[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 422 Engrossed Amendment Senate (EAS)]

103d CONGRESS

  1st Session 

                                 S. 422

_______________________________________________________________________

                  SENATE AMENDMENT TO HOUSE AMENDMENTS
                  In the Senate of the United States,

                                               November 22, 1993, 1993.
      Resolved, That the Senate agree to the amendment of the House of 
Representatives to the bill (S. 422) entitled ``An Act to amend the 
Securities Exchange Act of 1934 to ensure the efficient and fair 
operation of the government securities market, in order to protect 
investors and facilitate government borrowing at the lowest possible 
cost to taxpayers, and to prevent false and misleading statements in 
connection with offerings of government securities'' with the following

                 SENATE AMENDMENT TO HOUSE AMENDMENTS:

            In lieu of the matter proposed to be inserted by the House 
      amendment to the text of the bill, insert:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Government 
Securities Act Amendments of 1993''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.

       TITLE I--AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934

Sec. 101. Findings.
Sec. 102. Extension of government securities rulemaking authority.
Sec. 103. Transaction records.
Sec. 104. Large position reporting.
Sec. 105. Authority of the Commission to regulate transactions in 
                            exempted securities.
Sec. 106. Sales practice rulemaking authority.
Sec. 107. Market information.
Sec. 108. Disclosure by government securities brokers and government 
                            securities dealers whose accounts are not 
                            insured by the Securities Investor 
                            Protection Corporation.
Sec. 109. Technical amendments.
Sec. 110. Offerings of certain government securities.
Sec. 111. Rule of construction.
Sec. 112. Study of regulatory system for government securities.

                    TITLE II--REPORTS ON PUBLIC DEBT

Sec. 201. Annual report on public debt.
Sec. 202. Treasury auction reforms.
Sec. 203. Notice on Treasury modifications to auction process.

                 TITLE III--LIMITED PARTNERSHIP ROLLUPS

Sec. 301. Short title.
Sec. 302. Revision of proxy solicitation rules with respect to limited 
                            partnership rollup transactions.
Sec. 303. Rules of fair practice in rollup transactions.
Sec. 304. Effective date; effect on existing authority.

       TITLE I--AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934

SEC. 101. FINDINGS.

    The Congress finds that--
            (1) the liquid and efficient operation of the government 
        securities market is essential to facilitate government 
        borrowing at the lowest possible cost to taxpayers;
            (2) the fair and honest treatment of investors will 
        strengthen the integrity and liquidity of the government 
        securities market;
            (3) rules promulgated by the Secretary of the Treasury 
        pursuant to the Government Securities Act of 1986 have worked 
        well to protect investors from unregulated dealers and maintain 
        the efficiency of the government securities market; and
            (4) extending the authority of the Secretary and providing 
        new authority will ensure the continued strength of the 
        government securities market.

SEC. 102. EXTENSION OF GOVERNMENT SECURITIES RULEMAKING AUTHORITY.

    Section 15C of the Securities Exchange Act of 1934 (15 U.S.C. 78o-
5) is amended by striking subsection (g).

SEC. 103. TRANSACTION RECORDS.

    (a) Amendment.--Section 15C(d) of the Securities Exchange Act of 
1934 (15 U.S.C. 78o-5(d)) is amended by adding at the end the following 
new paragraph:
    ``(3) Government Securities Trade Reconstruction.--
            ``(A) Furnishing records.--Every government securities 
        broker and government securities dealer shall furnish to the 
        Commission on request such records of government securities 
        transactions, including records of the date and time of 
        execution of trades, as the Commission may require to 
        reconstruct trading in the course of a particular inquiry or 
        investigation being conducted by the Commission for enforcement 
        or surveillance purposes. 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 
        notwithstanding any limitation in subparagraph (B). In 
        utilizing its authority to require information in machine 
        readable form, the Commission shall minimize the burden such 
        requirement may place on small government securities brokers 
        and dealers.
            ``(B) Limitation; construction.--The Commission shall not 
        utilize its authority under this paragraph to develop regular 
        reporting requirements, except that the Commission may require 
        information to be furnished under this paragraph as frequently 
        as necessary for particular inquiries or investigations for 
        enforcement or surveillance purposes. This paragraph shall not 
        be construed as requiring, or as authorizing the Commission to 
        require, any government securities broker or government 
        securities dealer to obtain or maintain any information for 
        purposes of this paragraph which is not otherwise maintained by 
        such broker or dealer in accordance with any other provision of 
        law or usual and customary business practice. The Commission 
        shall, where feasible, avoid requiring any information to be 
        furnished under this paragraph that the Commission may obtain 
        from the Federal Reserve Bank of New York.
            ``(C) Procedures for requiring information.--At the time 
        the Commission requests any information pursuant to 
        subparagraph (A) with respect to any government securities 
        broker or government securities dealer for which the Commission 
        is not the appropriate regulatory agency, the Commission shall 
        notify the appropriate regulatory agency for such government 
        securities broker or government securities dealer and, upon 
        request, furnish to the appropriate regulatory agency any 
        information supplied to the Commission.
            ``(D) Consultation.--Within 90 days after the date of 
        enactment of this paragraph, and annually thereafter, or upon 
        the request of any other appropriate regulatory agency, the 
        Commission shall consult with the other appropriate regulatory 
        agencies to determine the availability of records that may be 
        required to be furnished under this paragraph and, for those 
        records available directly from the other appropriate 
        regulatory agencies, to develop a procedure for furnishing such 
        records expeditiously upon the Commission's request.
            ``(E) Exclusion for examination reports.--Nothing in this 
        paragraph shall be construed so as to permit the Commission to 
        require any government securities broker or government 
        securities dealer to obtain, maintain, or furnish any 
        examination report of any appropriate regulatory agency other 
        than the Commission or any supervisory recommendations or 
        analysis contained in any such examination report.
            ``(F) Authority 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 or obtained under this 
        paragraph. Nothing in this paragraph 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 from 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 
        subparagraph shall be considered a statute described in 
        subsection (b)(3)(B) of such section 552.''.
    (b) Conforming Amendments.--(1) Section 15C(a)(4) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78o-5(a)(4)) is amended by inserting 
``, other than subsection (d)(3),'' after ``subsection (a), (b), or (d) 
of this section''.
    (2) Section 15C(f)(2) of such Act is amended--
            (A) in the first sentence, by inserting ``, other than 
        subsection (d)(3)'', after ``threatened violation of the 
        provisions of this section''; and
            (B) in the second sentence, by inserting ``(except 
        subsection (d)(3))'' after ``other than this section''.

