116 HR 4335 IH: 8–K Trading Gap Act of 2019 U.S. House of Representatives 2019-09-16 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I116th CONGRESS1st SessionH. R. 4335IN THE HOUSE OF REPRESENTATIVESSeptember 16, 2019Mrs. Carolyn B. Maloney of New York introduced the following bill; which was referred to the Committee on Financial ServicesA BILLTo amend the Securities Exchange Act of 1934 to require the Securities and Exchange Commission to issue rules that prohibit officers and directors of certain companies from trading securities in anticipation of a current report, and for other purposes.

1.

Short title

This Act may be cited as the 8–K Trading Gap Act of 2019.

2.

Prohibition on certain trading in anticipation of a current report

The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is amended by inserting after section 10D the following:

10E.

Prohibition on certain trading in anticipation of a current report

(a)

Prohibition

Not later than 1 year after the date of enactment of this section, the Commission shall issue rules that require each issuer that is subject to reporting requirements under section 13(a) or 15(d) to establish and maintain policies, controls, and procedures that are reasonably designed to prohibit executive officers and directors of the issuer from purchasing, selling, or otherwise transferring any equity security of the issuer, directly or indirectly— (1)with respect to an event described in sections 1 through 6 of Form 8–K, between— (A)the occurrence of such event; and (B)the filing or furnishing of a current report on Form 8–K with respect to such event; and (2)with respect to an event described in section 7 or 8 of Form 8–K, between— (A)the date on which the issuer determines that it will disclose such event; and (B)the filing or furnishing of a current report on Form 8–K with respect to such event. (b)

Permissible transactions

In issuing rules under subsection (a), the Commission— (1)may exempt certain transactions that the Commission determines is appropriate, including those that— (A)occur automatically; (B)are made pursuant to an advance election; or (C)except as provided in paragraph (2), involve a purchase or sale of equity securities that satisfies the conditions under section 240.10b5–1(c) of title 17, Code of Federal Regulations; and (2)may not exempt from those rules a transaction made by an executive officer or director of an issuer under a plan that— (A)is described in section 240.10b5–1(c)(1)(i)(A)(3) of title 17, Code of Federal Regulations; and (B)was adopted— (i)with respect to an event described in sections 1 through 6 of Form 8–K, between— (I)the occurrence of such event; and (II)the filing or furnishing of a current report on Form 8–K with respect to such event; and (ii)with respect to an event described in section 7 or 8 of Form 8–K, between— (I)the date on which the issuer determines that it will disclose such event; and (II)the filing or furnishing of a current report on Form 8–K with respect to such event.

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