicts of interest.

Transparency of Ratings Performance

The SEC is directed to issue rules requiring NRSROs to publicly disclose information on their initial ratings of each security and any subsequent changes to such ratings.  These rules are intended to allow users of credit ratings to evaluate the accuracy of those ratings and to compare the performance of ratings by different NRSRO.

Disclosure of Credit Rating Methodology Assumptions and Third-Party Due Diligence Services.  The SEC is to issue rules which will require each NRSRO to disclose assumptions underlying its procedures and methodologies, as well as the data relied upon to determine a rating.  To facilitate the disclosure process, the SEC is directed to develop a form, which is intended to be easy and helpful for users of credit ratings, to accompany the disclosure of the credit ratings.

Consideration of Information from Sources Other than the Issuer

In producing a credit rating, each NRSRO is required to consider information the NRSRO has or that it receives from outside sources (other than the underwriter or issuer) that it finds credible and potentially significant to a rating decision.

Qualification Standards for Credit Rating Analysts

The SEC is required to issue rules requiring NRSRO employees to be tested for knowledge of the credit rating process or to otherwise meet standards necessary to produce accurate ratings.

Reducing Federal Agency Reliance on Credit Agencies

The Act attempts to reduce the reliance of Federal agencies on credit determinations from credit rating agencies

Removal of Statutory Reference to Credit Ratings

Effective two years after enactment of the Act, various statutory references to credit rating agencies and credit ratings will be removed from numerous federal statutes, including portions of the FDI Act and the Investment Company Act of 1940.

Review of Reliance on Ratings

Within one year, each Federal agency is required to review any regulation issued by such agency that either requires the use of an assessment of the credit-worthiness of a security or money-market instrument or references regulations regarding credit ratings.  These regulations must then be modified to remove references to or reliance on credit ratings and substitute a standard of credit-worthiness deemed appropriate, taking into account various specified factors.

SEC Study on Strengthening Credit Rating Agency Independence

The SEC is required to conduct a study of the independence of NRSROs and how this affects credit rating issues.  The SEC must evaluate, among other things, management of conflicts of interest raised by NRSROs providing other non-rating services and the potential impact of a prohibition on such services.  The SEC must report to Congress the results of this study within three years.

Comptroller General Study on Alternative Business Models

The Comptroller General is required to conduct a study of alternative means for compensating NRSROs to create incentives to provide more accurate ratings and report the results of this study to Congress within eighteen months.

Comptroller General Study on the Creation of an Independent Professional Analyst Organization

The Comptroller General is directed to conduct a study on the feasibility and merits of creating an independent professional organization that would establish independent standards and an ethics code for NRSRO ratings analysts, as well as oversee the profession, and report the results of this study to Congress within one year.

Subtitle D: Improvements to the Asset-Backed Securitization Process

Study and Rulemaking on Assigning NRSROs to Rate Structured Finance Products

The SEC is required to conduct a study on the credit ratings process for structured finance products and the conflicts of interest associated with issuer-pay and subscriber-pay models, ways to measure the accuracy of credit ratings, and alternative ways to compensate NRSROs to create incentives for accurate credit ratings. The SEC is required to report the results of this study to Congress within two years.  After completion of this study, the SEC will determine whether it is necessary or appropriate to establish a system for assigning NRSROs to determine the initial credit ratings of structured finance products and issue a rule accordingly.

Standardization Study

The SEC is required to conduct a study regarding the feasibility and desirability of standardizing credit rating terminology across credit rating agencies and across asset classes, standardizing market stress conditions under which ratings are evaluated, and requiring a quantitative correspondence between ratings and a range of default probabilities and loss expectations under standardized stress conditions.  The SEC is required to report the results of this study to Congress within one year from the date of enactment of the Act.

Not later than 270 days after the date of enactment of this section, the Federal banking agencies

and the Commission shall jointly prescribe regulations to require any securitizer to retain an economic interest in a portion of the credit risk for any asset that the securitizer, through the issuance of an asset-backed security, transfers, sells, or conveys to a third party.