SEC. 104. LARGE POSITION REPORTING.

    Section 15C of the Securities Exchange Act of 1934 (15 U.S.C. 78o-
5) is amended--
            (1) by redesignating subsection (f) as subsection (g); 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 and 
        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, taking into 
        account any impact of such rules on the efficiency and 
        liquidity of the Treasury securities market and the cost to 
        taxpayers of funding the Federal debt. Unless otherwise 
        specified by the Secretary, reports required under this 
        subsection shall be filed with the Federal Reserve Bank of New 
        York, acting as agent for the Secretary. Such reports shall, on 
        a timely basis, be provided directly to the Commission by the 
        person with whom they are filed.
            ``(2) 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.
            ``(3) 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.
            ``(4) 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, which shall 
                        be no less than the size that provides the 
                        potential for manipulation or control of the 
                        supply or price, or the cost of financing 
                        arrangements, of an issue or the portion 
                        thereof that is available for trading;
                            ``(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.
            ``(5) Exemptions.--Consistent with the public interest and 
        the protection of investors, the Secretary by rule or order may 
        exempt in whole or in part, conditionally or unconditionally, 
        any person or class or persons, or any transaction or class of 
        transactions, from the requirements of this subsection.
            ``(6) 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 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 from 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 paragraph 
        shall be considered a statute described in subsection (b)(3)(B) 
        of such section 552.''.

SEC. 105. 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 adding at the end the following:
    ``(E) The Commission shall, prior to adopting any rule or 
regulation under subparagraph (C), consult with and consider the views 
of the Secretary of the Treasury and each appropriate regulatory 
agency. If the Secretary of the Treasury or any appropriate regulatory 
agency 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. If the Secretary of the 
Treasury determines, and notifies the Commission, that such rule or 
regulation, if implemented, would, or as applied does (i) adversely 
affect the liquidity or efficiency of the market for government 
securities; or (ii) impose any burden on competition not necessary or 
appropriate in furtherance of the purposes of this section, the 
Commission shall, prior to adopting the proposed rule or regulation, 
find that such rule or regulation is necessary and appropriate in 
furtherance of the purposes of this section notwithstanding the 
Secretary's determination.''.
    (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 adding at the end the following:
    ``(E) The Commission shall, prior to adopting any rule or 
regulation under subparagraph (C), consult with and consider the views 
of the Secretary of the Treasury and each appropriate regulatory 
agency. If the Secretary of the Treasury or any appropriate regulatory 
agency 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. If the Secretary of the 
Treasury determines, and notifies the Commission, that such rule or 
regulation, if implemented, would, or as applied does (i) adversely 
affect the liquidity or efficiency of the market for government 
securities; or (ii) impose any burden on competition not necessary or 
appropriate in furtherance of the purposes of this section, the 
Commission shall, prior to adopting the proposed rule or regulation, 
find that such rule or regulation is necessary and appropriate in 
furtherance of the purposes of this section notwithstanding the 
Secretary's determination.''.

