The bill inserts a new Section 40A into the Securities Exchange Act of 1934 to create a Public Company Advisory Committee inside the Securities and Exchange Commission. The Committee is charged with advising the Commission on rules, regulations, and policies touching public reporting, corporate governance, proxy processes, trading, and capital formation; it may not advise on enforcement matters.
The Committee will send findings and recommendations to the Commission, which must review them and issue a public statement describing its assessment and any intended action.
Why it matters: the statute builds a permanent, formally recognized channel for issuer and adviser perspectives to reach SEC rulemakers. Because the Committee’s membership is drawn largely from public-company officers, industry associations, and their advisers, and because the bill exempts the body from the Federal Advisory Committee Act (FACA), the provision sharpens the balance between structured industry input and transparency/oversight concerns that compliance officers, counsel, and policy teams will need to manage.
At a Glance
What It Does
Creates a 10–20 member advisory committee inside the SEC appointed by the Commission; members serve four-year terms with staggered starts and elect their own Chair, Vice Chair, Secretary, and Assistant Secretary. The Committee meets at least twice a year, may form public or non-public subcommittees, and submits findings and recommendations to the Commission, which must publicly assess and disclose any intended action each time the Committee transmits advice.
Who It Affects
Public companies registered with the SEC (with a statutory exclusion for companies that own asset management, fixed income, investment advisory, broker-dealer, or proxy services businesses), trade and industry associations that represent them, and professional advisers (attorneys, accountants, investment bankers, financial advisers). SEC rulemaking staff will receive structured issuer input; investor advocates and other stakeholder groups will be affected indirectly.
Why It Matters
The Committee creates a sustained, statutory avenue for issuer perspectives to influence policy on reporting, governance, proxy voting, trading, and capital formation. Because the statute exempts the Committee from FACA and limits membership overlap with other SEC advisory committees, it changes both who speaks to the SEC and the procedural safeguards that apply to that input.
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What This Bill Actually Does
The bill directs the SEC to stand up an internal advisory body—the Public Company Advisory Committee—to provide targeted advice on regulatory priorities that touch public companies. The Commission appoints between 10 and 20 members drawn from three categories: officers/directors/senior officials of SEC-registered public companies (with a list of specified corporate activities excluded), executives from associations that represent those companies, and professional advisers and service providers to issuers.
The statute requires that at least half the members come from the officers/directors category.
Members serve four-year terms; the initial panel is staggered so roughly half serve two years initially. Members are not SEC employees simply by virtue of service.
The Committee elects its own Chair, Vice Chair, Secretary, and Assistant Secretary from among its members, and the Chair can create subcommittees that hold public or non-public meetings and feed recommendations to the full Committee. The bill sets a minimum meeting frequency (at least twice annually), requires two weeks’ written notice for meetings, and permits the Commission to call meetings as needed.The Commission must make staff available to support the Committee.
Members who are not full-time federal employees may receive per‑diems and compensation up to the daily equivalent of the Executive Schedule level V rate and standard travel allowances under title 5. When the Committee transmits findings or recommendations, the Commission must review them and promptly issue a public statement assessing the advice and disclosing any intended action; the statute expressly preserves the Commission’s discretion not to act on recommendations.
Finally, the bill makes Chapter 10 of part I of title 5 (FACA) inapplicable to the Committee, meaning FACA’s openness, recordkeeping, and chartering requirements do not govern this body.
The Five Things You Need to Know
Membership must be between 10 and 20 individuals appointed by the SEC, and at least 50% of members must be officers, directors, or senior officials of SEC-registered public companies.
Members serve four-year terms with staggered starts; the initial cohort is split so half serve two years and half serve four years.
The Committee may form public or non-public subcommittees, but it is barred from offering advice on the SEC’s enforcement program.
Non-federal members can be paid up to the daily equivalent of an Executive Schedule level V rate for each day spent performing Committee duties and may receive travel and per diem under section 5703(b) of title 5.
Chapter 10 of part I of title 5 (the Federal Advisory Committee Act) does not apply to the Committee, and the SEC must publicly assess and disclose its response whenever the Committee submits recommendations.
Section-by-Section Breakdown
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Establishment and narrow-purpose mandate
This subsection creates the Committee inside the SEC and narrowly defines its advisory remit: rule- and policy-related advice on investor protection, market integrity, and capital formation as they relate to public reporting, governance, proxy processes, trading, and capital formation. Critically, it prohibits the Committee from advising on enforcement, preserving the wall between rule development input and enforcement discretion.
