,,ib  ,union ,calendar ,no4 #hcd  #aaeth
 ,,congress  #b;d ,session  ,h4 ,r4     
#fjba  ,report ,no4 #aae-ajge  ,,in     
,,the ,,house ,,of ,,representatives    
,june #f1 #bjah ,mr4 ,hill 7for himself 
and ,mr4 ,gonzalez of ,texas7 introduced
 the following bill2 which was referred 
to the ,committee on ,financial         
,services  ,december #ab1               
#bjah;,additional sponsor3 ,mr4 ,beyer  
,december #ab1 #bjah ,reported with     
amendments1 committed to the ,committee 
of the ,whole ,house on the ,state of   
the ,union1 and ordered to be printed   
,strike out all after the enacting      
clause and insert the part printed in   
italic ,for text of introduced bill1 see
 copy of bill as introduced on ,june #f1
 #bjah  ,a ,,bill  ,to amend the        
,sarbanes-,oxley ,act of #bjjb to       
exclude privately held1 non-custody     
brokers and dealers that are in good    
standing from certain requirements under
 title ,i of that ,act1 and for other   
purposes4  #a4 ,short title ,this ,act  

may be cited as the ,small ,business    
,audit ,correction ,act of #bjah4  #b4  
,exemption  7a7 ,amendments to title ,i 
of the ,sarbanes-,oxley ,act of #bjjb   
,section #aaj of the ,sarbanes-,oxley   
,act of #bjjb 7#ae ,u4,s4,c4 #gbbj7 is  
amended--  7#a7 in paragraph 7#c71 by   
inserting 1 except that the term does   
not include a non-custody broker or     
dealer that is privately held and in    
good standing after registered public   
accounting firm2  7#b7 in paragraph     
7#d71 by inserting 1 except that the    
term does not include a non-custody     
broker or dealer that is privately held 
and in good standing after registered   
public accounting firm2  7#c7 by        
redesignating paragraphs 7#e7 and 7#f7  
as paragraphs 7#h7 and 7#i71            
respectively2 and  7#d7 by inserting    
after paragraph 7#d7 the following3     
7#e7 ,in good standing ,the term in good
 standing means1 with respect to a      
broker or dealer 7as those terms are    
defined in section #c7;a7 of the        

,securities ,exchange ,act of #aicd 7#ae
 ,u4,s4,c4 #gh;c7a7771 that1 as of the  
last day of the most recently completed 
fiscal year of the broker or dealer1 as 
applicable1 the broker or dealer--  7,a7
 was registered with the ,commission2   
7,b7 was a member of a registered       
securities association 7as defined under
 section #ae;,a of the ,securities      
,exchange ,act of #aicd 7#ae ,u4,s4,c4  
#gho-#c772  7,c7 was compliant with the 
minimum dollar net capital requirements 
under section #bdj4ae;c#c-a of title    
#ag1 ,code of ,federal ,regulations1 or 
any successor regulation2  7,d7 had not1
 during the #aj-year period preceding   
that date1 been convicted of a felony   
under ,federal or ,state law2  7,e7 does
 not have an associated person 7as that 
term is defined in section #c7;a7 of the
 ,securities ,exchange ,act of #aicd    
7#ae ,u4,s4,c4 #gh;c7a777 who1 during   
the #aj-year period preceding that date1
 was convicted of a felony under        
,federal or ,state laws for fraudulent  

conduct2 and  7,f7 was not1 as provided 
by section #c7;a77#ci7 of the           
,securities ,exchange ,act of #aicd 7#ae
 ,u4,s4,c4 #gh;c7a77-- 7i7 expelled or  
suspended from membership or            
participation in any self-regulatory    
organization 7as provided in section    
#c7;a77#bf7 of the ,securities ,exchange
 ,act of #aicd 7#ae ,u4,s4,c4           
#gh;c7a77#bf777 or a registered futures 
association 7as provided in section #ag 
of the ,commodity ,exchange ,act 7#g    
,u4,s4,c4 #ba772  7ii7 subject to an    
order of the ,commission1 or other      
appropriate regulatory agency1 denying1 
suspending1 or revoking its registration
 as any regulated entity2 or  7iii7     
subject to an order of the ,commodity   
,futures ,trading ,commission1 or other 
appropriate regulatory agency1 denying1 
suspending1 or revoking its registration
 under the ,commodity ,exchange ,act 7#g
 ,u4,s4,c4 #a et seq47 or its authority 
to engage in any transactions4  7#f7    
,non-custody broker or dealer ,the term 