SEC. 106. 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)(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), 
the appropriate regulatory agency for such government securities broker 
or government securities dealer may issue such rules and regulations 
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. If the Secretary of 
the Treasury determines, and notifies the appropriate regulatory 
agency, that such rule or regulation, if implemented, would, or as 
applied does (i) adversely affect the liquidity or efficiency of the 
market for government securities; or (ii) impose any burden on 
competition not necessary or appropriate in furtherance of the purposes 
of this section, the appropriate regulatory agency shall, prior to 
adopting the proposed rule or regulation, find that such rule or 
regulation is necessary and appropriate in furtherance of the purposes 
of this section notwithstanding the Secretary's determination.
    ``(B) The appropriate regulatory agency shall consult with and 
consider the views of the Secretary prior to approving or amending a 
rule or regulation under this paragraph, except where the appropriate 
regulatory agency determines that an emergency exists requiring 
expeditious and summary action and publishes its reasons therefor. If 
the Secretary comments in writing to the appropriate regulatory agency 
on a proposed rule or regulation that has been published for comment, 
the appropriate regulatory agency shall respond in writing to such 
written comment before approving the proposed rule or regulation.
    ``(C) In promulgating rules under this section, the appropriate 
regulatory agency shall consider the sufficiency and appropriateness of 
then existing laws and rules applicable to government securities 
brokers, government securities dealers, and persons associated with 
government securities brokers and government securities dealers.''.
    (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) Conforming amendment.--
                    (A) Section 3(a)(12)(B)(ii) of such Act (15 U.S.C. 
                78c(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''.
    (c) Oversight of Registered Securities Associations.--Section 19 of 
the Securities Exchange Act of 1934 (15 U.S.C. 78s) is amended--
            (1) in subsection (b), by adding at the end the following 
        new paragraphs:
    ``(5) The Commission shall consult with and consider the views of 
the Secretary of the Treasury prior to approving a proposed rule 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 of 
the Treasury comments in writing to the Commission on a proposed rule 
that has been published for comment, the Commission shall respond in 
writing to such written comment before approving the proposed rule. If 
the Secretary of the Treasury determines, and notifies the Commission, 
that such rule, if implemented, would, or as applied does (i) adversely 
affect the liquidity or efficiency of the market for government 
securities; or (ii) impose any burden on competition not necessary or 
appropriate in furtherance of the purposes of this section, the 
Commission shall, prior to adopting the proposed rule, find that such 
rule is necessary and appropriate in furtherance of the purposes of 
this section notwithstanding the Secretary's determination.
    ``(6) In approving rules described in paragraph (5), the Commission 
shall consider the sufficiency and appropriateness of then existing 
laws and rules applicable to government securities brokers, government 
securities dealers, and persons associated with government securities 
brokers and government securities dealers.''; and
            (2) in subsection (c), by adding at the end the following 
        new paragraph:
    ``(5) With respect to rules described in subsection (b)(5), the 
Commission shall consult with and consider the views of the Secretary 
of the Treasury before abrogating, adding to, and deleting from such 
rules, except where the Commission determines that an emergency exists 
requiring expeditious or summary action and publishes its reasons 
therefor.''.

SEC. 107. MARKET INFORMATION.

    Section 23(b)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 
78w) is amended--
            (1) by striking subparagraphs (C), (D), and (H);
            (2) by redesignating subparagraphs (E), (F), and (G) as 
        subparagraphs (C), (D), and (E), respectively;
            (3) by redesignating subparagraphs (I), (J), and (K) as 
        subparagraphs (F), (G), and (H), respectively;
            (4) by striking ``and'' at the end of such redesignated 
        subparagraph (G);
            (5) by striking the period at the end of such redesignated 
        subparagraph (H) and inserting ``; and''; and
            (6) by inserting after such redesignated subparagraph (H) 
        the following new subparagraph:
            ``(I) the steps that have been taken and the progress that 
        has been made in promoting the timely public dissemination and 
        availability for analytical purposes (on a fair, reasonable, 
        and nondiscriminatory basis) of information concerning 
        government securities transactions and quotations, and its 
        recommendations, if any, for legislation to assure timely 
        dissemination of (i) information on transactions in regularly 
        traded government securities sufficient to permit the 
        determination of the prevailing market price for such 
        securities, and (ii) reports of the highest published bids and 
        lowest published offers for government securities (including 
        the size at which persons are willing to trade with respect to 
        such bids and offers).''.

SEC. 108. DISCLOSURE BY GOVERNMENT SECURITIES BROKERS AND GOVERNMENT 
              SECURITIES DEALERS WHOSE ACCOUNTS ARE NOT INSURED BY THE 
              SECURITIES INVESTOR PROTECTION CORPORATION.

    Section 15C(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78o-5(a)) is amended--
            (1) by redesignating paragraph (4) as paragraph (5); and
            (2) by inserting after paragraph (3) the following:
    ``(4) No government securities broker or government securities 
dealer that is required to register under paragraph (1)(A) and that is 
not a member of the Securities Investor Protection Corporation shall 
effect any transaction in any security in contravention of such rules 
as the Commission shall prescribe pursuant to this subsection to assure 
that its customers receive complete, accurate, and timely disclosure of 
the inapplicability of Securities Investor Protection Corporation 
coverage to their accounts.''.

SEC. 109. 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 
        of 1990) 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 ``The 
        Commission may extend'' 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 
        ``The Commission may extend'' 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.''.
    (c) Information Sharing.--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. 110. OFFERINGS OF CERTAIN GOVERNMENT SECURITIES.

    Section 15(c) of the Securities Exchange Act of 1934 (15 U.S.C. 
78o(c)) is amended by adding at the end 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.''.

SEC. 111. RULE OF CONSTRUCTION.

