,i #aahth ,,congress #ast ,session ,h4 ,r4 #dbcg ,,in ,,the ,,house ,,of ,,representatives ,june #ba1 #bjbc,mr4 ,barr 7for himself1 ,mr4 ,allen1 and ,mr4 ,huizenga7 introduced the following bill2 which was referred to the ,committee on ,financial ,services1 and in addition to the ,committee on ,education and the ,workforce1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to amend the ,investment ,advisers ,act of #aidj and the ,employee ,retirement ,income ,security ,act of #aigd to specify requirements concerning the consideration of pecuniary and non-pecuniary factors4 #a4 ,short title ,this ,act may be cited as the ,ensuring ,sound ,guidance ,act4 #b4 ,investment ,advisors ,act of #aidj amendment 7a7 ,in general ,section #baa7;g7 of the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#aa7;g77 is amended by adding at the end the following3 7#c7 ,best interest based on pecuniary factors 7,a7 ,in general ,for purposes of paragraph 7#a71 the best interest of a customer shall be determined using pecuniary factors1 which may not be subordinated to or limited by non-pecuniary factors1 unless the customer provides informed consent1 in writing1 that such non-pecuniary factors be so considered4 7,b7 ,disclosure of pecuniary factors ,if a customer provides a broker1 dealer1 or investment adviser with the informed consent to consider non-pecuniary factors described under subparagraph 7,a71 the broker1 dealer1 or investment adviser shall also-- 7i7 disclose the expected pecuniary effects to the customer over a time period selected by the customer and not to exceed three years2 and 7ii7 at the end of the time period described under clause 7i71 disclose1 by comparison to a reasonably comparable index or basket of securities selected by the customer1 the actual pecuniary effects of that time period1 including all fees1 costs1 and other expenses incurred to so consider non-pecuniary factors4 7,c7 ,pecuniary factor defined ,the term pecuniary factor has the meaning given such term in section #djd7;a77#c77;,d7 of the ,employment ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajd7;a77#c77;,d774 4 7b7 ,rulemaking ,not later than the end of the #ab-month period beginning on the date of enactment of this ,act1 the ,securities and ,exchange ,commission shall revise or issue such rules as may be necessary to implement the amendment made by subsection 7a74 7c7 ,effective date ,the amendment made by subsection 7a7 shall apply to actions taken by a broker1 dealer1 or investment adviser on or after the date that is #ab months after the date of enactment of this ,act4 #c4 ,employee ,retirement ,income ,security ,act of #aigd amendment 7a7 ,in general ,section #djd7;a7 of the ,employee ,retirement ,income ,security ,act of #aigd 7#bi ,u4,s4,c4 #aajd7;a77 is amended by adding at the end the following3 7#c7 ,interest based on pecuniary factors 7,a7 ,in general ,for purposes of paragraph 7#a71 a fiduciary of a plan shall be considered to act solely in the interest of the participants and beneficiaries of the plan with respect to an investment or investment course of action only if the fiduciary's action with respect to such investment or investment course of action is based only on pecuniary factors 7except as provided in subparagraph 7,b774 ,the fiduciary may not subordinate the interests of the participants and beneficiaries in their retirement income or financial benefits under the plan to other objectives and may not sacrifice investment return or take on additional investment risk to promote non-pecuniary benefits or goals4 ,the weight given to any pecuniary factor by a fiduciary should appropriately reflect a prudent assessment of the impact of such factor on risk and return4 7,b7 ,use of non-pecuniary factors for investment alternatives ,notwithstanding paragraph 7,a71 if a fiduciary is unable to distinguish between or among investment alternatives or investment courses of action on the basis of pecuniary factors alone1 the fiduciary may use non-pecuniary factors as the deciding factor if the fiduciary documents-- 7i7 why pecuniary factors were not sufficient to select a plan investment or investment course of action2 7ii7 how the selected investment compares to the alternative investments with regard to the composition of the portfolio with regard to diversification1 the liquidity and current return of the portfolio relative to the anticipated cash flow requirements of the plan1 and the projected return of the portfolio relative to the funding objectives of the plan2 and 7iii7 how the selected non-pecuniary factor or factors are consistent with the interests of the participants and beneficiaries in their retirement income or financial benefits under the plan4 7,c7 ,investment alternatives for participant-directed individual account plans ,in selecting or retaining investment options for a pension plan described in subsection 7c77#a77;,a71 a fiduciary is not prohibited from considering1 selecting1 or retaining an investment option on the basis that such investment option promotes1 seeks1 or supports one or more non-pecuniary benefits or goals1 if-- 7i7 the fiduciary satisfies the requirements of paragraph 7#a7 and subparagraphs 7,a7 and 7,b7 of this paragraph in selecting or retaining any such investment option2 and 7ii7 such investment option is not added or retained as1 or included as a component of1 a default investment under subsection 7c77#e7 7or any other default investment alternative7 if its investment objectives or