A news release from the House Financial Services Committee said the vote on H.R. 3817, sponsored by Representative Paul E. Kanjorski (D-Pennsylvania), was 41 to 28. Kanjorski is chairman of the Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises.
Among the bill’s provisions is what the news release called a “harmonized standard” for fiduciary responsibilities of broker-dealers and investment advisers. The bill also doubles the SEC’s funding over five years and provides new enforcement power and regulatory authority.
The measure fixes what backers say are holes in the Securities Investor Protection Act, which returns money to customers of insolvent fraudulent broker-dealers, and the Public Company Accounting Oversight Board (PCAOB). The PCAOB has lacked the powers it needed to examine the auditors of broker-dealers, according to the announcement.
“In order to maintain a sound economy, we must improve investor protection and confidence,” said Kanjorski, in the announcement. “The Investor Protection Act aims to achieve these goals while also improving enforcement powers at the U.S. Securities and Exchange Commission and implementing a fiduciary standard for broker-dealers and investment advisers to ensure that customers’ interests are at the forefront of investment recommendations.”
The bill also provides a “bounty program” to create incentives for whistleblowers to identify wrongdoing in the securities markets and ends mandatory arbitration requirements for defrauded investors seeking redress.