15 U.S.C. § 78d — Securities and Exchange Commission

(a) Establishment; composition; limitations on commissioners; terms of office This section creates the Securities and Exchange Commission — called the "Commission" — with five commissioners. The President appoints them, and the Senate must approve. No more than three commissioners can belong to the same political party, and appointments should alternate between parties as much as practical. A commissioner can't hold any other job, and can't take part, directly or indirectly, in stock-market trades of the kind the Commission regulates. Each commissioner serves a five-year term and stays in office until a successor is appointed and qualified — but never longer than the end of the next session of Congress after the term expires. Someone appointed to fill a vacancy that opened up early only serves out the rest of that term. And the first commissioners' terms, starting June 6, 1934, were staggered — one ending after one year, one after two years, one after three, one after four, and one after five — as the President assigned them. (b) Appointment and compensation of staff and leasing authority The Commission hires and pays its officers, lawyers, economists, examiners, and other staff under section 4802 of title 5. When it sets or changes their pay and benefits, it has to tell Congress and the banking-regulator agencies listed in section 1833b of title 12, and try to keep its pay comparable to theirs. The Commission can also lease real estate directly — for offices, meetings, storage, or anything else it needs — without following the General Services Administration's usual space-management rules. (c) Acceptance of travel support for Commission activities from non-Federal sources; regulations The Commission can accept payment or reimbursement, in cash or in kind, from non-federal agencies, groups, or people, to cover travel, subsistence, and other necessary costs when its members or staff attend meetings related to the Commission's work — as long as it follows its own conflict-of-interest rules. Any money it takes this way goes into its regular appropriated funds. This can go over the normal government per diem limits, though the Commission's regulations may cap the amount. (d) Acceptance of relocation expenses from former employers by professional fellows program participants People who join the Commission's professional fellows program can accept payment from their former employer to cover the actual cost of moving to Washington, D.C. to take part in the program. (e) Fee payments The Commission can let required fees be paid in ways other than cash, and can set by rule exactly when a fee has to be calculated and paid relative to when a statement or document is filed. (f) Reimbursement of expenses for assisting foreign securities authorities The Commission can accept payment or reimbursement, in cash or in kind, from — or made on behalf of — a foreign securities regulator, to cover costs the Commission and its members and staff incur investigating something under section 78u(a)(2) or otherwise helping that foreign regulator. That money is treated as a reimbursement to the Commission's appropriated funds. (g) Office of the Investor Advocate The Commission has an Office of the Investor Advocate. Its head, the Investor Advocate, reports directly to the Chairman, who appoints the Investor Advocate — after consulting the rest of the Commission — from people experienced in advocating for investors' interests and investor protection. The Investor Advocate is paid as much as the Commission's other top senior executives who report to the Chairman, and can't have worked at the Commission during the two years before the appointment, or take a Commission job during the five years after leaving the role. After consulting the Chairman, the Investor Advocate can hire independent counsel, research staff, and service staff as needed. The Investor Advocate's job is to help retail investors solve significant problems with the Commission or with self-regulatory organizations like exchanges; to spot places where investors would benefit from changes to Commission regulations or self-regulatory organization rules; to identify problems investors have with financial service providers and investment products; to study how proposed Commission regulations and self-regulatory organization rules would affect investors; and, where practical, to propose changes — to the Commission's own regulations or orders, or through legislation, administrative action, or personnel changes — that would fix problems investors face and promote their interests. The Commission has to give the Investor Advocate full access to its own documents and those of any self-regulatory organization, as needed to do the job. Each year the Investor Advocate files two reports with the Senate Banking, Housing, and Urban Affairs Committee and the House Financial Services Committee. By June 30, a report lays out the Investor Advocate's objectives for the coming fiscal year, with full and substantive analysis and explanation. By December 31, a report on the past fiscal year's activities must include appropriate statistics and full analysis; steps taken to improve investor services and the responsiveness of the Commission and self-regulatory organizations to investor concerns; a summary of the most serious problems investors faced; an inventory of those problems showing what action, if any, the Commission or organization took and its result, how long each item has been on the list, and — for items with no action taken — the reasons why and who is