Casten SEC Disclosure Effectiveness Testing Act Passes House

October 17, 2019
Press Release
Congressman’s bill allows retail investors to better understand their disclosures

Washington, D.C. – Today, U.S. Representative Sean Casten’s (IL-06) bill, H.R. 1815 the SEC Disclosure Effectiveness Testing Act passed the House. The bill would require the Securities and Exchange Commission (SEC) to ensure main street investors have the information they need to invest their savings. The bill would require the SEC to engage in usability testing of its new and existing disclosures intended for retail investors in the form of qualitative interviews and surveys. Today, Casten spoke on the House Floor on H.R. 1815. This is Casten’s first bill to pass the House. 


To watch Rep. Casten’s full speech click the image above or click here.  

Casten, said in part, “Whether it is buying a house, sending your kids to college, investing in your retirement, or just saving for a rainy day, the American dream depends on our ability to invest in our future. This bill protects Americans by doing basic market research to ensure that legally required disclosures can be understood by the average investor.”

Financial Planning Coalition Board said, “The Coalition believes that H.R. 1815 will provide the statutory framework necessary for the SEC to ensure to Congress and Main Street investors that disclosures required under SEC rules have been thoroughly and adequately tested by the SEC and are reasonably effective in achieving their intended purpose.”

SEC Disclosure Effectiveness Testing Act would require the SEC to conduct usability testing when developing disclosures that are used and relied upon by retail investors. Specifically, the bill would:

  • Require the SEC to conduct testing of new and existing disclosures that are used by retail investors and are intended to help them make investment decisions or understand their investments.
  • Include interview and survey testing of retail investors on the usefulness of the documents and information. The analysis of results would be published in the Federal Register for comment. 

The bill is supported by AARP, the Financial Planning Coalition, brokers and investment advisers at the Certified Financial Planning Board of Standards (CFP Board), and the Consumer Federation of America.