Residential Mortgages

Not later than 270 days after the date of the enactment of this section, the Federal banking agencies, the Commission, the Secretary of Housing and Urban Development, and the Federal Housing Finance Agency, shall jointly prescribe regulations to require any securitizer to retain an economic interest in a portion of the credit risk for any residential mortgage asset that the transfers, sells, or conveys to a third party. The regulations  prohibit a securitizer from directly or indirectly hedging or otherwise transferring the credit risk that the securitizer is required to retain with respect to an asset . It requires that a securitizer to retain not less than 5 percent of the credit risk for that which is not a qualified residential mortgage that is transferred, sold, or conveyed through the issuance of an asset-backed security by the securitizer.

Federal banking agencies need to minimize commercial mortgage risk by:

• retention of a specified amount or percentage of the total credit risk of the asset
• retention of the first-loss position by a thirdparty purchaser that specifically negotiates for the purchase
• of such first loss position, holds adequate financial resources to back losses
• provides due diligence on all individual assets in the pool before the issuance of the asset-backed securities, and meets the same standards for risk retention as the Federal banking agencies and the Commission require of the securitizer;
• a determination by the Federal banking agencies and the Commission that the underwriting standards
• and controls for the asset are adequate  provision of adequate representations and warranties and related enforcement mechanisms
• establish appropriate standards for retention of an economic interest with respect to collateralized debt obligations, securities collateralized by collateralized debt obligations, and similar instruments collateralized by other asset-backed securities
• a total or partial exemption of any securitization, as may be appropriate in the public
• interest and for the protection of investors
• a total or partial exemption for the securitization of an asset issued or guaranteed by the United States, or an agency of the United States, as the Federal banking agencies and the Commission
• jointly determine appropriate in the public interest and for the protection of investors a total or partial exemption for any asset backed security that is a security issued or guaranteed
• the allocation of risk retention obligations between a securitizer and an originator in the case of a securitizer that purchases assets from an originator, as the Federal banking agencies and the Commission jointly determine appropriate.

Study on the macroeconomic effects of risk retention requirements.

The Chairman of the Financial Services Oversight Council shall carry out a study on the macroeconomic effects of the risk retention requirements under this subtitle, and the amendments made by this subtitle, with emphasis placed on potential beneficial effects with respect to stabilizing the real estate market. Such study shall include:

• an analysis of the effects of risk retention on real estate asset price bubbles, including a retrospective estimate of what fraction of real estate losses may have been averted had such requirements been in force in recent years
• an analysis of the feasibility of minimizing real estate price bubbles by proactively adjusting the percentage of risk retention that must be borne by creditors and securitizers of real estate debt, as a function of regional or national market conditions;
• a comparable analysis for proactively adjusting mortgage origination requirements;
• an assessment of whether such proactive adjustments should be made by an independent regulator, or in a formulaic and transparent manner;
• an assessment of whether such adjustments should take place independently or in concert with monetary policy
• recommendations for implementation and enabling legislation.
• A report will be submitted no later than the end of the 180-day period beginning on the date of the enactment of this title. The Chairman of the Financial Services Oversight Council shall issue a report to the Congress containing any findings and determinations made in carrying out the study.

Subtitle E: Accountability and Executive Compensation

Not less frequently than once every 3 years, a proxy or consent or authorization for an annual or other meeting of the shareholders for which the proxy solicitation rules of the Commission require compensation disclosure shall include a separate resolution subject to shareholder vote to approve the compensation of executives,

Subtitle F: Improvements to the Management of the Securities and Exchange Commission

Within 90 days, the Commission will submit 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 on the conduct by the Commission of examinations of registered entities, enforcement investigations, and review of corporate financial securities filings.

