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United States · Bill · HR

H.R. 5424 (114th)

Investment Advisers Modernization Act of 2016

referredUnited States· United States Congress· EN

Introduced

9 June 2016

Last action

12 September 2016 · Introduced

Status

Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Sponsors

Rep. Hurt, Robert [R-VA-5], Rep. Vargas, Juan [D-CA-52], Rep. Foster, Bill [D-IL-11], Rep. Stivers, Steve [R-OH-15], Sen. Sinema, Kyrsten [I-AZ], Rep. Hultgren, Randy [R-IL-14]

Subjects

Discovery layer

Source updated

7 April 2025

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Summary

Investment Advisers Modernization Act of 2016 This bill directs the Securities and Exchange Commission (SEC) to amend specified regulations for investment advisers as they apply to private equity firms and private investment funds. A specified regulation regarding books and records that investment advisers must maintain shall be amended to declare that an investment adviser is not required to maintain: any communications or materials (including any made available in a secure electronic or physical data room) used in connection with due diligence for a prospective investment, if the communications or materials are subject to a confidentiality agreement; or any written communications regarding recommendations, advise, purchase or sell orders, or the receipt, disbursement or delivery of funds or securities if they are sent and received only by supervised persons of the investment adviser. The bill revises the disclaimer that, in the case of an investment adviser that is a partnership, an assignment shall not be deemed to result from the death, withdrawal, sale or transfer of minority interests to apply the disclaimer also to minority members, shareholders, for other equity owners of the investment adviser. The Investment Advisers Act of 1940 is amended to repeal the requirement that advisers organized as partnerships notify the other party to an investment adviser contract every time there is a change in the composition of the partnership. The SEC shall waive the application of specified antifraud prohibitions to advisers who advertise exclusively to accredited investors, qualified clients, qualified purchasers, or knowledgeable employees. Another regulation shall declare that an investment adviser is not required to deliver a brochure or brochure supplement to a client that is a limited partnership, limited liability company, or other pooled investment vehicle for which each limited partner, member, or other equity owner has received, before purchasing a security issued by the pooled investment vehicle, a prospectus, private placement memorandum, or other offering document containing (to the extent material to the private fund offering) substantially the same information as would be required by Part 2A or 2B of Form ADV. The SEC must amend a certain regulation regarding Form PF which registered investment advisers with at least $150 million in private funds assets under management must file with the SEC to report information about the private funds that they manage. This amendment shall state that an investment adviser to a private fund is not required to report any information beyond that which is required by sections 1a and 1b of Form PF unless it is a large hedge fund adviser or a large liquidity fund adviser. The SEC shall also amend the regulation requiring that client funds and securities of which an investment adviser has custody are verified by actual examination periodically by an independent public accountant. The current "privately offered securities" exemptions from this custody rule must apply to both certificated and uncertificated securities and exempt special purpose vehicles managed by private fund sponsors and co-investment funds that hold only one investment. The SEC shall amend the proxy voting regulation to waive its application to any voting authority exercised by an investment adviser regarding client securities that are not public securities. On the other hand, the SEC may not: amend a specified regulation to extend its requirements and prohibitions concerning investment company sales literature to offerings of securities issued by private funds, or adopt substantially similar rules applicable to such offerings. This bill shall not apply to advisory services supplied to an investment company registered under the Investment Company Act of 1940.

This text is taken from the official record. PoliticalRepo does not editorialize.

Timeline

  1. 17 May 2016

    Committee

    Hearings Held by the Subcommittee on Capital Markets and Government Sponsored Enterprises Prior to Introduction and Referral.

    Source: Committee

  2. 9 June 2016

    Introduced

    Referred to the House Committee on Financial Services.

    Source: IntroReferral

  3. 9 June 2016

    Introduced

    Introduced in House

    Source: IntroReferral

  4. 9 June 2016

    Introduced

    Introduced in House

    Source: IntroReferral

  5. 15 June 2016

    Committee

    Committee Consideration and Mark-up Session Held.

    Source: Committee

  6. 16 June 2016

    Vote

    Ordered to be Reported (Amended) by the Yeas and Nays: 47 - 12.

    Source: Committee

  7. 16 June 2016

    Committee

    Committee Consideration and Mark-up Session Held.

    Source: Committee

  8. 21 July 2016

    Calendars

    Placed on the Union Calendar, Calendar No. 540.

    Source: Calendars

  9. 21 July 2016

    Reported

    Reported (Amended) by the Committee on Financial Services. H. Rept. 114-698.

    Source: Committee

  10. 21 July 2016

    Reported

    Reported (Amended) by the Committee on Financial Services. H. Rept. 114-698.

    Source: Committee

  11. 6 September 2016

    Reported

    Rules Committee Resolution H. Res. 844 Reported to House. Rule provides for consideration of H.R. 2357 and H.R. 5424.

    Source: Floor

  12. 8 September 2016

    Passed

    Rule H. Res. 844 passed House.

    Source: Floor

  13. 9 September 2016

    Passed

    Motion to reconsider laid on the table Agreed to without objection.

    Source: Floor

  14. 9 September 2016

    Vote

    On passage Passed by the Yeas and Nays: 261 - 145 (Roll no. 495).

    Source: Floor

  15. 9 September 2016

    Vote

    Passed/agreed to in House: On passage Passed by the Yeas and Nays: 261 - 145 (Roll no. 495).

    Source: Floor

  16. 9 September 2016

    Vote

    On motion to recommit with instructions Failed by the Yeas and Nays: 176 - 232 (Roll no. 494).

    Source: Floor

  17. 9 September 2016

    Floor

    The previous question on the motion to recommit with instructions was ordered without objection. (consideration: CR H5244)

    Source: Floor

  18. 9 September 2016

    Floor

    Mrs. Torres moved to recommit with instructions to the Committee on Financial Services. (consideration: CR H5238-5239, H5244-5245; text: CR H5238-5239)

    Source: Floor

  19. 9 September 2016

    Floor

    ORDER OF PROCEDURE - Mr. Hurt asked unanimous consent that the question of adopting a motion to recommit on H.R. 5424 may be subject to postponement as though under clause 8 of rule 20.

    Source: Floor

  20. 9 September 2016

    Reported

    Considered under the provisions of rule H. Res. 844. (consideration: CR H5230-5239; text of measure as reported in House: CR H5230-5231)

    Source: Floor

  21. 12 September 2016

    Introduced

    Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

    Source: IntroReferral

Votes

No vote records are attached yet.

Versions

Documents

11 official files

Referred in Senate (text)

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  • Referred in Senate (text)

    Referred in Senate · EN · 12 September 2016

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  • Referred in Senate (PDF)

    Referred in Senate · EN · 12 September 2016

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  • Engrossed in House (text)

    Engrossed in House · EN · 9 September 2016

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  • Engrossed in House (PDF)

    Engrossed in House · EN · 9 September 2016

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  • Passed House amended

    summary · EN · 9 September 2016

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  • Reported in House (text)

    Reported in House · EN · 21 July 2016

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  • Reported in House (PDF)

    Reported in House · EN · 21 July 2016

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  • Reported to House with amendment(s)

    summary · EN · 21 July 2016

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  • Introduced in House (text)

    Introduced in House · EN · 9 June 2016

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  • Introduced in House (PDF)

    Introduced in House · EN · 9 June 2016

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  • Introduced in House

    summary · EN · 9 June 2016

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Sources

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