responsible; recommendations for administrative or legislative fixes; and any other information the Investor Advocate finds appropriate. Both reports go straight to the named committees, with no prior review or comment from the Commission, any commissioner, any other Commission employee, or the Office of Management and Budget. Neither report can contain confidential information. The Commission must, by regulation, set up procedures requiring a formal response to every recommendation the Investor Advocate submits, within three months of submission. The Investor Advocate must also appoint an Ombudsman, within 180 days of the first Investor Advocate taking office, who reports directly to the Investor Advocate. The Ombudsman acts as a liaison between the Commission and retail investors trying to resolve problems with the Commission or self-regulatory organizations, reviews and recommends policies encouraging people to bring compliance questions to the Investor Advocate, and sets up safeguards to keep those communications confidential. The Ombudsman must use Commission personnel wherever practical, and this office doesn't replace or reduce any similar ombudsman office at another agency. The Ombudsman submits a semiannual report to the Investor Advocate describing its activities and evaluating its own effectiveness, and the Investor Advocate folds that into the annual reports described above. (h) Examiners The Commission's Division of Trading and Markets, or any successor unit, has its own staff of examiners who inspect the firms under that division's jurisdiction and report to the division's director. The Division of Investment Management, or any successor unit, has the same setup — its own examiners inspecting the firms it oversees and reporting to its own director. (i) Office of the Advocate for Small Business Capital Formation The Commission also has an Office of the Advocate for Small Business Capital Formation. Its head, the Advocate, reports directly to the Commission and is appointed by the Commission from people experienced in advocating for small businesses and encouraging small business capital formation. The Advocate is paid as much as the Commission's other top senior executives who report directly to it, and a current Commission employee cannot be appointed to the role. Like the Investor Advocate, after consulting the Commission the Advocate can hire independent counsel, research staff, and service staff as needed. The Advocate's job is to help small businesses and small business investors resolve significant problems with the Commission or self-regulatory organizations; spot where changes to Commission regulations or self-regulatory organization rules would help them; identify problems small businesses face getting access to capital, including unique challenges facing minority-owned businesses, women-owned businesses, and businesses hit by hurricanes or other natural disasters; study the likely impact on small businesses and their investors of proposed Commission regulations and self-regulatory organization rules that would have a significant economic effect on small business capital formation; conduct outreach, including regional roundtables, to hear views on capital formation issues; propose changes to the Commission and Congress to fix identified problems and promote small businesses' and their investors' interests; consult with the Investor Advocate on those proposed recommendations; and advise the Investor Advocate on small-business issues. The Commission must give the Advocate full access to Commission and self-regulatory organization documents and information, as needed to do the job. Each year, by December 31, the Advocate must send the same two congressional committees a report on the past fiscal year's activities, including appropriate statistics and analysis; steps taken to improve small business services and the responsiveness of the Commission and self-regulatory organizations; a summary of the most serious issues small businesses and their investors faced, including unique issues facing minority-owned, women-owned, and disaster-affected businesses; an inventory of those issues — including ones carried over from earlier reports that remain unresolved — showing what action was taken and its result, how long each item has been outstanding, and the reasons for inaction where nothing was done, along with who is responsible; recommendations for regulatory, guidance, or legislative changes; and any other information the Advocate finds appropriate. The report can't contain confidential information, and it must go directly to the committees without prior review or comment from the Commission, any commissioner, any other Commission employee, or the Office of Management and Budget. The Commission must set up procedures requiring a formal response to all of the Advocate's recommendations within three months of submission. The Advocate is also responsible for planning, organizing, and running the annual Government-Business Forum on Small Business Capital Formation required under section 80c–1. And nothing in this subsection reduces the responsibilities the Investor Advocate still has toward small business investors. (j) Open data publication Every public data asset the Commission publishes under the securities laws and the Dodd-Frank Wall Street Reform and Consumer Protection Act must be made available as an open government data asset as defined in section 3502 of title 44, freely available for download, presented in a human-readable format, and, where appropriate, accessible through an application programming interface.