Investor Advisory Committee (§ 911)

In the realm of investor protection, the legislation establishes a new permanent Investor Advisory Committee (IAC) to consult with and advise the SEC on matters such as making recommendations to Congress for legislative changes on the regulation of securities products, trading strategies and fee structures, the effectiveness of disclosures, and other investor protection initiatives. The IAC will be comprised of the head of a newly created Office of the Investor Advocate (see box to right), a representative of senior citizens, a representative of state securities commissions, and 10 to 20 representatives of individual and institutional investors appointed by the SEC. The IAC will not have any designated public company representation, and its Chairman and Vice Chairman may not be employed by any public company. The legislation requires the SEC to disclose promptly its assessment of any IAC findings or recommendations and the actions it intends to take to address them.

What are the responsibilities of the Office of the Investor Advocate?

An Office of the Investor Advocate (OIA) will be created within the SEC but with independent reporting obligations to Congress. The head of the OIA will be appointed by the SEC Chairman. The OIA will be charged with:

  • assisting retail investors to resolve significant problems with the SEC or with SROs
  • identifying areas in which investors would benefit from changes to SEC regulations or SRO rules
  • identifying problems that investors have with financial service providers and investment products
  • analyzing the potential impact on investors of proposed SEC and SRO rules
  • proposing appropriate related changes to rules and regulations to promote investor interests