Bill Overview
Title: Strengthening the Office of the Investor Advocate Act
Description: This bill revises provisions governing the Office of the Investor Advocate at the Securities and Exchange Commission (SEC). Specifically, the bill expands who may serve as the Investor Advocate, provides that the Investor Advocate may only be removed by the chair of the SEC and may not be removed for advocating policies contrary to the chair or any commissioner, allows the office to publish the results of investor research and testing without review from the SEC, and establishes a budget request process for the office separate from the SEC.
Sponsors: Rep. Lynch, Stephen F. [D-MA-8]
Target Audience
Population: People investing in securities markets worldwide
Estimated Size: 145000000
- The bill affects the Office of the Investor Advocate at the SEC which is responsible for investor protection and oversight.
- It allows the publication of research and testing results without SEC review, potentially impacting investors who rely on independent information.
- The changes in removal conditions for the Investor Advocate may affect the stability and independence of policies protecting investors.
- The budget independence may impact the resources available for investor protection initiatives.
Reasoning
- The policy will likely impact American investors of varying income levels who have equities in the stock market, particularly those who rely on independent information for their investment decisions.
- Due to the policy's limited budget in its first year, the immediate impact may be more informational, spreading awareness through newly published research rather than direct financial shifts.
- Over ten years, the autonomy and stability given to the Office of the Investor Advocate could endeavor financial literacy improvements leading to better-informed investment decisions by the general population.
- Typically, older investors with significant investment portfolios may have more interest in the stability and autonomy of the Investor Advocate as it affects investment safety.
- Younger investors and lower-income individuals might benefit less directly but still gain confidence in the market through more trustworthy information dissemination. Hence, some might not perceive a massive upfront impact.
Simulated Interviews
Financial Analyst (New York, NY)
Age: 35 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- I appreciate increased transparency in the securities markets.
- Unrestricted publication will provide more tools for data analysis.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 9 | 7 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Small Business Owner (Houston, TX)
Age: 54 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 8/20
Statement of Opinion:
- I hope this leads to less political influence on market research.
- Autonomous budgets seem crucial for unbiased investor advice.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 9 | 7 |
| Year 20 | 9 | 7 |
Tech Startup Employee (San Francisco, CA)
Age: 28 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 5.0 years
Commonness: 12/20
Statement of Opinion:
- I'm curious if this would really change market predictions.
- More transparency could reduce my investment risks.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Teacher (Chicago, IL)
Age: 45 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 15.0 years
Commonness: 15/20
Statement of Opinion:
- I rarely understand much of it, but I support anything protecting my retirement funds.
- More clarity and independence might mean more security for me.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 6 | 4 |
| Year 5 | 6 | 4 |
| Year 10 | 7 | 5 |
| Year 20 | 7 | 5 |
Retired (Miami, FL)
Age: 62 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 20.0 years
Commonness: 7/20
Statement of Opinion:
- I strongly support measures that could assure market stability.
- The Advocate's independence from SEC influence sounds promising.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 9 | 6 |
| Year 10 | 10 | 6 |
| Year 20 | 10 | 6 |
Freelancer (Los Angeles, CA)
Age: 23 | Gender: other
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 14/20
Statement of Opinion:
- I’m not sure what change this will make to crypto investments.
- Perhaps this offers more credibility to traditional markets.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Software Engineer (Seattle, WA)
Age: 50 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 9/20
Statement of Opinion:
- I value that my investments might be safer with better advocacy.
- Seeing more research is beneficial for responsible investing.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Real Estate Agent (Denver, CO)
Age: 39 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 15.0 years
Commonness: 13/20
Statement of Opinion:
- The changes sound good for small investors like myself.
- Market independence from political influence seems reassuring.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 6 |
| Year 20 | 9 | 6 |
Factory Worker (Columbus, OH)
Age: 48 | Gender: male
Wellbeing Before Policy: 3
Duration of Impact: 5.0 years
Commonness: 19/20
Statement of Opinion:
- I'm skeptical of anything improving my long-term income from investments.
- If it helps prevent fraud, that's a plus.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 4 | 3 |
| Year 2 | 4 | 3 |
| Year 3 | 4 | 3 |
| Year 5 | 5 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Nurse (Phoenix, AZ)
Age: 60 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 11/20
Statement of Opinion:
- Reassured by increased advocacy independence.
- Hoping for more transparent data feeding into my financial strategies.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Cost Estimates
Year 1: $2500000 (Low: $2000000, High: $3000000)
Year 2: $2500000 (Low: $2000000, High: $3000000)
Year 3: $2500000 (Low: $2000000, High: $3000000)
Year 5: $2500000 (Low: $2000000, High: $3000000)
Year 10: $2500000 (Low: $2000000, High: $3000000)
Year 100: $2500000 (Low: $2000000, High: $3000000)
Key Considerations
- The expansion and independence of the Office can improve investor confidence and protection.
- Additional disclosure freedoms may lead to increased costs but also more effective communication with investors.
- Long-term market stability could enhance investor participation and financial markets integrity.