goals or its principal investment strategies include1 consider1 or indicate the use of one or more non-pecuniary factors4 7,d7 ,pecuniary factor defined ,for the purposes of this paragraph1 the term pecuniary factor means a factor that a fiduciary prudently determines is expected to have a material effect on the risk or return of an investment based on appropriate investment horizons consistent with the plan's investment objectives and the funding policy established pursuant to section #djb7;b77#a74 4 7b7 ,effective date ,the amendments made by this section shall apply to actions taken by a fiduciary on or after the date that is #ab months after the date of enactment of this ,act4 #d4 ,study of ,state and local pension plans 7a7 ,study ,the ,comptroller ,general of the ,united ,states shall conduct a study on the potential impact of underfunded ,state and local pension plans on the ,federal ,government1 including-- 7#a7 the extent to which such pension plans subordinate the pecuniary interests of participants and beneficiaries to environmental1 social1 governance1 or other objectives2 and 7#b7 legislative and administrative actions that1 if implemented at the ,federal level1 would prevent such pension plans from subordinating the interests of participants and beneficiaries to environmental1 social1 or governance objectives4 7b7 ,report ,not later than #ab months after the date of enactment of this ,act1 the ,comptroller ,general submit to ,congress a report containing the results of the study4 #e4 ,study on climate change and other environmental disclosures in municipal bond market 7a7 ,in general ,the ,securities and ,exchange ,commission shall solicit public comment and thereafter conduct a study to determine the extent to which issuers of municipal securities 7as such term is defined in section #c7;a77#bi7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a77#bi77 make disclosure to investors regarding climate change and other environmental matters4 7b7 ,contents ,the study under subsection 7a7 shall consider and analyze1 among other things-- 7#a7 the frequency of such disclosures2 7#b7 whether such disclosures made by issuers of municipal securities in connection with offerings of securities align with such disclosures made by issuers of municipal securities in other contexts or to other audiences other than investors2 7#c7 any voluntary or mandatory disclosure standards observed by issuers of municipal securities in the course of making such disclosures2 and 7#d7 the degree to which investors consider such disclosures in connection with making an investment decision4 7c7 ,report ,the ,securities and ,exchange ,commission shall issue a report on the study required under this section to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives not later than #ab months after the date of enactment of this ,act4 ,the report shall include a detailed discussion of the financial risks to investors from investments in municipal securities and whether those risks are being adequately disclosed as well as a discussion of regulatory or legislative steps that are recommended or that may be necessary to address any concerns identified in the study4 #f4 ,study on solicitation of municipal securities business 7a7 ,in general ,the ,securities and ,exchange ,commission shall solicit public comment and thereafter conduct a study to determine the effectiveness of ,rule ,g-#ch of the ,municipal ,securities ,rulemaking ,board and ,rule #bjf7d7-e of the ,securities and ,exchange ,commission 7#ag ,,cfr #bge4bjf7d7-e7 in preventing the payment of funds to elected officials or candidates for elected office in exchange for the receipt of government business in connection with the offer or sale of municipal securities 7as such term is defined in section #c7;a77#bi7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c7a77#bi774 7b7 ,contents ,the study under subsection 7a7 shall consider and analyze1 among other things-- 7#a7 whether ,rule ,g-#ch and ,rule #bjf7d7-e have had their intended effects and whether they have had any unintended adverse effects2 7#b7 the frequency and scope of enforcement actions undertaken under ,rule ,g-#ch and ,rule #bjf7d7-e2 7#c7 the degree to which persons subject to ,rule ,g-#ch and ,rule #bjf7d7-e have put in place policies and procedures intended to ensure compliance with such rules2 7#d7 the degree to which other ,state and ,federal regulations impact the solicitation of municipal securities business2 and 7#e7 the degree to which persons subject to ,rule ,g-#ch and ,rule #bjf7d7-e are disadvantaged from participating in the political process both as a general matter and relative to persons who solicit or receive government business or government licenses1 permits1 and approvals other than in connection with the offer or sale of municipal securities4 7c7 ,report ,the ,securities and ,exchange ,commission shall issue a report on the study required under this section to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives not later than #ab months after the date of enactment of this ,act4 ,the report shall include a discussion of the extent to which persons affiliated with small businesses1 as well as persons affiliated with minority and women opened businesses1 have been affected by ,rule ,g-#ch and ,rule #bjf7d7-e and a discussion of regulatory or legislative a discussion of regulatory or legislative steps that are recommended or that may be necessary to address any concerns identified in the study4