,,ii  #aafth ,,congress  #ast ,session  
,s4 #bgbd  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,october #bi1  
#bjai,mr4 ,cotton 7for himself1 ,ms4    
,sinema1 ,mr4 ,tillis1 and ,mr4 ,jones7 
introduced the following bill2 which was
 read twice and referred to the         
,committee on ,banking1 ,housing1 and   
,urban ,affairs  ,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 purposes4  #a4      
,short title ,this ,act may be cited as 
the ,small ,business ,audit ,correction 
,act of #bjai4  #b4 ,exemption  7a7     
,amendments to 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
 is registered with the ,commission2    
7,b7 is a member of an association that 
is registered as a national securities  
association under section #ae;,a of the 
,securities ,exchange ,act of #aicd 7#ae

 ,u4,s4,c4 #gho-#c72  7,c7 is 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 has not1 during the   
#aj-year period preceding that date1    
been convicted of a felony under        
,federal or ,state law2  7,e7 does not  
have a person associated with the broker
 or dealer1 as defined in section #c7;a7
 of the ,securities ,exchange ,act of   
#aicd 7#ae ,u4,s4,c4 #gh;c7a771 that1   
during the #aj-year period preceding    
that date1 has been convicted of a      
felony for fraudulent conduct under     
,federal or ,state law2 and  7,f7 is not
 subject to statutory disqualification  
by reason of being-- 7i7 expelled or    
suspended from--  7,i7 an association   
that is registered as described in      
subparagraph 7,b72 or  7,,ii7 an        
association that is registered as a     
registered futures association under    
section #ag of the ,commodity ,exchange 

,act 7#g ,u4,s4,c4 #ba72  7ii7 subject  
to an order of the ,commission1 other   
appropriate regulatory agency1 or       
foreign financial regulatory authority  
denying1 suspending1 or revoking the    
registration of the broker or dealer as 
a regulated entity2  7iii7 subject to an
 order of the ,commodity ,futures       
,trading ,commission1 or other          
appropriate regulatory entity1 denying1 
suspending1 or revoking the registration
 of the broker or dealer under the      
,commodity ,exchange ,act 7#g ,u4,s4,c4 
#a et seq47 or the authority of the     
broker or dealer to engage in any       
transaction2 or  7iv7 subject to a      
restraining order entered by a court4   
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-- 7i7 has not less 
than one and not more than #aej persons 
registered with an association that is  
registered as a national securities     
association under section #ae;,a of the 
,securities ,exchange ,act of #aicd 7#ae
 ,u4,s4,c4 #gho-#c72  7ii7 is not a high
 frequency trading broker or dealer1 as 
that term is defined by the ,commission 
with respect to a particular registered 
firm type2 and  7iii7 is not affiliated 
with an investment advisor that-- 7,i7  
is registered with the ,commission or a 
,state entity2 and  7,,ii7 acts as the  
custodian for customer assets2  7,b7    
with respect to the average of the three
 most recently completed fiscal years of
 the broker or dealer1 has gross revenue
 that enables the broker or dealer to   
qualify as a small business concern for 
the purposes of a program administered  
by the ,small ,business ,administration2
 and  7,c7 throughout the most recently 
completed fiscal year of the broker or  
dealer-- 7i7 does 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  
if required under section #c7;a77#b7 of 
the ,securities ,investor ,protection   
,act of #aigj 7#ae ,u4,s4,c4            
#gh;ccc7a77#b771 is a member of the     
,securities ,investor ,protection       
,corporation2 and  7iii7 either-- 7,i7  
if the broker or dealer is subject to   
section #bdj4ae;c#c-c of title #ag1     
,code of ,federal ,regulations1 or any  
successor regulation1 is in compliance  
with that section2 or  7,,ii7 is not    
subject to such section #bdj4ae;c#c-c1  
or any successor regulation1 because the
 broker or dealer does 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  7#a7 ,definitions ,in this 
subsection1 the terms in good standing1 
non-custody broker or dealer1 and       
privately held have the meanings given  
the terms in section #aaj of the        
,sarbanes-,oxley ,act of #bjjb 7#ae     
,u4,s4,c4 #gbbj71 as amended by         
subsection 7a74  7#b7 ,amendments ,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 exclude the auditors of non-custody
 brokers or dealers that are privately  
held and in good standing 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