SEC. 919A. STUDY ON CONFLICTS OF INTEREST.
(a) IN GENERAL.—The Comptroller General of the United States
shall conduct a study—
(1) to identify and examine potential conflicts of interest
that exist between the staffs of the investment banking and
equity and fixed income securities analyst functions within
the same firm; and
(2) to make recommendations to Congress designed to protect
investors in light of such conflicts.
(b) CONSIDERATIONS.—In conducting the study under subsection
(a), the Comptroller General shall—
(1) consider—
(A) the potential for investor harm resulting from conflicts,
including consideration of the forms of misconduct
engaged in by the several securities firms and individuals
that entered into the Global Analyst Research Settlements
in 2003 (also known as the ‘‘Global Settlement’’);
(B) the nature and benefits of the undertakings to
which those firms agreed in enforcement proceedings,
including firewalls between research and investment
banking, separate reporting lines, dedicated legal and
compliance staffs, allocation of budget, physical separation,
compensation, employee performance evaluations, coverage
decisions, limitations on soliciting investment banking business,
disclosures, transparency, and other measures;
(C) whether any such undertakings should be codified
and applied permanently to securities firms, or whether
the Commission should adopt rules applying any such
undertakings to securities firms; and
(D) whether to recommend regulatory or legislative
measures designed to mitigate possible adverse consequences
to investors arising from the conflicts of interest
or to enhance investor protection or confidence in the integrity
of the securities markets; and
(2) consult with State attorneys general, State securities
officials, the Commission, the Financial Industry Regulatory
Authority (‘‘FINRA’’), NYSE Regulation, investor advocates,
brokers, dealers, retail investors, institutional investors, and
academics.
(c) REPORT.—The Comptroller General shall submit a report
on the results of the study required by this section to the Committee
on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives,
not later than 18 months after the date of enactment of this Act.