The Honorable Maxine Waters
Chairwoman
Committee on Financial Services
U.S. House of Representatives
Washington, DC 20515

The Honorable Patrick McHenry
Ranking Member
Committee on Financial Services
U.S. House of Representatives
Washington, DC 20515

Dear Chairwoman Waters and Ranking Member McHenry,

The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates the opportunity to comment on H.R. 1815, the “SEC Disclosure Effectiveness Testing Act.” H.R. 1815 would impose on the Securities and Exchange Commission (“SEC”) an investor testing requirement for all past and future broker-dealer regulations about disclosure to retail investors.

SIFMA appreciates and shares the interest of Representative Casten and the Committee in advocating for robust investor testing of retail investor disclosures. We agree that in many cases, investor testing is appropriate and makes good common sense. In fact, the SEC conducted extensive investor testing of the proposed Form CRS,2 which is an important disclosure of Reg BI. The SEC’s testing involved both a comprehensive national survey to collect information on the opinions, preferences, attitudes, and level of self-assessed comprehension of the Form CRS, as well as qualitative interviews to obtain further insights related to the reasoning and beliefs behind individuals’ attitudes toward the Form CRS. With respect to Reg BI, the investor testing has already been done, and while it may be appropriate to conduct further testing, we believe such testing should not hold up the implementation of the new best interest standard and the heightened duties and obligations that it would afford investors.

Based on this concern, SIFMA respectfully opposes H.R. 1815 because we believe it could unnecessarily delay the implementation of important rules designed and intended to better protect those very same investors, including the SEC’s pending Regulation Best Interest (“Reg BI”).3 SIFMA has long supported enhancing the standard of conduct applicable to brokerdealers when providing personalized investment advice about securities to retail investors and we believe the SEC should proceed with finalizing its rule without delay.

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