[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 618 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 618

 To extend and revise rulemaking authority with respect to government 
 securities under the Federal securities laws, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 26, 1993

 Mr. Markey (for himself, Mr. Fields of Texas, Mr. Dingell, Mr. Wyden, 
  Mr. Synar, and Mr. Cooper) introduced the following bill; which was 
            referred to the Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL


 
 To extend and revise rulemaking authority with respect to government 
 securities under the Federal securities laws, 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 ``Government Securities Reform Act of 
1993''.

SEC. 2. EXTENSION OF GOVERNMENT SECURITIES RULEMAKING AUTHORITY.

    Section 15C(g)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 
78o-5(g)(1)) is amended by striking ``October 1, 1991'' and inserting 
``October 1, 1997''.

SEC. 3. RECORDKEEPING.

    Section 17 of the Securities Exchange Act of 1934 (15 U.S.C. 78q) 
is amended by adding at the end thereof the following new subsection:
    ``(i) Government Securities Recordkeeping.--
            ``(1) Maintenance of records.--The Commission may prescribe 
        rules to require any government securities broker or government 
        securities dealer to make, keep, and maintain for prescribed 
        periods, in a form and containing such information as may be 
        specified by the Commission, records of government securities 
        transactions, including (but not limited to) records of the 
        date and time of execution of trades.
            ``(2) Examination of records.--Every government securities 
        broker and government securities dealer shall make such records 
        available for examination to representatives of the appropriate 
        regulatory agency for such government securities broker or 
        government securities dealer and furnish copies thereof to such 
        representatives on request.
            ``(3) Furnishing records to reconstruct trading.--Every 
        government securities broker and government securities dealer 
        shall furnish to the Commission on request such of the 
        information required to be made, kept, or maintained under this 
        subsection as the Commission may require to reconstruct trading 
        in furtherance of the purposes of this title. In requiring 
        information pursuant to this paragraph, the Commission shall 
        specify the information required, the period for which it is 
        required, the time and date on which the information must be 
        furnished, and whether the information is to be furnished 
        directly to the Commission, to the Federal Reserve Bank of New 
        York, or to an appropriate regulatory agency or self-regulatory 
        organization with responsibility for examining the government 
        securities broker or government securities dealer. The 
        Commission may require that such information be furnished in 
        machine readable form.
            ``(4) Limitation; construction.--The Commission shall not 
        utilize its authority under this subsection to develop regular 
        reporting requirements for information concerning a substantial 
        segment of all daily transactions in government securities; 
        however, the Commission may require information to be furnished 
        under this subsection as frequently as necessary for particular 
        inquiries or investigations. The Commission shall, where 
        feasible, avoid requiring any information to be furnished under 
        this subsection that the Commission may obtain from the Federal 
        Reserve Bank of New York.
            ``(5) Consultation requirement.--In making rules under this 
        subsection applicable to government securities brokers and 
        government securities dealers for which a Federal banking 
        agency is the appropriate regulatory agency, the Commission 
        shall consult with and consider the views of each such 
        appropriate regulatory agency. If a Federal banking agency 
        comments in writing on a proposed rule under this subsection 
        that has been published for comment, the Commission shall 
        respond in writing to such written comment before adopting the 
        proposed rule. The Commission shall, at the request of the 
        Federal banking agency, publish such comment and response in 
        the Federal Register at the time of publishing the adopted 
        rule. For purposes of this paragraph, the term `Federal banking 
        agency' has the meaning provided in subsection (h)(3)(G).
            ``(6) Authority of the commission to limit disclosure of 
        information.--Notwithstanding any other provision of law, the 
        Commission and the appropriate regulatory agencies shall not be 
        compelled to disclose any information required under this 
        subsection. Nothing in this subsection shall authorize the 
        Commission or any appropriate regulatory agency to withhold 
        information from Congress, or prevent the Commission or any 
        appropriate regulatory agency from complying with a request for 
        information from any other Federal department or agency 
        requesting information for purposes within the scope of its 
        jurisdiction, or complying with an order of a court of the 
        United States in an action brought by the United States, the 
        Commission, or the appropriate regulatory agency. For purposes 
        of section 552 of title 5, United States Code, this subsection 
        shall be considered a statute described in subsection (b)(3)(B) 
        of such section 552.''.

