To amend the Federal Reserve Act to require the Board of Governors of the Federal Reserve System to establish goals for the use of diverse investment advisers, brokers, and dealers in investment management agreements related to the Board of Governor's unusual and exigent circumstances authority, and for other purposes.

I 116TH CONGRESS 2D SESSION H. R. 6891 To amend the Federal Reserve Act to require the Board of Governors of the Federal Reserve System to establish goals for the use of diverse investment advisers, brokers, and dealers in investment management agreements related to the Board of Governor’s unusual and exigent circumstances authority, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MAY 15, 2020 Mrs. BEATTY introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend the Federal Reserve Act to require the Board of Governors of the Federal Reserve System to establish goals for the use of diverse investment advisers, brokers, and dealers in investment management agreements re- lated to the Board of Governor’s unusual and exigent circumstances authority, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. REQUIREMENTS FOR INVESTMENT MANAGE- 3 MENT AGREEMENTS. 4 Section 13(3) of the Federal Reserve Act (12 U.S.C. 5 347d(3)) is amended by adding at the end the following: 6 VerDate Sep 11 2014 16:27 Jun 05, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6891.IH H6891 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 6891 IH ‘‘(F) REQUIREMENTS FOR INVESTMENT 1 MANAGEMENT AGREEMENTS.— 2 ‘‘(i) IN GENERAL.—With respect to 3 any investment management agreement en- 4 tered into by the Board of Governors of 5 the Federal Reserve System with respect 6 to any program or facility established 7 under this paragraph, the Board of Gov- 8 ernors shall set goals in such agreement 9 that require investment managers, to the 10 maximum extent possible, to utilize— 11 ‘‘(I) investment advisers and sub- 12 advisers that are diverse individual- 13 owned and controlled firms as inter- 14 mediaries; and 15 ‘‘(II) brokers and dealers that 16 are diverse individual-owned and con- 17 trolled firms. 18 ‘‘(ii) REPORT.—The Board of Gov- 19 ernors shall include, in the report required 20 under subparagraph (C), a description of 21 goals set pursuant to clause (i). 22 ‘‘(iii) DEFINITIONS.—For the pur- 23 poses of this subparagraph: 24 VerDate Sep 11 2014 16:27 Jun 05, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6891.IH H6891 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 6891 IH ‘‘(I) AFFILIATED PERSON.—The 1 term ‘affiliated person’ has the mean- 2 ing given that term under section 2(a) 3 of the Investment Company Act of 4 1940. 5 ‘‘(II) BROKER.—The term 6 ‘broker’ has the meaning given that 7 term under section 3 of the Securities 8 Exchange Act of 1934. 9 ‘‘(III) DEALER.—The term ‘deal- 10 er’ has the meaning given that term 11 under section 3 of the Securities Ex- 12 change Act of 1934. 13 ‘‘(IV) DIVERSE INDIVIDUAL- 14 OWNED AND CONTROLLED FIRM.— 15 The term ‘diverse individual-owned 16 and controlled firm’ means a firm— 17 ‘‘(aa) which is at least 51 18 percent owned by one or more in- 19 dividuals who are women, minori- 20 ties, or veterans; or 21 ‘‘(bb) whose management 22 and daily business operations 23 are— 24 VerDate Sep 11 2014 16:27 Jun 05, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6891.IH H6891 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 6891 IH ‘‘(AA) in the case of a 1 firm the shares of which are 2 traded on a national securi- 3 ties exchange, controlled by 4 a board with a majority of 5 members who are women, 6 minorities, or veterans; and 7 ‘‘(BB) in the case of 8 any other firm, at least 51 9 percent controlled by one or 10 more individuals who are 11 women, minorities, or vet- 12 erans. 13 ‘‘(V) INVESTMENT ADVISER.— 14 The term ‘investment adviser’ has the 15 meaning given the term in section 16 202(a)(11) of the Investment Advisers 17 Act of 1940. 18 ‘‘(VI) MINORITY.—The term ‘mi- 19 nority’ has the meaning given the 20 term in section 308(b) of the Finan- 21 cial Institutions Reform, Recovery, 22 and Enforcement Act of 1989 and 23 also includes any indigenous person in 24 the United States or its territories. 25 VerDate Sep 11 2014 16:27 Jun 05, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6891.IH H6891 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 6891 IH ‘‘(VII) VETERAN.—The term 1 ‘veteran’ has the meaning given the 2 term in section 101 of title 38, United 3 States Code.’’. 4 Æ VerDate Sep 11 2014 16:27 Jun 05, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\H6891.IH H6891 pamtmann on DSKBC07HB2PROD with BILLS