S.Amdt. 1034

SA 1034. Mr. ENSIGN submitted an amendment intended to be proposed to
amendment SA 1018 submitted by Mr. Dodd (for himself and Mr. Shelby) to
the bill S. 896, to prevent mortgage foreclosures and enhance mortgage
credit availability; which was ordered to lie on the table; as follows:

On page 64, after line 16, add the following:

TITLE V--PUBLIC-PRIVATE INVESTMENT PROGRAMS

SEC. 501 PUBLIC-PRIVATE INVESTMENT PROGRAMS.

(a) In General.--Subsection (b) shall apply to any program
established by the Secretary of the Treasury or the Board of
Directors of the Federal Deposit Insurance Corporation that--
(1) creates a public-private investment fund;
(2) makes available any funds from the Troubled Asset
Relief Program established under title I of the Emergency
Economic Stabilization Act of 2008 (12 U.S.C. 5211 et seq.)
or the Federal Deposit Insurance Corporation for--
(A) a public-private investment fund; or
(B) a loan to a private investor to fund the purchase of a
mortgage-backed security or an asset-backed security;
(3) employs or contracts with a private sector partner to
manage assets for a public-private investment program; or
(4) guarantees any debt or asset for purposes of a public-
private investment program.
(b) Requirements.--Any program described in subsection (a)
shall--
(1) impose strict conflict of interest rules on managers of
public-private investment funds that--
(A) specifically describe the extent, if any, to which such
managers may--
(i) invest the assets of a public-private investment fund
in assets that are held or managed by such managers or the
clients of such managers; and
(ii) conduct transactions involving a public-private
investment fund and an entity in which such manager or a
client of such manager has invested;

[[Page S5029]]

(B) take into consideration that there is a trade-off
between hiring a manager having significant experience as an
asset manager that has complex conflicts of interest, and
hiring a manager having less expertise that has no conflicts
of interest; and
(C) acknowledge that the types of entities that are
permitted to make investment decisions for a public-private
investment fund may need to be limited to mitigate conflicts
of interest;
(2) require the disclosure of information regarding
participation in and management of public-private investment
funds, including any transaction undertaken in a public-
private investment fund;
(3) require each public-private investment fund to make a
certified report to the Secretary of the Treasury that
describes each transaction of such fund and the current value
of any assets held by such fund, which report shall be
publicly disclosed by the Secretary of the Treasury;
(4) require each manager of a public-private investment
fund to report to the Secretary of the Treasury any holding
or transaction by such manager or a client of such manager in
the same type of asset that is held by the public-private
investment fund;
(5) allow the Special Inspector General of the Troubled
Asset Relief Program, access to all books and records of a
public-private investment fund;
(6) require each manager of a public-private investment
fund to retain all books, documents, and records relating to
such public-private investment fund, including electronic
messages;
(7) allow the Special Inspector General of the Troubled
Asset Relief Program, the Secretary of the Treasury, and any
other Federal agency having oversight responsibilities with
respect to a public-private investment fund access to--
(A) the books, documents, records, and employees of each
manager of a public-private investment fund; and
(B) the books, documents, and records of each private
investor in a public-private investment fund that relate to
the public-private investment fund;
(8) require each manager of a public-private investment
fund to give such public-private investment fund terms that
are at least as favorable as those given to any other person
for whom such manager manages a fund;
(9) require each manager of a public-private investment
fund to acknowledge a fiduciary duty to the public and
private investors in such fund;
(10) require each manager of a public-private investment
fund to develop a robust ethics policy that includes methods
to ensure compliance with such policy;
(11) require stringent investor screening procedures for
public-private investment funds that include ``know your
customer'' requirements that are at least as rigorous as
those of a commercial bank or retail brokerage operation;
(12) require each manager of a public-private investment
fund to identify for the Secretary of the Treasury each
beneficial owner of a private interest in such fund; and
(13) require the Secretary of the Treasury to ensure that
all investors in a public-private investment fund are
legitimate.
(c) Report.--Not later than 45 days after the date of the
establishment of a program described in subsection (a), the
Special Inspector General of the Troubled Asset Relief
Program shall submit to Congress a report on the
implementation of this section.
(d) Definition.--In this section, the term ``public-private
investment fund'' means a financial vehicle that is--
(1) established by the Federal Government to purchase pools
of loans, securities, or assets from a financial institution
described in section 101(a)(1) of the Emergency Economic
Stabilization Act of 2008 (12 U.S.C. 5211(a)(1)); and
(2) funded by a combination of cash or equity from private
investors and funds provided by the Secretary of the
Treasury, the Federal Deposit Insurance Corporation, or the
Board of Governors of the Federal Reserve System.
______