The report will contain:

• An assessment, as of the end of the most recent fiscal year, of the effectiveness of:
  • the internal supervisory controls of the Commission
  • the procedures of the Commission applicable to the staff of the Commission who perform examinations of registered entities, enforcement investigations, and reviews of corporate financial securities filings
• Review by the Comptroller General : The Comptroller General of the United States will 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 contains a review of the adequacy and effectiveness of the internal supervisory control structure and procedures  not less frequently than once every 3 years.
• Authority to hire experts: The Comptroller General of the United States may hire independent consultants with specialized expertise in any area relevant to the duties .

Triennial Report on Personnel Management

Once every 3 years, the Comptroller General of the United States shall submit 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 on the quality of personnel management by the Commission.

Each report under subsection shall include an evaluation of:

• the effectiveness of supervisors in using the skills, talents, and motivation of the employees of the Commission to achieve the goals of the Commission
• the criteria for promoting employees of the Commission to supervisory positions
• the fairness of the application of the promotion criteria to the decisions of the Commission
• the competence of the professional staff of the Commission
• the efficiency of communication between the units of the Commission regarding the work of the Commission
• the turnover within subunits of the Commission, including the consideration of supervisors whose subordinates have an unusually high rate of turnover
• whether there are excessive numbers of low-level, mid-level, or senior-level managers;
• any initiatives of the Commission that increase the competence of the staff of the Commission
• the actions taken by the Commission regarding employees of the Commission who have failed to perform
• their duties and circumstances under which the Commission has issued to employees a notice of termination

Annual Financial Controls Audit

The Commission will submit a report that :

• Describes the responsibility of the management of the Commission for establishing and maintaining an adequate internal control structure and procedures for financial reporting contains an assessment of the effectiveness of the internal control structure and procedures for financial reporting of the Commission during that fiscal year.
• He will submit a report to Congress that assesses the effectiveness of the internal control structure and procedures of the Commission for financial reporting.

Report On Oversight Of National Securities Associations

The Comptroller General of the United States 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 an evaluation of the oversight by the Commission of national securities associations with respect to:

• the governance of such national securities associations, including the identification and management of conflicts of interest by such national securities associations, together with an analysis of the impact of any conflicts of interest
• regulatory enforcement or rulemaking by such national securities associations;
• the examinations carried out by the national securities associations, including the expertise of the examiners;
• the executive compensation practices of such national securities associations;
• the arbitration services provided by the national securities associations;
• the review performed by national securities associations of advertising by the members of the national securities associations;
• the cooperation with and assistance to State securities administrators by the national securities associations to promote investor protection;
• how the funding of national securities associations is used to support the mission of the national securities associations, including:
  1. the methods of funding
  2. the sufficiency of funds
  3. how funds are invested by the national securities association pending use
  4. the impact of the methods, sufficiency, and investment of funds on regulatory enforcement by the national securities associations
  5. the policies regarding the employment of former employees of national securities associations by regulated entities
  6. the ongoing effectiveness of the rules of the national securities associations in achieving the goals of the rules
  7. the transparency of governance and activities of the national securities associations

A study by an expert is to e conducted to examine the internal operations, structure, funding, and the need for comprehensive reform of the SEC, as well as the SEC’s relationship with and the reliance on self-regulatory organizations and other entities relevant to the regulation of securities and the protection of securities investors that are under the SEC’s oversight.

The specific areas of study include:

1. the possible elimination of unnecessary or redundant units at the SEC
2. improving communications between SEC offices and divisions
3. the need to put in place a clear chain-of-command structure, particularly for enforcement examinations and compliance inspections;
4. the effect of high-frequency trading and other technological advances on the market and what the SEC requires to monitor the effect of such trading and advances on the market
5. the SEC’s hiring authorities, workplace policies, and personal practices, including:
   • a need to further streamline hiring authorities for those who are not lawyers, accountants, compliance examiners, or economists
   • a need for further pay reforms;
   • the diversity of skill sets of SEC employees and whether the present skill set diversity efficiently and effectively fosters the SEC’s mission of investor protection the application of civil service laws by the SEC
   • the SEC’s oversight and reliance on self regulatory organizations promotes efficient and  effective governance for the securities markets
   • the SEC’s reliance on self-regulatory organizations is necessary to promote more efficient and effective governance for the securities markets.