non-custody broker or dealer means a    
broker or dealer 7as those terms are    
defined in section #c7;a7 of the        
,securities ,exchange ,act of #aicd 7#ae
 ,u4,s4,c4 #gh;c7a7771 as applicable1   
that--  7,a7 as of the last day of the  
most recently completed fiscal year of  
the broker or dealer had not less than  
#a and not more than #aej associated    
persons 7as that term is defined in     
section #c7;a7 of the ,securities       
,exchange ,act of #aicd 7#ae ,u4,s4,c4  
#gh;c7a777 registered with a            
self-regulatory organization 7as        
provided in section #c7;a77#bf7 of the  
,securities ,exchange ,act 7#ae         
,u4,s4,c4 #gh;c7a77#bf777 of which the  
broker or dealer is a member2 and  7,b7 
throughout the most recently completed  
fiscal year of the broker or dealer--   
7i7 did not1 as a matter of ordinary    
business practice in connection with the
 activities of the broker or dealer1    
receive customer checks1 drafts1 or     
other evidence of indebtedness made     

payable to the broker or dealer2  7ii7  
promptly forwarded customer securities  
and customer checks1 drafts1 or other   
evidence of indebtedness payable to a   
third party1 including a clearing broker
 or dealer1 in compliance with section  
#bdj4ae;c#c-c of title #ag1 ,code of    
,federal ,regulations1 or any successor 
regulation2  7iii7 did not otherwise    
hold customer securities or cash2  7iv7 
if required under section #c7;a77#b7 of 
the ,securities ,investor ,protection   
,act of #aigj 7#ae ,u4,s4,c4            
#gh;ccc7a77#b771 was a member of the    
,securities ,investor ,protection       
,corporation2 and  7v7 either-- 7,i7    
claimed exemption from section          
#bdj4ae;c#c-c of title #ag1 ,code of    
,federal ,regulations1 or any successor 
regulation2 or  7,,ii7 claimed no       
exemption from such section             
#bdj4ae;c#c-c1 or any successor         
regulation1 or was not otherwise subject
 to such1 because the broker or dealer  
did not maintain custody over any       

customer securities or cash4  7#g7      
,privately held ,the term privately held
 means1 with respect to a broker or     
dealer 7as those terms are defined in   
section #c7;a7 of the ,securities       
,exchange ,act of #aicd 7#ae ,u4,s4,c4  
#gh;c7a7771 that the broker or dealer1  
as applicable1 is not an issuer4  4  7b7
 ,amendments to regulations ,not later  
than #ahj days after the date of        
enactment of this ,act1 the ,securities 
and ,exchange ,commission shall make any
 necessary amendments to regulations of 
the ,commission that are in effect as of
 the date of enactment of this ,act in  
order to--  7#a7 carry out this ,act and
 the amendments made by this ,act2 and  
7#b7 to exclude the auditors of         
non-custody brokers and dealers that are
 privately held and in good standing 7as
 such terms are defined under section   
#aaj of the ,sarbanes-,oxley ,act of    
#bjjb7 from the audit requirements of   
the ,public ,company ,accounting        
,oversight ,board4  7c7 ,effective date 

,this ,act1 and the amendments made by  
this ,act1 shall take effect on the date
 that is #ahj days after the date of    
enactment of this ,act4  ,amend the     
title so as to read3 ,a bill to amend   
the ,sarbanes-,oxley ,act of #bjjb to   
exclude the audits of privately held1   
non-custody brokers and dealers that are
 in good standing from certain          
requirements under title ,i of that     
,act1 and for other purposes44          
,december #ab1 #bjah ,reported with     
amendments1 committed to the ,committee 
of the ,whole ,house on the ,state of   
the ,union1 and ordered to be printed