    (a) In General.--No provision of, or amendment made by, this title 
may be construed--
            (1) to govern 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, any appropriate 
        regulatory agency, or a self-regulatory organization--
                    (A) to prescribe any procedure, term, or condition 
                of such initial issuance,
                    (B) to promulgate any rule or regulation governing 
                such initial issuance, or
                    (C) to otherwise regulate in any manner such 
                initial issuance.
    (b) Exception.--Subsection (a) of this section shall not apply to 
the amendment made by section 110 of this Act.
    (c) 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.

SEC. 112. 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) with respect to 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--
                    (A) evaluate the effectiveness of such rules in 
                carrying out the purposes of such Act; and
                    (B) evaluate the impact of any such rules on the 
                efficiency and liquidity of the government securities 
                market and the cost of funding the Federal debt;
            (2) evaluate the effectiveness of surveillance and 
        enforcement with respect to government securities, and the 
        impact on such surveillance and enforcement of the availability 
        of automated, time-sequenced records of essential information 
        pertaining to trades in such securities; and
            (3) submit to the Congress, not later than March 31, 1998, 
        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) Treasury Study.--The Secretary of the Treasury, in consultation 
with the Securities and Exchange Commission, shall--
            (1) conduct a study of--
                    (A) the identity and nature of the business of 
                government securities brokers and government securities 
                dealers that are registered with the Securities and 
                Exchange Commission under section 15C of the Securities 
                Exchange Act of 1934; and
                    (B) the continuing need for, and regulatory and 
                financial consequences of, a separate regulatory system 
                for such government securities brokers and government 
                securities dealers; and
            (2) submit to the Congress, not later than 18 months after 
        the date of enactment of this Act, the Secretary's 
        recommendations for change, if any, or such other 
        recommendations as the Secretary considers appropriate.

                    TITLE II--REPORTS ON PUBLIC DEBT

SEC. 201. ANNUAL REPORT ON PUBLIC DEBT.

    (a) General Rule.--Subchapter II of chapter 31 of title 31, United 
States Code, is amended by adding at the end the following new section:
``Sec. 3130. Annual public debt report
    ``(a) General Rule.--On or before June 1 of each calendar year 
after 1993, the Secretary of the Treasury shall submit a report to the 
Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate on--
            ``(1) the Treasury's public debt activities, and
            ``(2) the operations of the Federal Financing Bank.
    ``(b) Required Information on Public Debt Activities.--Each report 
submitted under subsection (a) shall include the following information:
            ``(1) A table showing the following information with 
        respect to the total public debt:
                    ``(A) The past levels of such debt and the 
                projected levels of such debt as of the close of the 
                current fiscal year and as of the close of the next 5 
                fiscal years under the most recent current services 
                baseline projection of the executive branch.
                    ``(B) The past debt to GDP ratios and the projected 
                debt to GDP ratios as of the close of the current 
                fiscal year and as of the close of the next 5 fiscal 
                years under such most recent current services baseline 
                projection.
            ``(2) A table showing the following information with 
        respect to the net public debt:
                    ``(A) The past levels of such debt and the 
                projected levels of such debt as of the close of the 
                current fiscal year and as of the close of the next 5 
                fiscal years under the most recent current services 
                baseline projection of the executive branch.
                    ``(B) The past debt to GDP ratios and the projected 
                debt to GDP ratios as of the close of the current 
                fiscal year and as of the close of the next 5 fiscal 
                years under such most recent current services baseline 
                projection.
                    ``(C) The interest cost on such debt for prior 
                fiscal years and the projected interest cost on such 
                debt for the current fiscal year and for the next 5 
                fiscal years under such most recent current services 
                baseline projection.
                    ``(D) The interest cost to outlay ratios for prior 
                fiscal years and the projected interest cost to outlay 
                ratios for the current fiscal year and for the next 5 
                fiscal years under such most recent current services 
                baseline projection.
            ``(3) A table showing the maturity distribution of the net 
        public debt as of the time the report is submitted and for 
        prior years, and an explanation of the overall financing 
        strategy used in determining the distribution of maturities 
        when issuing public debt obligations, including a discussion of 
        the projections and assumptions with respect to the structure 
        of interest rates for the current fiscal year and for the 
        succeeding 5 fiscal years.
            ``(4) A table showing the following information as of the 
        time the report is submitted and for prior years:
                    ``(A) A description of the various categories of 
                the holders of public debt obligations.
                    ``(B) The portions of the total public debt held by 
                each of such categories.
            ``(5) A table showing the relationship of federally 
        assisted borrowing to total Federal borrowing as of the time 
        the report is submitted and for prior years.
            ``(6) A table showing the annual principal and interest 
        payments which would be required to amortize in equal annual 
        payments the level (as of the time the report is submitted) of 
        the net public debt over the longest remaining term to maturity 
        of any obligation which is a part of such debt.
    ``(c) Required Information on Federal Financing Bank.--Each report 
submitted under subsection (a) shall include (but not be limited to) 
information on the financial operations of the Federal Financing Bank, 
including loan payments and prepayments, and on the levels and 
categories of the lending activities of the Federal Financing Bank, for 
the current fiscal year and for prior fiscal years.
    ``(d) Recommendations.--The Secretary of the Treasury may include 
in any report submitted under subsection (a) such recommendations to 
improve the issuance and sale of public debt obligations (and with 
respect to other matters) as he may deem advisable.
    ``(e) Definitions.--For purposes of this section--
            ``(1) Current fiscal year.--The term `current fiscal year' 
        means the fiscal year ending in the calendar year in which the 
        report is submitted.
            ``(2) Total public debt.--The term `total public debt' 
        means the total amount of the obligations subject to the public 
        debt limit established in section 3101 of this title.
            ``(3) Net public debt.--The term `net public debt' means 
        the portion of the total public debt which is held by the 
        public.
            ``(4) Debt to gdp ratio.--The term `debt to GDP ratio' 
        means the percentage obtained by dividing the level of the 
        total public debt or net public debt, as the case may be, by 
        the gross domestic product.
            ``(5) Interest cost to outlay ratio.--The term `interest 
        cost to outlay ratio' means, with respect to any fiscal year, 
        the percentage obtained by dividing the interest cost for such 
        fiscal year on the net public debt by the total amount of 
        Federal outlays for such fiscal year.''.
    (b) Clerical Amendment.--The analysis for subchapter II of chapter 
31 of title 31, United States Code, is amended by adding at the end the 
following new item:

``3130. Annual public debt report.''.

SEC. 202. TREASURY AUCTION REFORMS.

    (a) Ability to Submit Computer Tenders in Treasury Auctions.--By 
the end of 1995, any bidder shall be permitted to submit a computer-
generated tender to any automated auction system established by the 
Secretary of the Treasury for the sale upon issuance of securities 
issued by the Secretary if the bidder--
            (1) meets the minimum creditworthiness standard established 
        by the Secretary; and
            (2) agrees to comply with regulations and procedures 
        applicable to the automated system and the sale upon issuance 
        of securities issued by the Secretary.
    (b) Prohibition on Favored Players.--
            (1) In general.--No government securities broker or 
        government securities dealer may receive any advantage, 
        favorable treatment, or other benefit, in connection with the 
        purchase upon issuance of securities issued by the Secretary of 
        the Treasury, which is not generally available to other 
        government securities brokers or government securities dealers 
        under the regulations governing the sale upon issuance of 
        securities issued by the Secretary of the Treasury.
            (2) Exception.--
                    (A) In general.--The Secretary of the Treasury may 
                grant an exception to the application of paragraph (1) 
                if--
                            (i) the Secretary determines that any 
                        advantage, favorable treatment, or other 
                        benefit referred to in such paragraph is 
                        necessary and appropriate and in the public 
                        interest; and
                            (ii) the grant of the exception is designed 
                        to minimize any anticompetitive effect.
                    (B) Annual report.--The Secretary of the Treasury 
                shall submit an annual report to the Congress 
                describing any exception granted by the Secretary under 
                subparagraph (A) during the year covered by the report 
                and the basis upon which the exception was granted.
    (c) Meetings of Treasury Borrowing Advisory Committee.--
            (1) Open meetings.--
                    (A) In general.--Except as provided in subparagraph 
                (B), any meeting of the Treasury Borrowing Advisory 
                Committee of the Public Securities Association 
                (hereafter in this subsection referred to as the 
                ``advisory committee''), or any successor to the 
                advisory committee, shall be open to the public.
                    (B) Exception.--Subparagraph (A) shall not apply 
                with respect to any part of any meeting of the advisory 
                committee in which the advisory committee--
                            (i) discusses and debates the issues 
                        presented to the advisory committee by the 
                        Secretary of the Treasury; or
                            (ii) makes recommendations to the 
                        Secretary.
            (2) Minutes of each meeting.--The detailed minutes required 
        to be maintained under section 10(c) of the Federal Advisory 
        Committee Act for any meeting by the advisory committee shall 
        be made available to the public within 3 business days of the 
        date of the meeting.
            (3) Prohibition on receipt of gratuities or expenses by any 
        officer or employee of the board or department.--In connection 
        with any meeting of the advisory committee, no officer or 
        employee of the Department of the Treasury, the Board of 
        Governors of the Federal Reserve System, or any Federal reserve 
        bank may accept any gratuity, consideration, expense of any 
        sort, or any other thing of value from any advisory committee 
        described in subsection (c), any member of such committee, or 
        any other person.
            (4) Prohibition on outside discussions.--
                    (A) In general.--Subject to subparagraph (B), a 
                member of the advisory committee may not discuss any 
                part of any discussion, debate, or recommendation at a 
                meeting of the advisory committee which occurs while 
                such meeting is closed to the public (in accordance 
                with paragraph (1)(B)) with, or disclose the contents 
                of such discussion, debate, or recommendation to, 
                anyone other than--
                            (i) another member of the advisory 
                        committee who is present at the meeting; or
                            (ii) an officer or employee of the 
                        Department of the Treasury.
                    (B) Applicable period of prohibition.--The 
                prohibition contained in subparagraph (A) on 
                discussions and disclosures of any discussion, debate, 
                or recommendation at a meeting of the advisory 
                committee shall cease to apply--
                            (i) with respect to any discussion, debate, 
                        or recommendation which relates to the 
                        securities to be auctioned in a midquarter 
                        refunding by the Secretary of the Treasury, at 
                        the time the Secretary makes a public 
                        announcement of the refunding; and
                            (ii) with respect to any other discussion, 
                        debate, or recommendation at the meeting, at 
                        the time the Secretary releases the minutes of 
                        the meeting in accordance with paragraph (2).
                    (C) Removal from advisory committee for violations 
                of this paragraph.--In addition to any penalty or 
                enforcement action to which a person who violates a 
                provision of this paragraph may be subject under any 
                other provision of law, the Secretary of the Treasury 
                shall--
                            (i) remove a member of the advisory 
                        committee who violates a provision of this 
                        paragraph from the advisory committee and 
                        permanently bar such person from serving as a 
                        member of the advisory committee; and
                            (ii) prohibit any director, officer, or 
                        employee of the firm of which the member 
                        referred to in clause (i) is a director, 
                        officer, or employee (at the time the member is 
                        removed from the advisory committee) from 
                        serving as a member of the advisory committee 
                        at any time during the 5-year period beginning 
                        on the date of such removal.
    (d) Report to Congress.--
            (1) Report required.--The Secretary of the Treasury shall 
        submit an annual report to the Congress containing the 
        following information with respect to material violations or 
        suspected material violations of regulations of the Secretary 
        relating to auctions and other offerings of securities upon the 
        issuance of such securities by the Secretary:
                    (A) The number of inquiries begun by the Secretary 
                during the year covered by the report regarding such 
                material violations or suspected material violations by 
                any participant in the auction system or any director, 
                officer, or employee of any such participant and the 
                number of inquiries regarding any such violations or 
                suspected violations which remained open at the end of 
                such year.
                    (B) A brief description of the nature of the 
                violations.
                    (C) A brief description of any action taken by the 
                Secretary during such year with respect to any such 
                violation, including any referrals made to the Attorney 
                General, the Securities and Exchange Commission, any 
                other law enforcement agency, and any Federal banking 
                agency (as defined in section 3 of the Federal Deposit 
                Insurance Act).
            (2) Delay in disclosure of information in certain cases.--
        The Secretary of the Treasury shall not be required to include 
        in a report under paragraph (1) any information the disclosure 
        of which could jeopardize an investigation by an agency 
        described in paragraph (1)(C) for so long as such disclosure 
        could jeopardize the investigation.