SEC. 4. LARGE POSITION REPORTING.

    (a) Amendment.--Section 15C of the Securities Exchange Act of 1934 
(15 U.S.C. 78o-5) is amended--
            (1) by redesignating subsections (f) and (g) as subsections 
        (g) and (h); and
            (2) by inserting after subsection (e) the following new 
        subsection:
    ``(f) Large Position Reporting.--
            ``(1) Reporting requirements.--The Secretary may adopt 
        rules to require specified persons holding, maintaining, or 
        controlling large positions in to-be-issued or recently issued 
        Treasury securities to file such reports regarding such 
        positions as the Secretary determines to be necessary or 
        appropriate for the purpose of monitoring the impact in the 
        Treasury securities market of concentrations of positions in 
        Treasury securities and for the purpose of otherwise assisting 
        the Commission in the enforcement of this title. Reports 
        required under this subsection shall be filed with the Federal 
        Reserve Bank of New York, acting as agent for the Secretary, 
        and shall be provided by that Federal Reserve Bank to the 
        Commission on a timely basis.
            ``(2) Limitation on requiring certain reports.--The 
        Secretary may not require under this subsection--
                    ``(A) reports from persons that are not government 
                securities brokers or government securities dealers, or
                    ``(B) reports from government securities brokers 
                and government securities dealers that identify 
                particular customers and customer positions,
        except when the Secretary determines, after consultation with 
        the Commission and the Board of Governors of the Federal 
        Reserve System, that market conditions exist that require such 
        information be obtained to carry out the purposes of this 
        subsection.
            ``(3) Additional considerations.--In making determinations 
        under paragraphs (1) and (2), the Secretary shall take into 
        account any impact on the efficiency and liquidity of the 
        Treasury securities market and on the cost to the taxpayers of 
        funding the Federal debt.
            ``(4) Recordkeeping requirements.--Rules under this 
        subsection may require persons holding, maintaining, or 
        controlling large positions in Treasury securities to make and 
        keep for prescribed periods such records as the Secretary 
        determines are necessary or appropriate to ensure that such 
        persons can comply with reporting requirements under this 
        subsection.
            ``(5) Aggregation rules.--Rules under this subsection--
                    ``(A) may prescribe the manner in which positions 
                and accounts shall be aggregated for the purpose of 
                this subsection, including aggregation on the basis of 
                common ownership or control; and
                    ``(B) may define which persons (individually or as 
                a group) hold, maintain, or control large positions.
            ``(6) Definitional authority; determination of reporting 
        threshold.--
                    ``(A) In prescribing rules under this subsection, 
                the Secretary may, consistent with the purpose of this 
                subsection, define terms used in this subsection that 
                are not otherwise defined in section 3 of this title.
                    ``(B) Rules under this subsection shall specify--
                            ``(i) the minimum size of positions subject 
                        to reporting under this subsection, taking into 
                        account the purposes of this subsection and the 
                        potential for price distortions or other 
                        anomalies resulting from large positions;
                            ``(ii) the types of positions (which may 
                        include financing arrangements) to be reported;
                            ``(iii) the securities to be covered; and
                            ``(iv) the form and manner in which reports 
                        shall be transmitted, which may include 
                        transmission in machine readable form.
            ``(7) Limitation on disclosure of information.--
        Notwithstanding any other provision of law, the Secretary and 
        the Commission shall not be compelled to disclose any 
        information required to be kept or reported under this 
        subsection. Nothing in this subsection shall authorize the 
        Secretary or the Commission to withhold information from 
        Congress, or prevent the Secretary or the Commission complying 
        with a request for information from any other Federal 
        department or agency requesting information for purposes within 
        the scope of its jurisdiction, or complying with an order of a 
        court of the United States in an action brought by the United 
        States, the Secretary, or the Commission. For purposes of 
        section 552 of title 5, United States Code, this subsection 
        shall be considered a statute described in subsection (b)(3)(B) 
        of such section 552.''.
    (b) Conforming Amendment.--Section 15C(d)(2) of such Act is amended 
to read as follows:
    ``(2) Information received by an appropriate regulatory agency, the 
Secretary, or the Commission from or with respect to any government 
securities broker, government securities dealer, any person associated 
with a government securities broker or government securities dealer, or 
any other person subject to this section or rules promulgated 
thereunder, may be made available by the Secretary or the recipient 
agency to the Commission, the Secretary, the Department of Justice, the 
Commodity Futures Trading Commission, any appropriate regulatory 
agency, any self-regulatory organization, or any Federal Reserve 
Bank.''.

