Protecting Investors’ Personally Identifiable Information Act
- Bill Number
- S. 658
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2025-02-20: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- Last Updated
- 2025-03-13T17:35:30Z
AI-Generated Summary
Purpose
The legislation, titled the "Protecting Investors' Personally Identifiable Information Act," aims to safeguard the privacy of investors by restricting the routine collection of personally identifiable information (PII)—such as names, addresses, Social Security numbers, or email addresses—in securities market reporting. It limits the Securities and Exchange Commission (SEC) from mandating PII in consolidated audit trail (CAT) systems, which track trading activity, except in targeted investigative scenarios.
Key Provisions
- Definitions:
- "Commission" refers to the SEC.
- "Personally identifiable information" (PII) includes any data that can identify an individual, alone or combined with other details (e.g., name, birth date, phone number, IP address).
- General Prohibition: The SEC cannot require national securities exchanges (e.g., stock markets like NYSE), national securities associations (e.g., FINRA), or their members (e.g., broker-dealers) to submit PII for CAT reporting under existing regulations (17 CFR 242.613(c)(7) or successors). This applies to orders or reportable events in securities trading.
- Exception for Investigations: The SEC may request PII only if it relates to probing or enforcing violations of federal securities laws (e.g., fraud or insider trading cases).
- Response Timeline: Upon request, exchanges, associations, or members must provide the PII within 24 hours, unless the SEC grants a reasonable extension at their request.
- Data Destruction Requirement: The SEC must destroy any collected PII within one day after the investigation or enforcement action concludes.
Significant Changes to Existing Law
- This bill modifies CAT rules, established under the Dodd-Frank Act and SEC regulations, which previously allowed broader collection of customer and trader data for market surveillance. It explicitly bars routine PII submission, shifting from proactive data gathering to reactive, case-specific requests, thereby narrowing the scope of mandatory reporting.
Potential Impacts
- On Government Agencies: The SEC's oversight of markets may become more targeted, potentially slowing routine surveillance but reducing storage and privacy risks for sensitive data.
- On Citizens: Investors and market participants gain stronger privacy protections, minimizing the risk of data breaches or misuse in everyday trading reports; however, it could slightly hinder rapid detection of market abuses without PII.
- On International Relations: No direct impacts, as the bill focuses on domestic U.S. securities regulation without referencing foreign entities or cross-border data sharing.
Main Stakeholders Affected
- Investors and Individual Traders: Benefit from reduced PII exposure in trading records.
- Securities Exchanges and Associations (e.g., NYSE, Nasdaq, FINRA): Relieved of routine PII reporting burdens but must respond quickly to SEC requests.
- Broker-Dealers and Market Members: Face compliance adjustments to limit PII in CAT submissions, potentially lowering operational costs.
- SEC: Limited in data collection tools, requiring justification for PII access and mandatory data destruction.
Notable Legal, Constitutional, or Political Implications
- Legal: Reinforces data minimization principles in financial regulation, aligning with laws like the Gramm-Leach-Bliley Act on financial privacy, but could face challenges if it impedes SEC enforcement under the Securities Exchange Act of 1934.
- Constitutional: Supports Fourth Amendment privacy interests by curbing government-mandated data collection without specific cause, though it balances this against the government's regulatory authority.
- Political: Highlights bipartisan concerns over data privacy in finance (introduced by senators from both parties), potentially influencing broader debates on surveillance versus individual rights in post-Dodd-Frank reforms.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (8)
Sen. Ricketts, Pete [R-NE], Sen. Daines, Steve [R-MT], Sen. Boozman, John [R-AR], Sen. Britt, Katie Boyd [R-AL], Sen. Moran, Jerry [R-KS], Sen. Cotton, Tom [R-AR], Sen. Lee, Mike [R-UT], Sen. Tuberville, Tommy [R-AL]
Recent Actions
- 2025-02-20: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- 2025-02-20: Introduced in Senate
Bill Versions
- Protecting Investors’ Personally Identifiable Information Act — issued 2025-02-20 — PDF (4 pages)