SEC. 203. NOTICE ON TREASURY MODIFICATIONS TO AUCTION PROCESS.

    The Secretary of the Treasury shall notify the Congress of any 
significant modifications to the auction process for issuing United 
States Treasury obligations at the time such modifications are 
implemented.

                 TITLE III--LIMITED PARTNERSHIP ROLLUPS

SEC. 301. SHORT TITLE.

    This title may be cited as the ``Limited Partnership Rollup Reform 
Act of 1993''.

SEC. 302. REVISION OF PROXY SOLICITATION RULES WITH RESPECT TO LIMITED 
              PARTNERSHIP ROLLUP TRANSACTIONS.

    (a) Amendment.--Section 14 of the Securities Exchange Act of 1934 
(15 U.S.C. 78n) is amended by adding at the end the following new 
subsection:
    ``(h) Proxy Solicitations and Tender Offers in Connection With 
Limited Partnership Rollup Transactions.--
            ``(1) Proxy rules to contain special provisions.--It shall 
        be unlawful for any person to solicit any proxy, consent, or 
        authorization concerning a limited partnership rollup 
        transaction, or to make any tender offer in furtherance of a 
        limited partnership rollup transaction, unless such transaction 
        is conducted in accordance with rules prescribed by the 
        Commission under subsections (a) and (d) as required by this 
        subsection. Such rules shall--
                    ``(A) permit any holder of a security that is the 
                subject of the proposed limited partnership rollup 
                transaction to engage in preliminary communications for 
                the purpose of determining whether to solicit proxies, 
                consents, or authorizations in opposition to the 
                proposed limited partnership rollup transaction, 
                without regard to whether any such communication would 
                otherwise be considered a solicitation of proxies, and 
                without being required to file soliciting material with 
                the Commission prior to making that determination, 
                except that--
                            ``(i) nothing in this subparagraph shall be 
                        construed to limit the application of any 
                        provision of this title prohibiting, or 
                        reasonably designed to prevent, fraudulent, 
                        deceptive, or manipulative acts or practices 
                        under this title; and
                            ``(ii) any holder of not less than 5 
                        percent of the outstanding securities that are 
                        the subject of the proposed limited partnership 
                        rollup transaction who engages in the business 
                        of buying and selling limited partnership 
                        interests in the secondary market shall be 
                        required to disclose such ownership interests 
                        and any potential conflicts of interests in 
                        such preliminary communications;
                    ``(B) require the issuer to provide to holders of 
                the securities that are the subject of the limited 
                partnership rollup transaction such list of the holders 
                of the issuer's securities as the Commission may 
                determine in such form and subject to such terms and 
                conditions as the Commission may specify;
                    ``(C) prohibit compensating any person soliciting 
                proxies, consents, or authorizations directly from 
                security holders concerning such a limited partnership 
                rollup transaction--
                            ``(i) on the basis of whether the solicited 
                        proxy, consent, or authorization either 
                        approves or disapproves the proposed limited 
                        partnership rollup transaction; or
                            ``(ii) contingent on the approval, 
                        disapproval, or completion of the limited 
                        partnership rollup transaction;
                    ``(D) set forth disclosure requirements for 
                soliciting material distributed in connection with a 
                limited partnership rollup transaction, including 
                requirements for clear, concise, and comprehensible 
                disclosure with respect to--
                            ``(i) any changes in the business plan, 
                        voting rights, form of ownership interest, or 
                        the compensation of the general partner in the 
                        proposed limited partnership rollup transaction 
                        from each of the original limited partnerships;
                            ``(ii) the conflicts of interest, if any, 
                        of the general partner;
                            ``(iii) whether it is expected that there 
                        will be a significant difference between the 
                        exchange values of the limited partnerships and 
                        the trading price of the securities to be 
                        issued in the limited partnership rollup 
                        transaction;
                            ``(iv) the valuation of the limited 
                        partnerships and the method used to determine 
                        the value of the interests of the limited 
                        partners to be exchanged for the securities in 
                        the limited partnership rollup transaction;
                            ``(v) the differing risks and effects of 
                        the limited partnership rollup transaction for 
                        investors in different limited partnerships 
                        proposed to be included, and the risks and 
                        effects of completing the limited partnership 
                        rollup transaction with less than all limited 
                        partnerships;
                            ``(vi) the statement by the general partner 
                        required under subparagraph (E);
