[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4535 Reported in House (RH)]

                                                 Union Calendar No. 341

103d CONGRESS

  2d Session

                               H. R. 4535

                          [Report No. 103-626]

_______________________________________________________________________

                                 A BILL

   To amend the Securities Exchange Act of 1934 with respect to the 
extension of unlisted trading privileges for corporate securities, and 
                          for other purposes.

_______________________________________________________________________

                             July 28, 1994

Committed to the Committee of the Whole House on the State of the Union 
                       and ordered to be printed





                                                 Union Calendar No. 341
103d CONGRESS
  2d Session
                                H. R. 4535

                          [Report No. 103-626]

   To amend the Securities Exchange Act of 1934 with respect to the 
extension of unlisted trading privileges for corporate securities, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 26, 1994

   Mr. Wyden (for himself, Mr. Dingell, Mr. Markey, Miss Collins of 
    Michigan, Mr. Synar, Mr. Cooper, Mr. Hastert, and Ms. Margolies-
  Mezvinsky) introduced the following bill; which was referred to the 
                    Committee on Energy and Commerce

                             July 28, 1994

Additional sponsors: Mr. Richardson, Mrs. Collins of Illinois, and Mr. 
                                Moorhead

                             July 28, 1994

Committed to the Committee of the Whole House on the State of the Union 
                       and ordered to be printed

_______________________________________________________________________

                                 A BILL


 
   To amend the Securities Exchange Act of 1934 with respect to the 
extension of unlisted trading privileges for corporate securities, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Unlisted Trading Privileges Act of 
1994''.

SEC. 2. AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.

