12 U.S. Code § 5641. Enhanced compensation structure reporting

prev next
(a) Enhanced disclosure and reporting of compensation arrangements
(1) In generalNot later than 9 months after July 21, 2010, the appropriate Federal regulators jointly shall prescribe regulations or guidelines to require each covered financial institution to disclose to the appropriate Federal regulator the structures of all incentive-based compensation arrangements offered by such covered financial institutions sufficient to determine whether the compensation structure—
could lead to material financial loss to the covered financial institution.
(2) Rules of construction

Nothing in this section shall be construed as requiring the reporting of the actual compensation of particular individuals. Nothing in this section shall be construed to require a covered financial institution that does not have an incentive-based payment arrangement to make the disclosures required under this subsection.

(b) Prohibition on certain compensation arrangementsNot later than 9 months after July 21, 2010, the appropriate Federal regulators shall jointly prescribe regulations or guidelines that prohibit any types of incentive-based payment arrangement, or any feature of any such arrangement, that the regulators determine encourages inappropriate risks by covered financial institutions—
that could lead to material financial loss to the covered financial institution.
(c) StandardsThe appropriate Federal regulators shall—
ensure that any standards for compensation established under subsections (a) or (b) are comparable to the standards established under section 1831p–1[1] of this title for insured depository institutions; and
in establishing such standards under such subsections, take into consideration the compensation standards described in section 1831p–1(c) of this title.
(d) Enforcement

The provisions of this section and the regulations issued under this section shall be enforced under section 505 of the Gramm-Leach-Bliley Act [15 U.S.C. 6805] and, for purposes of such section, a violation of this section or such regulations shall be treated as a violation of subtitle A of title V of such Act [15 U.S.C. 6801 et seq.].

(e) DefinitionsAs used in this section
the term “appropriate Federal regulator” means the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Board of Directors of the Federal Deposit Insurance Corporation, the Director of the Office of Thrift Supervision, the National Credit Union Administration Board, the Securities and Exchange Commission, the Federal Housing Finance Agency; and
(2) the term “covered financial institution” means—
a broker-dealer registered under section 78o of title 15;
an investment advisor, as such term is defined in section 80b–2(a)(11) of title 15;
any other financial institution that the appropriate Federal regulators, jointly, by rule, determine should be treated as a covered financial institution for purposes of this section.
(f) Exemption for certain financial institutions

The requirements of this section shall not apply to covered financial institutions with assets of less than $1,000,000,000.

References in Text

Section 1831p–1 of this title, referred to in subsec. (c)(1), was in the original “section of the Federal Deposit Insurance Act (12 U.S.C. 2 1831p–1)”, and was translated as reading “section 39 of the Federal Deposit Insurance Act”, which is classified to section 1831p–1 of this title, to reflect the probable intent of Congress.

The Gramm-Leach-Bliley Act, referred to in subsec. (d), is Pub. L. 106–102, Nov. 12, 1999, 113 Stat. 1338. Subtitle A (§§ 501–510) of title V of the Act is classified principally to subchapter I (§ 6801 et seq.) of chapter 94 of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see Short Title of 1999 Amendment note set out under section 1811 of this title and Tables.

Effective Date

Section effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as a note under section 5301 of this title.

[1]  See References in Text note below.