                            ``(vii) such other matters deemed necessary 
                        or appropriate by the Commission;
                    ``(E) require a statement by the general partner as 
                to whether the proposed limited partnership rollup 
                transaction is fair or unfair to investors in each 
                limited partnership, a discussion of the basis for that 
                conclusion, and an evaluation and a description by the 
                general partner of alternatives to the limited 
                partnership rollup transaction, such as liquidation;
                    ``(F) provide that, if the general partner or 
                sponsor has obtained any opinion (other than an opinion 
                of counsel), appraisal, or report that is prepared by 
                an outside party and that is materially related to the 
                limited partnership rollup transaction, such soliciting 
                materials shall contain or be accompanied by clear, 
                concise, and comprehensible disclosure with respect 
                to--
                            ``(i) the analysis of the transaction, 
                        scope of review, preparation of the opinion, 
                        and basis for and methods of arriving at 
                        conclusions, and any representations and 
                        undertakings with respect thereto;
                            ``(ii) the identity and qualifications of 
                        the person who prepared the opinion, the method 
                        of selection of such person, and any material 
                        past, existing, or contemplated relationships 
                        between the person or any of its affiliates and 
                        the general partner, sponsor, successor, or any 
                        other affiliate;
                            ``(iii) any compensation of the preparer of 
                        such opinion, appraisal, or report that is 
                        contingent on the transaction's approval or 
                        completion; and
                            ``(iv) any limitations imposed by the 
                        issuer on the access afforded to such preparer 
                        to the issuer's personnel, premises, and 
                        relevant books and records;
                    ``(G) provide that, if the general partner or 
                sponsor has obtained any opinion, appraisal, or report 
                as described in subparagraph (F) from any person whose 
                compensation is contingent on the transaction's 
                approval or completion or who has not been given access 
                by the issuer to its personnel and premises and 
                relevant books and records, the general partner or 
                sponsor shall state the reasons therefor;
                    ``(H) provide that, if the general partner or 
                sponsor has not obtained any opinion on the fairness of 
                the proposed limited partnership rollup transaction to 
                investors in each of the affected partnerships, such 
                soliciting materials shall contain or be accompanied by 
                a statement of such partner's or sponsor's reasons for 
                concluding that such an opinion is not necessary in 
                order to permit the limited partners to make an 
                informed decision on the proposed transaction;
                    ``(I) require that the soliciting material include 
                a clear, concise, and comprehensible summary of the 
                limited partnership rollup transaction (including a 
                summary of the matters referred to in clauses (i) 
                through (vii) of subparagraph (D) and a summary of the 
                matter referred to in subparagraphs (F), (G), and (H)), 
                with the risks of the limited partnership rollup 
                transaction set forth prominently in the fore part 
                thereof;
                    ``(J) provide that any solicitation or offering 
                period with respect to any proxy solicitation, tender 
                offer, or information statement in a limited 
                partnership rollup transaction shall be for not less 
                than the lesser of 60 calendar days or the maximum 
                number of days permitted under applicable State law; 
                and
                    ``(K) contain such other provisions as the 
                Commission determines to be necessary or appropriate 
                for the protection of investors in limited partnership 
                rollup transactions.
            ``(2) Exemptions.--The Commission may, consistent with the 
        public interest, the protection of investors, and the purposes 
        of this title, exempt by rule or order any security or class of 
        securities, any transaction or class of transactions, or any 
        person or class of persons, in whole or in part, conditionally 
        or unconditionally, from the requirements imposed pursuant to 
        paragraph (1) or from the definition contained in paragraph 
        (4).
            ``(3) Effect on commission authority.--Nothing in this 
        subsection limits the authority of the Commission under 
        subsection (a) or (d) or any other provision of this title or 
        precludes the Commission from imposing, under subsection (a) or 
        (d) or any other provision of this title, a remedy or procedure 
        required to be imposed under this subsection.
            ``(4) Definition of limited partnership rollup 
        transaction.--Except as provided in paragraph (5), as used in 
        this subsection, the term `limited partnership rollup 
        transaction' means a transaction involving the combination or 
        reorganization of one or more limited partnerships, directly or 
        indirectly, in which--
                    ``(A) some or all of the investors in any of such 
                limited partnerships will receive new securities, or 
                securities in another entity, that will be reported 
