Aligning SEC Regulations for the World Bank’s International Development Association Act
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Would exempt securities issued by the World Bank's International Development Association (IDA) from U.S. securities registration and disclosure laws, placing IDA on equal regulatory footing with other multilateral development banks in which the United States holds membership.
The Securities and Exchange Commission would retain authority to suspend the exemption at any time, and the exemption would not take effect if the Treasury Department reports that IDA is providing financial assistance to a government designated as a state sponsor of terrorism.
What this bill would do
What it would do
The bill would amend the International Development Association Act to deem IDA-issued and IDA-guaranteed securities as "exempted securities" under both the Securities Act of 1933 and the Securities Exchange Act of 1934. This would relieve IDA from the standard registration and disclosure requirements that apply to private issuers. In exchange, IDA would be required to file annual and other reports with the Securities and Exchange Commission as the SEC determines appropriate. The SEC, consulting with the National Advisory Council on International Monetary and Financial Problems, would retain authority to suspend the exemption for any or all IDA securities at any time.
The exemption would take effect 30 days after enactment, but would not take effect at all if the Secretary of the Treasury reports to Congress within that window that IDA is providing financial assistance to any country the Secretary of State has determined to be a state sponsor of terrorism under specified statutes.
Key provisions
- 1Would exempt IDA-issued and IDA-guaranteed securities from the Securities Act of 1933 and the Securities Exchange Act of 1934, treating them as exempted securities.
- 2Would require IDA to file annual and other reports with the SEC as the Commission deems appropriate given IDA's special character.
- 3Would authorize the SEC, consulting with the National Advisory Council on International Monetary and Financial Problems, to suspend the exemption at any time for any or all IDA securities.
- 4Would block the exemption from taking effect if Treasury reports within 30 days that IDA is financing a country designated as a state sponsor of terrorism.
Who would be affected
The IDA — the World Bank affiliate that provides concessional loans and grants to low-income developing countries — would be the primary beneficiary, gaining the same securities-law exemption already enjoyed by other U.S.-member multilateral development banks. Investors who hold or trade IDA-issued or IDA-guaranteed debt securities in U.S. markets would also be affected, as the securities would no longer carry the same registration and disclosure requirements as private-market offerings.
Why it matters
Currently, IDA securities lack the regulatory exemption available to other multilateral development banks of which the U.S. is a member, creating an inconsistency in how comparable institutions are treated under U.S. law. If enacted, IDA could issue or guarantee securities in U.S. markets more efficiently and at lower compliance cost — potentially expanding its capacity to finance development in low-income countries — while the SEC's standing authority to suspend the exemption preserves a check against misuse.
What would change
Changes to existing law
Amends International Development Association Act (22 U.S.C. 284 et seq.) (Sec. 2(a))
Adds a new Section 33 granting IDA securities an exemption from federal securities laws and establishing SEC reporting and suspension authority.
Amends Securities Act of 1933 (15 U.S.C. 77c(a)(2)) (Sec. 2(a))
Extends the existing exempted-securities category to include IDA-issued and IDA-guaranteed securities.
Amends Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(12)) (Sec. 2(a))
Extends the existing exempted-securities category to include IDA-issued and IDA-guaranteed securities.
Agencies directed to act
Effective dates
- Securities exemption for IDA takes effect
- Exemption blocked if Treasury terrorism-financing report is filed before effective date
Funding and costs
Congressional Budget Office estimate
CBO estimates H.R. 1764 would have no significant effect on the federal deficit, with zero impact on direct spending or revenues over the 2025–2035 period.
CBO estimates that H.R. 1764 would produce no changes in direct (mandatory) spending or revenues, leaving the deficit unchanged over the 2025–2035 scoring window. The bill would require the SEC to update rules and process additional disclosures, costing less than $500,000 in discretionary spending — and because the SEC is authorized to collect fees to offset its appropriation, the net effect on discretionary spending over 2025–2030 would be negligible. The bill contains no intergovernmental mandates, but it does impose a private-sector mandate (on entities that pay SEC fees), which CBO estimates would fall well below UMRA's annual threshold of $198 million (adjusted for inflation).
How implementation would work
The bill would take effect 30 days after enactment unless blocked by a Treasury terrorism-financing report within that window. Once in effect, IDA would be required to file annual and other reports with the SEC, with the scope determined by the SEC based on IDA's special character. The SEC, in consultation with the National Advisory Council on International Monetary and Financial Problems, would monitor compliance and could suspend the exemption at any time. The SEC would also include information on the exemption's operation and effects in its annual reports to Congress.
Legislative status & sources
Latest action
Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
Official CRS summary
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This bill exempts from securities regulations any securities issued by the International Development Association (IDA) of the World Bank. The association provides loans and grants to developing countries. The Securities and Exchange Commission may suspend this exemption at any time.
The bill does not apply if, before the bill's date of enactment, the Department of the Treasury reports that IDA is providing financial support to a country whose government has repeatedly provided support for acts of international terrorism, as determined by the Department of State.
Legislative subjects
Banking and financial institutions regulation; Finance and Financial Sector; Multilateral development programs; Securities; Securities and Exchange Commission (SEC)
Committee report
H. Rept. 119-25