On December 11, 2009, the House of Representatives passed the Wall Street Reform and Consumer Protection Act of 2009, which is a broad compilation of legislation introduced throughout 2009. Among other provisions, the Act would:

  • establish a Financial Services Oversight Council comprised primarily of the heads of various financial regulatory entities that would monitor and identify potential threats to the stability of the U.S. financial markets, resolve disputes among federal financial regulatory entities and, together with the Federal Reserve or other applicable federal regulator, impose stricter prudential standards on any financial company, activity or practice that poses a threat to the stability of the markets;
  • provide that, unless exempted by the SEC, an issuer of a security registered under Section 12 of the Exchange Act is required to submit its executive compensation to shareholders for non-binding approval during any proxy solicitation related to such securities;
  • require investment advisers of certain unregistered investment companies (i.e., 3(c)(1) and 3(c)(7) funds) to register with and provide information to the SEC;
  • hold broker-dealers who provide investment advice to retail customers to the same standard of care as investment advisers;
  • authorize the SEC to assess a fee on federally-registered investment advisers to fund inspections and examinations;
  • authorize the SEC to prescribe rules and regulations requiring the inclusion of shareholder-proposed board nominees in issuer proxy solicitations;
  • permit the SEC to limit the use of pre-dispute arbitration provisions in broker-dealer agreements; and
  • subject auditors of broker-dealers to regulation by the Public Company Accounting Oversight Board.