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H.R. 5424: Investment Advisers Modernization Act of 2016

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H.R. 5424: Investment Advisers Modernization Act of 2016

114th Congress · introduced 2016-06-09 · Finance and Financial Sector · Latest: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

federal

Follow this bill, step by step

  1. Where it came from: introduced 2016-06-09 · official record
  2. Who proposed it: Rep. Hurt, Robert [R-VA-5] · what a sponsor is
  3. What happened next: 2 recorded votes in our records. Latest: House roll call 494 (2016): On Motion to Recommit with Instructions, HR5424 (2016-09-09), Failed. See all
  4. Where it stands now: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. Not final yet: this can still change. We check for updates every day.
  5. If it becomes law and spends money: follow the money to money laws, then agencies and contracts and grants.

What does this mean?

Official title

Investment Advisers Modernization Act of 2016

Plain 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. (Sec. 2) 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. Qualified clients of an investment adviser may consent to an assignment of the investment adviser contract at the time they enter into an advisory contract. 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: qualified clients, determined as of the time of the publication, circulation, or distribution of the advertisement rather than immediately before or after entering into the investment advisory contract; knowledgeable employees of any private fund to which the investment adviser acts as an investment adviser; qualified purchasers; or accredited investors (determined as if the investment adviser were the securities issuer and the time of the publication, circulation, or distribution of the advertisement were the sale of such securities). (Sec. 3) 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 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. (Sec. 4) 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. (Sec. 5) This bill shall not apply to advisory services supplied to an investment company registered under the Investment Company Act of 1940. (Sec. 6) Any regulation referred to in this bill includes any successor regulation.

Congressional Research Service summary (Passed House amended), quoted unchanged (nonpartisan). Read the source.

What a vote does

A “Yea” vote

If it passes both chambers and is signed, it becomes law.

A “Nay” vote

If it is not passed, current law stays as it is.

PSI Sci description of the legislative step (not an opinion).

What does this mean? (plain words)

Official text

Investment Advisers Modernization Act of 2016

Source: Congressional Research Service summary (Passed House amended)

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How did my representative vote? · This bill's floor votes

Officials and money

Sponsor: Rep. Hurt, Robert [R-VA-5] · 5 cosponsors

Cost estimate: CBO cost estimate: H.R. 5424, Investment Advisers Modernization Act of 2016 (2016-07-12)

Cosponsors on this site

Juan Vargas (D-CA), Bill Foster (D-IL)

Recorded votes

Words on this page, explained (3)
Bill
A proposed law. It becomes law only if it passes the legislature and is signed by the president or governor (or a veto is overridden).
Rulemaking
The process agencies use to write regulations that carry out laws passed by Congress or a legislature. Usually an agency publishes a proposed rule, takes public comments, then publishes a final rule.
Securities
Financial investments that can be bought and sold, such as stocks and bonds.

Plain meanings written from linked sources. All words.

Sources

Record fed-us-cong114-hr5424 · catalog fed-us-congress-bills-cong114 · updated 2026-11-15 by psicol fed-bills-cong114