Page:United States Statutes at Large Volume 124.djvu/1855

 124 STAT. 1829 PUBLIC LAW 111–203—JULY 21, 2010 rules, any material conflicts of interest shall be disclosed and may be consented to by the customer. Such rules shall provide that such standard of conduct shall be no less stringent than the standard applicable to investment advisers under section 206(1) and (2) of this Act when providing personalized invest- ment advice about securities, except the Commission shall not ascribe a meaning to the term ‘customer’ that would include an investor in a private fund managed by an investment adviser, where such private fund has entered into an advisory contract with such adviser. The receipt of compensation based on commission or fees shall not, in and of itself, be considered a violation of such standard applied to a broker, dealer, or investment adviser. ‘‘(2) RETAIL CUSTOMER DEFINED.—For purposes of this sub- section, the term ‘retail customer’ means a natural person, or the legal representative of such natural person, who— ‘‘(A) receives personalized investment advice about securities from a broker, dealer, or investment adviser; and ‘‘(B) uses such advice primarily for personal, family, or household purposes. ‘‘(h) OTHER MATTERS.—The Commission shall— ‘‘(1) facilitate the provision of simple and clear disclosures to investors regarding the terms of their relationships with brokers, dealers, and investment advisers, including any mate- rial conflicts of interest; and ‘‘(2) examine and, where appropriate, promulgate rules prohibiting or restricting certain sales practices, conflicts of interest, and compensation schemes for brokers, dealers, and investment advisers that the Commission deems contrary to the public interest and the protection of investors.’’. (h) HARMONIZATION OF ENFORCEMENT.— (1) SECURITIES EXCHANGE ACT OF 1934.—Section 15 of the Securities Exchange Act of 1934, as amended by subsection (g)(1), is further amended by adding at the end the following new subsection: ‘‘(m) HARMONIZATION OF ENFORCEMENT.—The enforcement authority of the Commission with respect to violations of the standard of conduct applicable to a broker or dealer providing personalized investment advice about securities to a retail customer shall include— ‘‘(1) the enforcement authority of the Commission with respect to such violations provided under this Act; and ‘‘(2) the enforcement authority of the Commission with respect to violations of the standard of conduct applicable to an investment adviser under the Investment Advisers Act of 1940, including the authority to impose sanctions for such violations, and the Commission shall seek to prosecute and sanction violators of the standard of conduct applicable to a broker or dealer providing personalized investment advice about securities to a retail customer under this Act to same extent as the Commission prosecutes and sanctions violators of the standard of conduct applicable to an investment advisor under the Investment Advisers Act of 1940.’’. (2) INVESTMENT ADVISERS ACT OF 1940.—Section 211 of the Investment Advisers Act of 1940, as amended by subsection 15 USC 78o.