Who may serve and membership composition rules
The Commission appoints 10–20 members from three buckets—issuer executives, association executives, and professional advisers—while excluding representatives from companies that own certain financial businesses. The statute requires at least half of members be drawn from issuer executives, and it bars organizations that already sit on other SEC advisory committees from also placing representatives on this Committee, a mechanism intended to broaden representation but that may narrow the pool in practice.
Internal leadership and subcommittee authority
Members elect a Chair, Vice Chair, Secretary, and Assistant Secretary for two-year internal terms. The Chair can create subcommittees which may meet publicly or privately and which can recommend items to the full Committee—this delegates agenda-setting power inside the Committee and creates multiple fora for stakeholder input that can bypass broader visibility if meetings are non-public.
Meeting rules, notice, support, and pay
The bill sets a floor of two meetings per year, requires two weeks’ written notice to members, and allows the Commission to provide staff support the Committee chair deems necessary. It authorizes compensation for non‑federal members up to the daily equivalent of Executive Schedule level V and travel/per diem under existing federal law, which creates a modest funding mechanism to offset participant costs and encourages participation by private-sector leaders.
Commission review, public response, and FACA exclusion
When the Committee sends findings or recommendations, the Commission must review them and 'promptly' issue a public statement assessing the advice and disclosing any intended action. At the same time, the Committee is explicitly exempted from FACA, and the statute clarifies the Commission is not required to accept or act on Committee recommendations. Together, these provisions create a public-facing feedback loop while removing FACA procedural constraints that would otherwise govern advisory committees.
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Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- C-suite executives and boards of large public companies — gain a statutory, recurring channel to present issuer perspectives directly to SEC rulemakers and influence policy on reporting, governance, proxy rules, and capital formation.
- Industry trade associations — receive formal access to coordinate and amplify member views via seats on the Committee and its subcommittees.
- Professional advisers (law firms, accounting firms, investment banks, financial advisers) — increase visibility into prospective SEC policy changes and can advance client-facing positions through participation and recommendations.
- SEC rulemaking staff — obtain structured, recurring input from issuers that can inform cost/benefit assessments, drafting, and targeted adjustments to proposed rules.
Who Bears the Cost
- The Securities and Exchange Commission — must allocate staff support, administrative resources, and budget to run the Committee and process recommendations, adding to agency operational workload without a matching enforcement or rulemaking mandate.
- Smaller public companies and unaffiliated investors — likely underrepresented on the Committee (membership skews to executives of larger issuers and advisers), reducing their direct voice and potentially increasing the influence of larger market participants.
- Investor advocates and public-interest groups — face an implicit cost in having a parallel, FACA-exempt advisory channel that may receive priority access to SEC officials but lack the procedural protections and public oversight that would accompany a FACA-covered committee.
- Organizations already serving on other SEC advisory committees — barred from dual representation on this Committee, potentially losing an avenue to coordinate issuer-facing perspectives across panels.
Key Issues
The Core Tension
The statute trades increased, institutionalized issuer input for fewer procedural transparency safeguards: it gives public companies and their advisers a reliable seat at the table while exempting that table from FACA rules—boosting issuer influence and speed of input but raising the risk of reduced public scrutiny and regulatory capture.
The bill intentionally concentrates issuer and adviser voices inside a statutory committee while stripping the panel of FACA’s procedural safeguards. That combination raises practical questions about transparency and accountability: subcommittees may meet non-publicly, FACA’s chartering, public meeting, and records rules do not apply, and the statute does not define the standard for the Commission’s 'prompt' public assessment.
The result is a structured advisory channel that can operate with fewer procedural constraints than many existing federal advisory bodies.
The membership rules try to guarantee issuer representation (a hard 50% floor) while excluding firms that own certain financial services businesses and preventing organizations from serving on both this and other SEC advisory committees. Those provisions will reshape who can attend and speak; enforcement of the exclusion and the boundary between eligible advisers and excluded entities is likely to require agency guidance.
The bill also preserves the Commission’s discretion not to act on recommendations, but it simultaneously creates a public-perception risk: the SEC must publicly disclose its intended action after each submission, potentially attracting criticism if the Commission repeatedly declines issuer-favored proposals.
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