SEC. 5. AUTHORITY OF THE COMMISSION TO REGULATE TRANSACTIONS IN 
              EXEMPTED SECURITIES.

    (a) Prevention of Fraudulent and Manipulative Acts and Practices.--
Section 15(c)(2) of the Securities Exchange Act of 1934 (15 U.S.C. 
78o(c)(2)) is amended--
            (1) by inserting ``(A)'' after ``(2)'';
            (2) by striking ``fictitious quotation, and no municipal 
        securities dealer'' and inserting the following:
``fictitious quotation.
    ``(B) No municipal securities dealer'';
            (3) by striking ``fictitious quotation. The Commission 
        shall'' and inserting the following:
``fictitious quotation.
    ``(C) No government securities broker or government securities 
dealer shall make use of the mails or any means or instrumentality of 
interstate commerce to effect any transaction in, or induce or attempt 
to induce the purchase or sale of, any government security in 
connection with which such government securities broker or government 
securities dealer engages in any fraudulent, deceptive, or manipulative 
act or practice, or makes any fictitious quotation.
    ``(D) The Commission shall''; and
            (4) by inserting at the end thereof the following:
    ``(E) The Commission shall, prior to adopting rules or regulations 
under subparagraph (C), consult with and consider the views of the 
Secretary of the Treasury and the Board of Governors of the Federal 
Reserve System. If the Secretary of the Treasury or the Board of 
Governors of the Federal Reserve System comments in writing on a 
proposed rule or regulation of the Commission under such subparagraph 
(C) that has been published for comment, the Commission shall respond 
in writing to such written comment before adopting the proposed 
rule.''.
    (b) Fraudulent and Manipulative Devices and Contrivances.--Section 
15(c)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(c)(1)) 
is amended--
            (1) by inserting ``(A)'' after ``(c)(1)'';
            (2) by striking ``contrivance, and no municipal securities 
        dealer'' and inserting the following:
``contrivance.
    ``(B) No municipal securities dealer'';
            (3) by striking ``contrivance. The Commission shall'' and 
        inserting the following:
``contrivance.
    ``(C) No government securities broker or government securities 
dealer shall make use of the mails or any means or instrumentality of 
interstate commerce to effect any transaction in, or to induce or 
attempt to induce the purchase or sale of, any government security by 
means of any manipulative, deceptive, or other fraudulent device or 
contrivance.
    ``(D) The Commission shall''; and
            (4) by inserting at the end thereof the following:
    ``(E) The Commission shall, prior to adopting rules or regulations 
under subparagraph (C), consult with and consider the views of the 
Secretary of the Treasury and the Board of Governors of the Federal 
Reserve System. If the Secretary of the Treasury or the Board of 
Governors of the Federal Reserve System comments in writing on a 
proposed rule or regulation of the Commission under such subparagraph 
(C) that has been published for comment, the Commission shall respond 
in writing to such written comment before adopting the proposed 
rule.''.

SEC. 6. BROKER/DEALER SUPERVISION RESPONSIBILITIES.

    Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) 
is amended by adding at the end thereof the following new subsection:
    ``(h) Policies and Procedures to Prevent and Detect Violations.--
Every government securities broker and government securities dealer 
shall establish, maintain, and enforce written policies and procedures 
reasonably designed, taking into consideration the nature of such 
person's business, to prevent and detect in connection with the 
purchase or sale of government securities, insofar as practicable, 
fraud and manipulation in violation of this title and the rules and 
regulations thereunder and violations of such other provisions of this 
title and the rules and regulations thereunder as the Commission shall 
designate by rule. The Commission, as it deems necessary or appropriate 
in the public interest or for the protection of investors, shall 
prescribe rules or regulations to require specific policies or 
procedures reasonably designed to prevent such violations.''.

SEC. 7. SALES PRACTICE RULEMAKING AUTHORITY.