    (a) Unlisted Trading Privileges.--Section 12(f) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78l(f)) is amended by striking 
paragraphs (1) and (2) and inserting the following:
    ``(f)(1)(A) Notwithstanding the preceding subsections of this 
section, any national securities exchange, in accordance with the 
requirements of this subsection and the rules hereunder, may extend 
unlisted trading privileges to--
            ``(i) any security that is listed and registered on a 
        national securities exchange, subject to subparagraph (B); and
            ``(ii) any security that is otherwise registered pursuant 
        to this section, or that would be required to be so registered 
        except for the exemption from registration provided in 
        subparagraph (B) or (G) of subsection (g)(2), subject to 
        subparagraph (E) of this paragraph.
    ``(B) A national securities exchange may not extend unlisted 
trading privileges to a security described in subparagraph (A)(i) 
during such interval, if any, after the commencement of an initial 
public offering of such security, as is or may be required pursuant to 
subparagraph (C).
    ``(C) Not later than 180 days after the date of enactment of the 
Unlisted Trading Privileges Act of 1994, the Commission shall 
prescribe, by rule or regulation, the duration of the interval referred 
to in subparagraph (B), if any, as the Commission determines to be 
necessary or appropriate for the maintenance of fair and orderly 
markets, the protection of investors and the public interest, or 
otherwise in furtherance of the purposes of this title. Until the 
earlier of the effective date of such rule or regulation or 240 days 
after such date of enactment, such interval shall begin at the opening 
of trading on the day on which such security commences trading on the 
national securities exchange with which such security is registered and 
end at the conclusion of the next day of trading.
    ``(D) The Commission may prescribe, by rule or regulation such 
additional procedures or requirements for extending unlisted trading 
privileges to any security as the Commission deems necessary or 
appropriate for the maintenance of fair and orderly markets, the 
protection of investors and the public interest, or otherwise in 
furtherance of the purposes of this title.
    ``(E) No extension of unlisted trading privileges to securities 
described in subparagraph (A)(ii) may occur except pursuant to a rule, 
regulation, or order of the Commission approving such extension or 
extensions. In promulgating such rule or regulation or in issuing such 
order, the Commission--
            ``(i) shall find that such extension or extensions of 
        unlisted trading privileges is consistent with the maintenance 
        of fair and orderly markets, the protection of investors and 
        the public interest, and otherwise in furtherance of the 
        purposes of this title;
            ``(ii) shall take account of the public trading activity in 
        such securities, the character of such trading, the impact of 
        such extension on the existing markets for such securities, and 
        the desirability of removing impediments to and the progress 
        that has been made toward the development of a national market 
        system; and
            ``(iii) shall not permit a national securities exchange to 
        extend unlisted trading privileges to such securities if any 
        rule of such national securities exchange would unreasonably 
        impair the ability of a dealer to solicit or effect 
        transactions in such securities for its own account, or would 
        unreasonably restrict competition among dealers in such 
        securities or between such dealers acting in the capacity of 
        market makers who are specialists and such dealers who are not 
        specialists.
    ``(F) An exchange may continue to extend unlisted trading 
privileges in accordance with this paragraph only if the exchange and 
the subject security continue to satisfy the requirements for 
eligibility under this paragraph, including any rules and regulations 
issued by the Commission pursuant to this paragraph, except that 
unlisted trading privileges may continue with regard to securities 
which had been admitted on such exchange prior to July 1, 1964, 
notwithstanding the failure to satisfy such requirements. If unlisted 
trading privileges in a security are discontinued pursuant to this 
subparagraph, the exchange shall cease trading in that security, unless 
the exchange and the subject security thereafter satisfy the 
requirements of this paragraph and the rules issued hereunder.
    ``(G) For purposes of this paragraph--
            ``(i) a security is the subject of an initial public 
        offering if--
                    ``(I) the offering of the subject security is 
                registered under the Securities Act of 1933; and
                    ``(II) the issuer of the security, immediately 
                prior to filing the registration statement with respect 
                to the offering, was not subject to the reporting 
                requirements of section 13 or 15(d) of this title; and
            ``(ii) an initial public offering of such security 
        commences at the opening of trading on the day on which such 
        security commences trading on the national securities exchange 
        with which such security is registered.
    ``(2)(A) At any time within 60 days of commencement of trading on 
an exchange of a security pursuant to unlisted trading privileges, the 
Commission may summarily suspend such unlisted trading privileges on 
the exchange. Such suspension shall not be reviewable under section 25 
of this title and shall not be deemed to be a final agency action for 
purposes of section 704 of title 5, United States Code. Upon such 
suspension--
            ``(i) the exchange shall cease trading in the security by 
        the close of business on the date of such suspension, or at 
        such time as the Commission may prescribe by rule or order for 
        the maintenance of fair and orderly markets, the protection of 
        investors and the public interest, or otherwise in furtherance 
        of the purposes of this title; and
            ``(ii) if the exchange seeks to extend unlisted trading 
        privileges to the security, the exchange shall file an 
        application to reinstate its ability to do so with the 
        Commission pursuant to such procedures as the Commission may 
        prescribe by rule or order for the maintenance of fair and 
        orderly markets, the protection of investors and the public 
        interest, or otherwise in furtherance of the purposes of this 
        title.
    ``(B) A suspension under subparagraph (A) shall remain in effect 
until the Commission, by order, grants approval of an application to 
reinstate, as described in subparagraph (A)(ii).
    ``(C) A suspension under subparagraph (A) shall not affect the 
validity or force of an extension of unlisted trading privileges in 
effect prior to such suspension.
    ``(D) The Commission shall not approve an application by a national 
securities exchange to reinstate its ability to extend unlisted trading 
privileges to a security unless the Commission finds, after notice and 
opportunity for hearing, that the extension of unlisted trading 
privileges pursuant to such application is consistent with the 
maintenance of fair and orderly markets, the protection of investors 
and the public interest, and otherwise in furtherance of the purposes 
of this title. If the application is made to reinstate unlisted trading 
privileges to a security described in paragraph (1)(A)(ii), the 
Commission--
            ``(i) shall take account of the public trading activity in 
        such security, the character of such trading, the impact of 
        such extension on the existing markets for such a security, and 
        the desirability of removing impediments to and the progress 
        that has been made toward the development of a national market 
        system; and
            ``(ii) shall not grant any such application if any rule of 
        the national securities exchange making application under this 
        subsection would unreasonably impair the ability of a dealer to 
        solicit or effect transactions in such security for its own 
        account, or would unreasonably restrict competition among 
        dealers in such security or between such dealers acting in the 
        capacity of marketmakers who are specialists and such dealers 
        who are not specialists.''.
    (b) Conforming Amendment.--Section 12(f)(3) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78l(f)(3)) is amended by striking ``The 
Commission'' and inserting ``Notwithstanding paragraph (2), the 
Commission''.