S.Amdt. 3792

SA 3792. Mrs. BOXER submitted an amendment intended to be proposed to
amendment SA 3739 proposed by Mr. Reid (for Mr. Dodd (for himself and
Mrs. Lincoln)) to the bill S. 3217, to promote the financial stability
of the United States by improving accountability and transparency in
the financial system, to end ``too big to fail,'' to protect the
American taxpayer by ending bailouts, to protect consumers from abusive
financial services practices, and for other purposes; which was ordered
to lie on the table; as follows:

At the end of title VII, add the following:

Subtitle C--Fiduciary Duty

SEC. 781. SECURITIES EXCHANGE ACT.

The Securities Exchange Act of 1934 (15 U.S.C. 78a et
seq.), as amended by this Act, is further amended by
inserting after section 10D, the following:

``SEC. 10E. FIDUCIARY DUTY.

``(a) In General.--Each financial services provider shall
be subject to a fiduciary duty, the obligations of which
shall depend upon the particular facts and circumstances, to
any covered client with respect to any individualized advice
or individualized recommendation provided, directly or
indirectly, to such client in connection with any transaction
involving the purchase or sale of--
``(1) a security, as defined in section 2(a)(1) of the
Securities Act of 1933 (15 U.S.C. 77b(a)(1));
``(2) any CEA-regulated financial instrument; or
``(3) any financial instrument, the value of which is
derived from a security, CEA-regulated financial instrument,
or other financial instrument.
``(b) Enforcement.--This section shall be enforced--
``(1) as to persons who are subject to the jurisdiction of
a Federal functional regulator--
``(A) by that regulator in Federal courts;
``(B) by the office of the Attorney General of the United
States in Federal courts; or
``(C) by State attorneys general or State administrative
agencies in State courts; and
``(2) as to persons who are not described in paragraph
(1)--
``(A) by the Securities and Exchange Commission or the
Commodity Futures Trading Commission in Federal courts;
``(B) by the office of the Attorney General of the United
States in Federal courts; or
``(C) by State attorneys general or State administrative
agencies in State courts.
``(c) Authority to Define Duty.--As to persons who are
subject to the jurisdiction of a Federal functional
regulator, that regulator may, by rule, define and clarify
the fiduciary duty referred to in subsection (a) with respect
to such persons.
``(d) Limitation.--The fiduciary duty referred to in
subsection (a) shall not apply to advice that is subject to
the fiduciary duty under section 404(a) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1104(a)) in
connection with a relationship that is subject to that
section.
``(e) Definitions.--For purposes of this section--
``(1) the term `financial services provider' means any
person who, for compensation, is in the business of providing
advice regarding, creating, underwriting, buying, selling,
effecting transactions in or dealing in the financial
instruments described in subparagraphs (1), (2), or (3) of
subsection (a);
``(2) the term `individualized' means any advice or
recommendation that reflects the particular needs or
circumstances of the covered client to which it is provided;
``(3) the term `covered client' means--
``(A) any pension plan as defined in section 3(2)(A) of the
Employee Retirement and Income Security Act of 1974 (29
U.S.C. 1002(2)(A));
``(B) any employee benefit plan described under paragraph
(1) or (3) of section 4(b) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1003(b)(1), (3)); and
``(C) any State and any county, municipality, political
subdivision, agency or instrumentality of a State and any
Federal agency or instrumentality thereof;
``(4) the term `CEA-regulated financial instrument' means
any financial instrument regulated by the Commodity Futures
Trading Commission or under the Commodity Exchange Act (7
U.S.C. 1 et seq.); and
``(5) the term `Federal functional regulator' means--
``(A) the Board of Governors of the Federal Reserve System;
``(B) the Office of the Comptroller of the Currency;
``(C) the Board of Directors of the Federal Deposit
Insurance Corporation;
``(D) the National Credit Union Administration;
``(E) the Securities and Exchange Commission;
``(F) the Commodity Futures Trading Commission;
``(G) the Director of the Federal Housing Finance Agency;
and
``(H) the Bureau of Consumer Financial Protection.''.

SEC. 782. COMMODITY EXCHANGE ACT.

Section 6b of the Commodity Exchange Act (7 U.S.C. 6b) is
amended by adding at the end the following:
``(e) Fiduciary Duty.--
``(1) In general.--A financial services provider shall be
subject to a fiduciary duty, the obligations of which shall
depend upon the particular facts and circumstances, to any
covered client with respect to any individualized advice or
individualized recommendation provided, directly or
indirectly, to such client in connection with any transaction
involving the purchase or sale of--
``(A) a security, as defined in section 2(a)(1) of the
Securities Act of 1933 (15 U.S.C. 77b(a)(1));
``(B) any CEA-regulated financial instrument; or
``(C) any financial instrument the value of which is
derived from a security, CEA-regulated financial instrument,
or other financial instrument.
``(2) Enforcement.--This section shall be enforced--
``(A) as to persons who are subject to the jurisdiction of
a Federal functional regulator--
``(i) by that regulator in Federal courts;
``(ii) by the office the Attorney General of the United
States in Federal courts; or
``(iii) by State attorneys general or State administrative
agencies in State courts; and
``(B) as to other persons--
``(i) by the Securities and Exchange Commission or the
Commodity Futures Trading Commission in Federal courts;
``(ii) by the office the Attorney General of the United
State in Federal courts; or
``(iii) by State attorneys general or State administrative
agencies in State courts.
``(3) Authority to define duty.--As to persons who are
subject to the jurisdiction of a Federal functional
regulator, that regulator may, by rule, define and clarify
the fiduciary duty referred to in paragraph (1) with respect
to such persons.
``(4) Limitation.--The fiduciary duty referred to in
paragraph (1) shall not apply to advice that is subject to
the fiduciary duty under section 404(a) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1104(a)) in
connection with a relationship that is subject to that
section.
``(5) Definitions.--For purposes of this subsection--
``(A) the term `financial services provider' means any
person who, for compensation, engages in the business of
providing advice regarding, creating, underwriting, buying,
selling, effecting transactions in or dealing in the
financial instruments described in subparagraphs (A), (B), or
(C) of paragraph (1);
``(B) the term `individualized' means any advice or
recommendation that reflects the particular needs or
circumstances of the covered client to which it is provided;
``(C) the term `covered client' means--
``(i) any pension plan as defined in section 3(2)(A) of the
Employee Retirement and Income Security Act of 1974 (29
U.S.C. 1002(2)(A);
``(ii) any employee benefit plan described under paragraph
(1) or (3) of section 4(b) of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1003(b)(1), (3)); and
``(iii) any State and any county, municipality, political
subdivision, agency or instrumentality of a State and any
Federal agency or instrumentality thereof;
``(D) the term `CEA-regulated financial instrument' means
any financial instrument regulated by the Commission or under
this Act; and
``(E) the term `Federal functional regulator' means--
``(i) the Board of Governors of the Federal Reserve System;
``(ii) the Office of the Comptroller of the Currency;
``(iii) the Board of Directors of the Federal Deposit
Insurance Corporation;
``(iv) the National Credit Union Administration;
``(v) the Securities and Exchange Commission;
``(vi) the Commodity Futures Trading Commission;
``(vii) the Director of the Federal Housing Finance Agency;
and
``(viii) the Bureau of Consumer Financial Protection.''.

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