    (a) Rules for Financial Institutions.--Section 15C(b) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o-5(b)) is amended--
            (1) by redesignating paragraphs (3), (4), (5), and (6) as 
        paragraphs (4), (5), (6), and (7), respectively; and
            (2) by inserting after paragraph (2) the following new 
        paragraph:
    ``(3) Sales Practice Rules.--(A) With respect to any financial 
institution that has filed notice as a government securities broker or 
government securities dealer or that is required to file notice under 
subsection (a)(1)(B) of this section, the appropriate regulatory agency 
for such government securities broker or government securities dealer 
may issue such rules with respect to transactions in government 
securities as may be necessary to prevent fraudulent and manipulative 
acts and practices and to promote just and equitable principles of 
trade.
    ``(B) Each appropriate regulatory agency shall consult with the 
other appropriate regulatory agencies for the purpose of ensuring the 
consistency of the rules prescribed by such agencies under this 
paragraph. The appropriate regulatory agencies shall consult with and 
consider the views of the Secretary and the Commission with respect to 
the impact of such rules on the operations of the market for government 
securities, consistency with analogous rules of self-regulatory 
organizations, and the enforcement and administration of such rules. 
The consultation required by this paragraph shall be conducted prior to 
the appropriate regulatory agency adopting a rule under this paragraph, 
unless the appropriate regulatory agency determines that an emergency 
exists requiring expeditious and summary action and publishes its 
reasons therefor. If the Secretary or the Commission comments in 
writing to the appropriate regulatory agency on a proposed rule that 
has been published for comment, the appropriate regulatory agency shall 
respond in writing to such written comment before adopting the rule.''.
    (b) Rules by Registered Securities Associations.--
            (1) Removal of limitations on authority.--(A) Section 15A 
        of the Securities Exchange Act of 1934 (15 U.S.C. 78o-3) is 
        amended--
                    (i) by striking subsections (f)(1) and (f)(2); and
                    (ii) by redesignating subsection (f)(3) as 
                subsection (f).
            (B) Section 15A(g) of such Act is amended--
                    (i) by striking ``exempted securities'' in 
                paragraph (3)(D) and inserting ``municipal 
                securities'';
                    (ii) by striking paragraph (4); and
                    (iii) by redesignating paragraph (5) as paragraph 
                (4).
            (2) Oversight of registered securities associations.--
        Section 19 of the Securities Exchange Act of 1934 (15 U.S.C. 
        78s) is amended--
                    (A) in subsection (b), by adding at the end thereof 
                the following new paragraph:
    ``(5) The Commission shall consult with and consider the views of 
the Secretary of the Treasury prior to approving a proposed rule change 
filed by a registered securities association that primarily concerns 
conduct related to transactions in government securities, except where 
the Commission determines that an emergency exists requiring 
expeditious or summary action and publishes its reasons therefor. If 
the Secretary comments in writing to the Commission on such proposed 
rule change that has been published for comment, the Commission shall 
respond in writing to such written comment before approving the 
proposed rule change.'';
                    (B) in subsection (c), by adding at the end thereof 
                the following new paragraph:
    ``(5) Before adopting a rule to amend a rule of a registered 
securities association that primarily concerns conduct related to 
transactions in government securities, the Commission shall consult 
with and consider the views of the Secretary, except where the 
Commission determines that an emergency exists requiring expeditious or 
summary action and publishes its reasons therefor. If the Secretary 
comments in writing to the Commission on such proposed rule change that 
has been published for comment, the Commission shall respond in writing 
to such written comment before approving the proposed rule change.''.
            (3) Conforming amendment.--
                    (A) Section 3(a)(12)(B)(ii) of such Act (15 U.S.C. 
                78b(a)(12)(B)(ii)) is amended by striking ``15, 15A 
                (other than subsection (g)(3)), and 17A'' and inserting 
                ``15 and 17A''.
                    (B) Section 15(b)(7) of such Act (15 U.S.C. 
                78o(b)(7)) is amended by inserting ``or government 
                securities broker or government securities dealer 
                registered (or required to register) under section 
                15C(a)(1)(A)'' after ``No registered broker or 
                dealer''.

SEC. 8. MARKET INFORMATION.

