Digital Equities and No Automatic Disqualifications Act
Sponsored By: Senator Justice, James C. [R-WV]
Introduced
Summary
Prevents automatic regulatory disqualifications for entities that are not natural persons unless the SEC or CFTC affirmatively decide to apply them. The bill would require the Securities and Exchange Commission and the Commodity Futures Trading Commission to complete a joint rulemaking not later than 1 year after enactment to set a uniform process for applying disqualifying provisions.
Show full summary
- Firms and funds that are not natural persons would not face automatic bans. They would have to give written notice to the relevant regulator within 30 calendar days after a triggering event.
- The SEC and CFTC would have to issue consistent rules within 1 year that include confidential procedures when needed, require consideration of mitigating factors, and limit application so a disqualification only applies to the same legal entity and to the business line actually affected.
- Agencies could apply a disqualifying provision only if doing so is necessary and appropriate in the public interest and for the protection of investors, creating a formal test for when disqualifications are used.
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Bill Overview
Analyzed Economic Effects
1 provisions identified: 1 benefits, 0 costs, 0 mixed.
Protect companies from automatic disqualification
If enacted, the bill would stop automatic disqualifications from applying to non-natural persons (companies, funds, and partnerships) unless a regulator first decides to apply the rule to the specific matter. The Securities and Exchange Commission and the Commodity Futures Trading Commission would complete joint rules within 1 year. The rules would require written notice to the regulator within 30 calendar days of the triggering event, allow nonpublic procedures for confidential cases, require consideration of mitigating factors, and limit application to the same legal entity and the business line affected. The rulemaking would cover the Commodity Exchange Act; the Securities Act of 1933; the Securities Exchange Act of 1934; the Investment Company Act of 1940; the Investment Advisers Act of 1940; rules under those laws; and self-regulatory organization rules. Natural persons would not get this protection.
Sponsors & CoSponsors
Sponsor
Justice, James C. [R-WV]
WV • R
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
No roll call votes available for this bill.
View on Congress.gov