Study on SEC Revolving Door

Government accountability office study.—The Comptroller General of the United States shall conduct a study that will—

• review the number of employees who leave the Securities and Exchange Commission to work for financial institutions regulated by such Commission;
• determine how many employees who leave the Securities and Exchange Commission worked on cases that involved financial institutions regulated by such Commission;
• review the length of time employees work for the Securities and Exchange Commission before leaving to be employed by financial institutions regulated by such Commission;
• review existing internal controls and make recommendations on strengthening such controls to ensure that
• employees of the Securities and Exchange Commission who are later employed by financial institutions did not assist such institutions in violating any rules or regulations of the Commission during the course of their employment with such Commission;
• determine if greater post-employment restrictions are necessary to prevent employees of the Securities and Exchange Commission from being employed by financial institutions after employment with such Commission;
• determine if the volume of employees of the Securities and Exchange Commission who are later employed by financial institutions has led to inefficiencies in enforcement;
• determine if employees of the Securities and Exchange Commission who are later employed by financial institutions assisted such institutions in circumventing Federal rules and regulations while employed by such Commission;
• review any information that may address the volume of employees of the Securities and Exchange Commission who are later employed by financial institutions, and make recommendations to Congress
• review other additional issues as may be raised during the course of the study conducted under this subsection.

Subtitles H: Municipal Securities

Government Accountability Office Study Of Increased Disclosure To Investors

The Comptroller General of the United States shall conduct a study and review of the disclosure required to be made by issuers of municipal securities.

In conducting the study the Comptroller General of the United States shall  broadly describe  the size of the municipal securities markets and the issuers and investors. The disclosures provided by issuers to investors. Compare the amount, frequency, and quality of disclosures that issuers of municipal securities are required by law to provide for the benefit of municipal securities holders, including the amount of and frequency of disclosures actually provided by issuers of municipal securities, with the amount of and frequency of disclosures that issuers of corporate securities provide for the benefit of corporate securities holders, taking into account the differences between issuers of municipal securities and issuers of corporate securities. Evaluate the costs and benefits to various types of issuers of municipal securities of requiring issuers of municipal bonds to provide additional financial disclosures for the benefit of investors. Evaluate the potential benefit to investors from additional financial disclosures by issuers of municipal bonds.

Government Accountability Office Study On The Municipal Securities Markets

The Comptroller General of the United States shall conduct a study of the municipal securities markets.

Not later than 18 months after the date of enactment of this Act, the Comptroller General of the United States shall submit 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, with copies to the Special Committee on Aging of the Senate and the Commission, on the results of the study conducted under subsection including:

• an analysis of the mechanisms for trading, quality of trade executions, market transparency, trade reporting, price discovery, settlement clearing, and credit enhancements;
• the needs of the markets and investors and the impact of recent innovations;
• recommendations for how to improve the transparency, efficiency, fairness, and liquidity of trading in the municipal securities markets
• potential uses of derivatives in the municipal securities markets.

GAO Study of Person To Person Lending

The Comptroller General of the United States shall conduct a study of person to person lending to determine the optimal Federal regulatory structure. The study required under paragraph shall include an examination of:

• the regulatory structure as it exists on the date of enactment of this Act.
• the State and other Federal regulators responsible for the oversight and regulation of person to person lending markets
• any Federal, State, or local government or private studies of person to person lending completed or in progress on the date of enactment of this Act
• consumer privacy and data protections, minimum credit standards, anti-money laundering and risk management in the regulatory structure as it exists on the date of enactment of this Act, and whether additional or alternative safeguards are needed