Sec. 1001. Protecting retail investors’ savings

264 words·~1 min read·/bill/119/hr/8286/ih/section-1001

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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: For purposes of paragraph (1), when providing personalized investment advice, the best interest of a customer shall be determined using pecuniary factors, which, subject to applicable law, may not be subordinated to or limited by non-pecuniary factors, unless— the customer provides informed consent, whether by e-delivery or e-sign, that such non-pecuniary factors be considered; or the personalized investment advice is consistent with the customer’s written investment profile information.

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 provide qualitative disclosure of the potential pecuniary effects to the customer of prioritizing non-pecuniary factors over pecuniary factors in making investment decisions. 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 investment objectives, risk tolerance, and time horizon. .

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 paragraph (1). The amendment made by paragraph

(1)shall apply to a recommendation made by a broker or dealer and investment advice provided by an investment adviser beginning on the date that is 12 months after the date of enactment of this Act.

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15 USC 80b–11(g)

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Sec. 1001

Protecting retail investors’ savings

Cite15 USC 80b–11(g)

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