H.R. 9329 — SEC Reform and Restructuring Act

This section requires the Securities and Exchange Commission, before proposing or issuing any regulation, to identify the problem addressed and impacted market participants, use its Chief Economist to assess qualitative and quantitative costs and benefits both standalone and cumulatively with other rules, issue the regulation only if benefits justify costs, ensure plain language and an appropriate comment period, and consider effects on efficiency, competition, capital formation, investor choice, market liquidity, small businesses, and investor access. For major rules, the Commission must also establish a post-adoption assessment plan and submit a report within four years.

This section requires the Chairman of the Securities and Exchange Commission to testify before the House Committee on Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs at least once every six months on the activities of the Commission, and requires the other Commissioners to join the Chairman for such testimony at least once annually.

This section directs the Comptroller General to audit the Securities and Exchange Commission’s information technology infrastructure and data handling within one year after enactment. The audit compares the Commission’s IT spending to that of other federal financial regulators, examines IT contracting quality and cybersecurity sufficiency, reviews recent data events such as breaches, and requires a report with findings and recommendations to the Commission, the House Financial Services Committee, and the Senate Banking Committee.

This section requires the Securities and Exchange Commission to consider the effects of rules under the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the Investment Advisers Act of 1940 when considered individually or cumulatively with other related rules or regulations or other related and recent proposed rules or regulations.

This section transfers the Public Company Accounting Oversight Board’s functions to the Securities and Exchange Commission’s Office of Public Accounting Oversight within the Office of the Chief Accountant, renames the entity accordingly, and terminates the existing Board 2 years after enactment. It repeals the Board’s authority to conduct inspections of registered firms, investigations and disciplinary proceedings, and related Commission oversight.

This section terminates the Public Company Accounting Oversight Board and establishes the Office of Public Accounting Oversight within the SEC’s Office of the Chief Accountant. It places the Chief Accountant in charge as Director, transfers all registration, standard-setting, inspection, investigation, and disciplinary authority over public accounting firms to the Commission, converts existing Board rules into Commission rules, and requires the Office to maintain a continuing inspection program and fair procedures for investigations and discipline.

This section changes the heading of 15 U.S.C. 7212 to “Registration with the Office.” It limits specification of additional required information in public accounting firm registration applications to rules of the Commission (from the Board or the Commission) and removes Board-related consent requirements and references in subsections (c), (d), and (e).

This section revises the heading for the provision on auditing, quality control, and ethics standards. It removes the requirement that standard-setting by designated professional groups of accountants be subject to section 107 of the Sarbanes-Oxley Act, eliminates the subparagraph governing Commission approval of such designations, and shifts responsibility for reporting on the Board’s activities from the Board’s annual report to the Commission’s annual performance report to Congress.

This section removes the Public Company Accounting Oversight Board from oversight of foreign public accounting firms that prepare or furnish audit reports for issuers, brokers, or dealers. It subjects such firms only to the Sarbanes-Oxley Act and the rules of the Securities and Exchange Commission, and eliminates Board authority to require document production or assert jurisdiction over them.

This section authorizes the Commission to establish the annual budget and accounting support fee for the Office (from the Board), makes Office funding from such fees and use of monetary penalties for merit scholarships permissive rather than mandatory, and eliminates subsection (k).

This section revises definitions in the Sarbanes-Oxley Act by limiting the definition of "audit" to examinations conducted under Commission rules (from Board or Commission rules) and by defining "professional standards" as those determined by the Commission (from the Board or the Commission). It also establishes the Office of Public Accounting Oversight within the Office of the Chief Accountant of the Commission.

This section abolishes the Public Company Accounting Oversight Board and transfers its functions and authority to the Securities and Exchange Commission. It updates definitions in 15 U.S.C. 7201 to replace all references to the Board with the Commission, removes the Board definition and related provisions, revises the title of Title I to the Office of Public Accounting Oversight, and eliminates Board-related sections on inspections, investigations, and enforcement.

This section preserves cooperative arrangements between the Public Company Accounting Oversight Board and foreign auditor oversight authorities that remain in effect two years after the date of enactment.

This section requires the Comptroller General to study, beginning not later than one year after enactment and every three years thereafter, the major rules issued by the Securities and Exchange Commission since the prior review. Each study must include a cost-benefit analysis, a comparison of projected and actual costs, and an evaluation of effects on capital formation, market efficiency, and investor protection; if more than ten major rules apply, only the ten most significant are reviewed. The Comptroller General must report results to the House Financial Services Committee and Senate Banking Committee within one year after completing each study.

This section requires the Securities and Exchange Commission to provide a public comment period of at least 60 days for proposed rulemakings under 5 U.S.C. 553, or at least 30 days if the Commission determines the rule addresses imminent investor harm. Federal holidays are excluded from the calculation, and the period begins on the date of Federal Register publication.

This section establishes rules for counting violations when imposing civil penalties under the Securities Act of 1933, Securities Exchange Act of 1934, Investment Company Act of 1940, and Investment Advisers Act of 1940. Separate acts of noncompliance count as a single violation if they result from a common or substantially overlapping originating cause, the same misstatement or omission, or a continuing failure to comply.

This section requires the Chairman of the Securities and Exchange Commission to review the agency's organizational structure within 180 days after enactment and, within 90 days after completing the review, reorganize to reduce the number of offices and officials reporting directly to the Chairman. It also directs submission of a report to the House Financial Services Committee and Senate Banking Committee detailing the changes and permits consolidation of regional offices if the Commission determines it appropriate.