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October 14, 2019 at 05:15 PM
The House Rules Committee was poised to vote Monday on putting a bill up for a House vote that would require the Securities and Exchange Commission to conduct investor testing when developing rules on disclosures.
H.R. 1815, the SEC Disclosure Effectiveness Testing Act, would require that when developing rules and regulations about disclosures to retail investors, the SEC would have to conduct investor testing, including a survey and interviews of retail investors.
The House Financial Services Subcommittee on Investor Protection, Entrepreneurship and Capital Markets debated the bill during its March hearing on the SEC’s advice-standards package, including Regulation Best Interest.
HR 1815 was introduced by Rep. Sean Casten, D-Ill., during the March hearing and would require the SEC to conduct usability testing on the agency’s new disclosure forms before finalizing Reg BI, a plan that the subcommittee’s chairwoman, Rep. Carolyn Maloney, D-N.Y., said was “an excellent idea.”
The commission did conduct investor testing on the new Customer Relationship Summary form, or Form CRS, which was required as part of the advice-standards package that includes Reg BI. Those rules were finalized in June.
However, the bill includes a host of amendments to be debated on the House floor. One would exempt Form CRS from the bill’s investor testing requirements.