    (a) Transparency.--The Securities Exchange Act of 1934 is amended 
by adding at the end of section 11A (15 U.S.C. 78k-1) the following:

       ``market information with respect to government securities

    ``Sec. 11B. (a) Findings.--The Congress finds that--
            ``(1) it is necessary and appropriate for the protection of 
        investors to assure public dissemination of information 
        concerning government securities transactions and quotations;
            ``(2) government securities brokers, government securities 
        dealers, and government securities information systems have 
        created substantial transparency through the dissemination of 
        information concerning government securities transactions and 
        quotations and are expected to maintain and improve such 
        transparency through voluntary actions; and
            ``(3) if such voluntary actions do not attain the 
        objectives stated in subsections (b) and (c), the Commission 
        should have the authority, in accordance with the requirements 
        of this section, to assure the attainment of those objectives.
    ``(b) Government Securities Information Systems.--
            ``(1) Conditional authority.--Upon a finding by the 
        Commission that information available to investors generally 
        through government securities information systems taken as a 
        whole does not meet the objectives set forth in paragraph (2) 
        with respect to a class or category of regularly traded 
        government securities, the Commission, having due regard for 
        the public interest, the protection of investors, the 
        maintenance of fair and orderly markets, the integrity, 
        liquidity, and efficiency of the government securities market, 
        and the fostering of competition, may prescribe rules 
        applicable to government securities information systems to the 
        extent necessary to assure that government securities 
        information systems meet the objectives set forth in paragraph 
        (2) with respect to such class or category of securities. The 
        Commission (A) shall not utilize its authority under this 
        paragraph to regulate the amount of fees charged for 
        information, and (B) shall not require dissemination through 
        government securities information systems of information not 
        transmitted by or through government securities interdealer 
        brokers (or their functional equivalents).
            ``(2) Objectives.--The Commission may not take action under 
        paragraph (1) of this subsection unless the Commission makes 
        the finding required by paragraph (1) and determines that such 
        action is necessary or appropriate--
                    ``(A) to assure that information on transactions in 
                and quotations for a class or category of regularly 
                traded government securities being reported through 
                government securities information systems taken as a 
                whole is available to investors generally and 
                includes--
                            ``(i) information concerning price and 
                        volume with respect to a reasonably sufficient 
                        number or proportion of transactions in any 
                        security in such class or category to permit 
                        the determination of the prevailing market 
                        price for such security; and
                            ``(ii) reports of the highest bids and 
                        lowest offers for any security in such class or 
                        category being reported through such systems 
                        (including the size at which government 
                        securities brokers and dealers are willing to 
                        trade with respect to such bids and offers);
                    ``(B) to assure that such information is timely 
                reported;
                    ``(C) to assure that such information is made 
                available to investors generally on a fair, reasonable, 
                and nondiscriminatory basis; and
                    ``(D) to assure the ability of investors to obtain 
                and retain such information for analytical purposes.
    ``(c) Standby Authority With Respect to Market Information.--
            ``(1) Authority.--Subject to paragraph (2), the Commission 
        by rule--
                    ``(A) may require any government securities broker 
                or government securities dealer that regularly trades a 
                security as to which the Secretary of the Treasury has 
                made a determination under paragraph (2) to report any 
                purchase or sale of such a security to any securities 
                information processor that has the capability and 
                agrees to disseminate such reports or, if there is no 
                such processor, to a self-regulatory organization 
                designated by the Commission to receive such reports, 
                and may require such securities information processor 
                or self-regulatory organization to make information 
                with respect to such purchase or sale publicly 
                available on fair, reasonable, and nondiscriminatory 
                terms and conditions; and
                    ``(B) may require any self-regulatory organization, 
                and any government securities broker or government 
                securities dealer that regularly trades such 
                securities, to act jointly in planning, developing, or 
                operating facilities for the dissemination of 
                information with respect to purchases or sales of 
                government securities.
            ``(2) Inadequate price information finding required.--The 
        Commission may not take an action authorized by paragraph (1) 
        of this subsection with respect to any class or category of 
        regularly traded government securities unless the Secretary of 
        the Treasury, after consultation with the Commission, 
        determines that information that is available to investors 
        generally with respect to such class or category either--
                    ``(A) does not permit investors in general to 
                determine readily the prevailing market price of 
                securities in such class or category of regularly 
                traded government securities; or
                    ``(B) is no longer representative of the market for 
                such class or category of government securities.
            ``(3) Rule of construction.--This subsection is not 
        intended to authorize the Commission to require the 
        establishment or use of a consolidated trading system for 
        government securities.
    ``(d) Rulemaking.--
            ``(1) Consultation.--In making rules under this section, 
        the Commission shall consult with and consider the views of the 
        Secretary of the Treasury and the Board of Governors of the 
        Federal Reserve System. If the Secretary of the Treasury or the 
        Board of Governors of the Federal Reserve System comments in 
        writing on a proposed rule that has been published for comment, 
        the Commission shall respond in writing to such written comment 
        before adopting the proposed rule. Prior to prescribing a rule 
        pursuant to subsection (c), the Commission shall consult with 
        representatives of the persons described in subsection (a)(2).
            ``(2) Standards.--In making rules under this subsection, 
