Overview
Title
To prohibit the Securities and Exchange Commission from requiring that personally identifiable information be collected under consolidated audit trail reporting requirements, and for other purposes.
ELI5 AI
S. 658 is a rule that stops the government from collecting people's personal details, like names or addresses, when they track money trades. But if someone is suspected of breaking the rules, they can collect the details and must delete them after they're done checking.
Summary AI
S. 658 is a bill that aims to prevent the Securities and Exchange Commission (SEC) from mandating the collection of personally identifiable information (PII) under the consolidated audit trail reporting requirements. It defines PII as data that can identify an individual, such as a name, address, or Social Security number. The bill includes an exception that allows the SEC to collect PII if it is pertinent to an investigation into securities law violations or enforcement actions. Additionally, when such information is collected, the SEC must destroy it within a day after the investigation or related matter concludes.
Published
Keywords AI
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AnalysisAI
The proposed legislative bill, S. 658, titled the "Protecting Investors’ Personally Identifiable Information Act" seeks to address privacy concerns in the trading sector by limiting the collection of personal data by the Securities and Exchange Commission (SEC). Its primary aim is to restrict the SEC from mandating that national securities exchanges or their associates provide personally identifiable information (PII) during regular consolidated audit trail (CAT) reporting unless specifically requested for investigations related to federal securities laws.
General Summary
The bill clearly defines "personally identifiable information" as data that can be uniquely linked to an individual, including details such as names, Social Security numbers, and email addresses. Unless a specific request is made for investigative purposes, the SEC is prohibited from requiring this data. It also mandates the destruction of such information once an investigation concludes.
Significant Issues
Several key issues are raised by the provisions of this bill:
Definition Ambiguity: The classification of "linkable" information could lead to a variety of interpretations, potentially causing confusion about what data is protected under this bill.
Reporting Event Clarity: The lack of clear definitions for what constitutes a "reportable event" might complicate compliance efforts for securities exchanges and create enforcement challenges for the SEC.
Regulatory Overreach: The criteria for the SEC to request PII for investigations are not clearly outlined, which could lead to concerns about potential governmental overreach into privacy matters.
Compliance Timeline: The mandated 24-hour timeframe to provide PII at the Commission’s request may not be feasible for exchanges that need sufficient time to gather and process the required information, posing potential operational challenges.
Information Destruction Protocol: The requirement to destroy PII post-investigation could be problematic due to the vague terminology regarding when an investigation is conclusively ended. This might result in inconsistent data handling practices.
Impact on the Public
At a broad level, the bill may be viewed positively by individuals concerned about privacy, as it aims to safeguard personal information from mandatory collection in the securities sector unless absolutely necessary. This enhanced data protection could increase public trust in financial markets.
Impact on Stakeholders
Securities Exchanges and Associations: These entities might benefit from reduced compliance burdens in scenarios where they are no longer required to gather extensive personal data routinely. However, the tight timeframe for data provision upon SEC request could introduce operational difficulties.
The SEC: Although the SEC retains the authority to request PII for valid investigations, the lack of specificity regarding request criteria may limit its ability to effectively pursue enforcement actions.
Individual Investors: Investors could experience improved privacy protections, reducing their exposure to identity theft risks from data breaches involving PII collected solely for reporting.
In conclusion, while the bill may address significant privacy concerns, the lack of clarity in some provisions could pose obstacles to effective implementation and enforcement. Further refinement in defining key terms and processes may be required to balance privacy protection with pragmatic regulatory operation.
Issues
Section 2: The definition of 'personally identifiable information' could lead to ambiguity over what constitutes 'linkable' information, creating potential legal challenges and varying interpretations.
Section 2(b): While the prohibition on requiring personally identifiable information is clear, the lack of specificity in defining 'reportable event' under section 242.613(c)(7) of title 17, Code of Federal Regulations, might lead to differing interpretations, impacting compliance and enforcement.
Section 2(c): The exception allowing the Commission to request personally identifiable information lacks clear criteria, which could be perceived as enabling governmental overreach in accessing private information.
Section 2(d): The 24-hour timeframe for providing requested personally identifiable information to the Commission may pose a significant compliance challenge for exchanges or associations, possibly resulting in operational or legal conflicts due to the insufficient time to process requests.
Section 2(e): The requirement to destroy personally identifiable information after 'the conclusion of the investigation' is vague, potentially leading to discrepancies in the implementation and risks of misuse or unintended data retention.
Sections
Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.
1. Short title Read Opens in new tab
Summary AI
This section of the bill states that the Act may be referred to as the “Protecting Investors’ Personally Identifiable Information Act”.
2. Personally identifiable information excluded from consolidated audit trail reporting requirements Read Opens in new tab
Summary AI
The section prohibits the Securities and Exchange Commission (SEC) from requiring personally identifiable information (like name, address, and Social Security number) from stock exchanges or their members unless it's part of an investigation related to securities law violations. Such information must be destroyed by the SEC after the investigation concludes.