        the Commission may designate classes or categories of 
        government securities, establish standards for determining 
        whether they are regularly traded, and establish standards for 
        determining whether a person regularly trades such government 
        securities or a class or category of such government 
        securities.
    ``(e) Examination Access.--
            ``(1) Authority to examine.--Systems and operations of 
        government securities information systems (and records relating 
        thereto) are subject to reasonable examination by 
        representatives of the Commission--
                    ``(A) to assess whether the objectives set forth in 
                subsection (b)(2) of this section are being met; and
                    ``(B) to assess compliance with any rules or 
                regulations under this section.
            ``(2) Limitations.--The Commission shall have no authority 
        under this section--
                    ``(A) to examine the financial, personnel, 
                marketing, sales, product, and service development, or 
                similar business records of such person; or
                    ``(B) to examine systems and operations unrelated 
                to dissemination of government securities information.
        The Commission may not examine contracts except to the extent 
        necessary to assess whether the objectives set forth in 
        subsections (b)(2)(C) and (b)(2)(D) of this section are being 
        met, and to determine compliance with rules prescribed for 
        purposes of such subsections.
            ``(3) Protection of information.--Notwithstanding any other 
        provision of law, the Commission (and any Federal agency or 
        department to which such information is disclosed) shall not be 
        compelled to disclose any information obtained by the 
        Commission in an examination under this subsection. 
        Furthermore, the Commission (and any Federal agency or 
        department to which such information is disclosed) shall not 
        publicly disclose information obtained by the Commission in 
        such an examination, except that this sentence shall not 
        prohibit the disclosure of such information in a proceeding 
        brought by the Commission. Nothing in this section shall 
        authorize the Commission to withhold information from Congress, 
        or prevent the Commission or any appropriate regulatory agency 
        from complying with a request for information from any other 
        Federal department or agency requesting information for 
        purposes within the scope of its jurisdiction, or complying 
        with an order of a court of the United States in an action 
        brought by the United States, the Commission, or the 
        appropriate regulatory agency. For purposes of section 552 of 
        title 5, United States Code, this subsection shall be 
        considered a statute described in subsection (b)(3)(B) of such 
        section 552.
    ``(f) Violations of Rules Prohibited.--No government securities 
broker, government securities dealer, securities information processor, 
or government securities information system shall make use of the mails 
or any means or instrumentality of interstate commerce to effect any 
transaction in, to induce the purchase or sale of, or to distribute or 
disseminate any quotation or transaction report for, any government 
security in contravention of any rule adopted pursuant to this section.
    ``(g) Effective Date of Rulemaking Authority.--The authority of the 
Commission to prescribe rules under subsections (b) and (c) is 
effective on October 1, 1993.
    ``(h) Definition.--For purposes of this section, the term 
`government securities' does not include a security secured by an 
interest in pools of mortgages representing liens on residential real 
estate.''.
    (b) Conforming Amendments.--The Securities Exchange Act of 1934 is 
amended--
            (1) by striking ``(other than an exempted security)'' in 
        section 3(a)(22)(A);
            (2) by adding at the end of section 3(a) the following:
            ``(53) The term `government securities information system' 
        means any person engaged in the business of operating a system 
        for the timely, automated dissemination to more than 10 persons 
        of (A) quotations for government securities of or through 
        government securities interdealer brokers (or their functional 
        equivalents), or (B) reports of purchases or sales of 
        government securities by or through government securities 
        interdealer brokers (or their functional equivalents).''; and
            (3) by inserting at the end of section 11A(b)(1) the 
        following: ``The Commission shall not require any securities 
        information processor to register under this section in 
        connection with its activities with respect to quotations for 
        or transactions in exempted securities.''.
    (c) Studies With Respect to Mortgage-Backed Government 
Securities.--
            (1) Studies required.--With respect to government 
        securities (as defined in section 3(a)(42) of the Securities 
        Exchange Act of 1934) that are secured by an interest in pools 
        of mortgages representing liens on residential real estate 
        (hereafter in this subsection referred to as `mortgage-backed 
        government securities'), the Secretary of the Treasury, the 
        Securities and Exchange Commission, and the Board of Governors 
        of the Federal Reserve System shall monitor and evaluate the 
        effectiveness of private sector efforts to disseminate 
        mortgage-backed government securities price and volume 
        information, and determine whether such efforts--
                    (A) assure the prompt, accurate, reliable, and fair 
                reporting, collection, processing, distribution, and 
                publication of information with respect to quotations 
                for and transactions in mortgage-backed government 
                securities and the fairness and usefulness of the form 
                and content of such information;
                    (B) assure that all mortgage-backed government 
                securities information processors may, for the purpose 
                of distribution and publication, obtain on fair and 
                reasonable terms such information with respect to 
                quotations for and transactions in mortgage-backed 
                government securities, as reported, collected, 
                processed, or prepared for distribution or publication 
                by any processor of such information (including self-
                regulatory organizations) acting in an exclusive 
                capacity; and
                    (C) assure that all mortgage-backed government 
                securities brokers, mortgage-backed government 
                securities dealers, mortgage-backed government 
                securities information processors, and other 
                appropriate persons may obtain on nondiscriminatory 
                terms such information with respect to quotations for 
                and transactions in mortgage-backed government 
                securities as is distributed or published.
            (2) Reports.--The Secretary of the Treasury, the Securities 
        and Exchange Commission, and the Board of Governors of the 
        Federal Reserve System shall each submit a report to the 
        Congress describing its findings under this subsection and any 
        recommendations for legislation not later than 18 months after 
        the date of enactment of this Act.

SEC. 9. STUDY OF REGULATORY SYSTEM FOR GOVERNMENT SECURITIES.

    (a) Joint Study.--The Secretary of the Treasury, the Securities and 
Exchange Commission, and the Board of Governors of the Federal Reserve 
System shall--
            (1) evaluate the effectiveness of any rules promulgated or 
        amended after October 1, 1991, pursuant to section 15C of the 
        Securities Exchange Act of 1934 or any amendment made by this 
        title, and any national securities association rule changes 
        applicable principally to government securities transactions 
        approved after October 1, 1991, in carrying out the purposes of 
        such Act;
            (2) evaluate the effectiveness of surveillance and 
        enforcement with respect to government securities, and the 
        impact on such surveillance and enforcement of defects in any 
        available audit trails with respect to transactions in such 
        securities; and
            (3) submit to the Congress, not later than March 31, 1997, 
        any recommendations they may consider appropriate concerning--
                    (A) the regulation of government securities brokers 
                and government securities dealers,
                    (B) the dissemination of information concerning 
                quotations for and transactions in government 
                securities,
                    (C) the prevention of sales practice abuses in 
                connection with transactions in government securities, 
                and
                    (D) such other matters as they consider 
                appropriate.
    (b) GAO Study.--The Comptroller General shall--
            (1) conduct a study of the effectiveness of regulation of 
        government securities brokers and government securities dealers 
        pursuant to section 15C of the Securities Exchange Act of 1934 
        and the effectiveness of the amendments made by this title; and
            (2) submit to the Congress, not later than March 31, 1996, 
        the Comptroller General's recommendations for change, if any, 
        or such other recommendations as the Comptroller General 
        considers appropriate.

SEC. 10. TECHNICAL AMENDMENTS.

    (a) Amendments to Definitions.--Section 3(a) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended--
            (1) in paragraph (34)(G) (relating to the definition of 
        appropriate regulatory agency), by amending clauses (ii), 
        (iii), and (iv) to read as follows:
                            ``(ii) the Board of Governors of the 
                        Federal Reserve System, in the case of a State 
                        member bank of the Federal Reserve System, a 
                        foreign bank, an uninsured State branch or 
                        State agency of a foreign bank, a commercial 
                        lending company owned or controlled by a 
                        foreign bank (as such terms are used in the 
                        International Banking Act of 1978), or a 
                        corporation organized or having an agreement 
                        with the Board of Governors of the Federal 
                        Reserve System pursuant to section 25 or 
                        section 25A of the Federal Reserve Act;
                            ``(iii) the Federal Deposit Insurance 
                        Corporation, in the case of a bank insured by 
                        the Federal Deposit Insurance Corporation 
                        (other than a member of the Federal Reserve 
                        System or a Federal savings bank) or an insured 
                        State branch of a foreign bank (as such terms 
                        are used in the International Banking Act of 
                        1978);
                            ``(iv) the Director of the Office of Thrift 
                        Supervision, in the case of a savings 
                        association (as defined in section 3(b) of the 
                        Federal Deposit Insurance Act) the deposits of 
                        which are insured by the Federal Deposit 
                        Insurance Corporation;'';
            (2) by amending paragraph (46) (relating to the definition 
        of financial institution) to read as follows:
            ``(46) The term `financial institution' means--
                    ``(A) a bank (as defined in paragraph (6) of this 
                subsection);
                    ``(B) a foreign bank (as such term is used in the 
                International Banking Act of 1978); and
                    ``(C) a savings association (as defined in section 
                3(b) of the Federal Deposit Insurance Act) the deposits 
                of which are insured by the Federal Deposit Insurance 
                Corporation.''; and
            (3) by redesignating paragraph (51) (as added by section 
        204 of the International Securities Enforcement Cooperation 
        Act) as paragraph (52).
    (b) Effective Date of Broker/Dealer Registration.--
            (1) Government securities brokers and dealers.--Section 
        15C(a)(2)(ii) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78o-5(a)(2)(ii)) is amended by inserting before ``At the 
        conclusion'' the following: ``The order granting registration 
        shall not be effective until such government securities broker 
        or government securities dealer has become a member of a 
        national securities exchange registered under section 6 of this 
        title, or a securities association registered under section 15A 
        of this title, unless the Commission has exempted such 
        government securities broker or government securities dealer, 
        by rule or order, from such membership.''.
            (2) Other brokers and dealers.--Section 15(b)(1)(B) of such 
        Act (15 U.S.C. 78o(b)(1)(B)) is amended by inserting before 
        ``At the conclusion'' the following: ``The order granting 
        registration shall not be effective until such broker or dealer 
        has become a member of a registered securities association, or 
        until such broker or dealer has become a member of a national 
        securities exchange if such broker or dealer effects 
        transactions solely on that exchange, unless the Commission has 
        exempted such broker or dealer, by rule or order, from such 
        membership.''.

SEC. 11. OFFERINGS OF CERTAIN GOVERNMENT SECURITIES.

    Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) 
is amended by inserting after paragraph (6) of subsection (c) the 
following new paragraph:
            ``(7) In connection with any bid for or purchase of a 
        government security related to an offering of government 
        securities by or on behalf of an issuer, no government 
        securities broker, government securities dealer, or bidder for 
        or purchaser of securities in such offering shall knowingly or 
        willfully make any false or misleading written statement or 
        omit any fact necessary to make any written statement made not 
        misleading. For purposes of the preceding sentence, the term 
        `government security' shall not include any obligation subject 
        to the public debt limit established in section 3101 of title 
        31, United States Code.''.

SEC. 12. RULE OF CONSTRUCTION.

    (a) In General.--No provision of, or amendment made by, this title 
may be construed--
            (1) to apply to the initial issuance of any public debt 
        obligation, or
            (2) to grant any authority to (or extend any authority of) 
        the Securities and Exchange Commission--
                    (A) to prescribe any procedure, term, or condition 
                governing such initial issuance,
                    (B) to require any recordkeeping, or the furnishing 
                of any information, with respect to such initial 
                issuance, or
                    (C) to otherwise regulate in any manner such 
                initial issuance.
    (b) Public Debt Obligation.--For purposes of this section, the term 
``public debt obligation'' means an obligation subject to the public 
debt limit established in section 3101 of title 31, United States Code.

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