                under a transaction reporting plan declared effective 
                before the date of enactment of this subsection by the 
                Commission under section 11A;
                    ``(B) any of the investors' limited partnership 
                securities are not, as of the date of filing, reported 
                under a transaction reporting plan declared effective 
                before the date of enactment of this subsection by the 
                Commission under section 11A;
                    ``(C) investors in any of the limited partnerships 
                involved in the transaction are subject to a 
                significant adverse change with respect to voting 
                rights, the term of existence of the entity, management 
                compensation, or investment objectives; and
                    ``(D) any of such investors are not provided an 
                option to receive or retain a security under 
                substantially the same terms and conditions as the 
                original issue.
            ``(5) Exclusions from definition.--Notwithstanding 
        paragraph (4), the term `limited partnership rollup 
        transaction' does not include--
                    ``(A) a transaction that involves only a limited 
                partnership or partnerships having an operating policy 
                or practice of retaining cash available for 
                distribution and reinvesting proceeds from the sale, 
                financing, or refinancing of assets in accordance with 
                such criteria as the Commission determines appropriate;
                    ``(B) a transaction involving only limited 
                partnerships wherein the interests of the limited 
                partners are repurchased, recalled, or exchanged in 
                accordance with the terms of the preexisting limited 
                partnership agreements for securities in an operating 
                company specifically identified at the time of the 
                formation of the original limited partnership;
                    ``(C) a transaction in which the securities to be 
                issued or exchanged are not required to be and are not 
                registered under the Securities Act of 1933;
                    ``(D) a transaction that involves only issuers that 
                are not required to register or report under section 
                12, both before and after the transaction;
                    ``(E) a transaction, except as the Commission may 
                otherwise provide by rule for the protection of 
                investors, involving the combination or reorganization 
                of one or more limited partnerships in which a non-
                affiliated party succeeds to the interests of a general 
                partner or sponsor, if--
                            ``(i) such action is approved by not less 
                        than 66\2/3\ percent of the outstanding units 
                        of each of the participating limited 
                        partnerships; and
                            ``(ii) as a result of the transaction, the 
                        existing general partners will receive only 
                        compensation to which they are entitled as 
                        expressly provided for in the preexisting 
                        limited partnership agreements; or
                    ``(F) a transaction, except as the Commission may 
                otherwise provide by rule for the protection of 
                investors, in which the securities offered to investors 
                are securities of another entity that are reported 
                under a transaction reporting plan declared effective 
                before the date of enactment of this subsection by the 
                Commission under section 11A, if--
                            ``(i) such other entity was formed, and 
                        such class of securities was reported and 
                        regularly traded, not less than 12 months 
                        before the date on which soliciting material is 
                        mailed to investors; and
                            ``(ii) the securities of that entity issued 
                        to investors in the transaction do not exceed 
                        20 percent of the total outstanding securities 
                        of the entity, exclusive of any securities of 
                        such class held by or for the account of the 
                        entity or a subsidiary of the entity.''.
    (b) Schedule for Regulations.--The Securities and Exchange 
Commission shall conduct rulemaking proceedings and prescribe final 
regulations under the Securities Act of 1933 and the Securities 
Exchange Act of 1934 to implement the requirements of section 14(h) of 
the Securities Exchange Act of 1934, as amended by subsection (a), and 
such regulations shall become effective not later than 12 months after 
the date of enactment of this Act.
    (c) Evaluation of Fairness Opinion Preparation, Disclosure, and 
Use.--
            (1) Evaluation required.--The Comptroller General of the 
        United States shall, within 18 months after the date of 
        enactment of this Act, conduct a study of--
                    (A) the use of fairness opinions in limited 
                partnership rollup transactions;
                    (B) the standards which preparers use in making 
                determinations of fairness;
                    (C) the scope of review, quality of analysis, 
                qualifications and methods of selection of preparers, 
                costs of preparation, and any limitations imposed by 
                issuers on such preparers;
                    (D) the nature and quality of disclosures provided 
                with respect to such opinions;
                    (E) any conflicts of interest with respect to the 
                preparation of such opinions; and
                    (F) the usefulness of such opinions to limited 
                partners.
            (2) Report required.--Not later than the end of the 18-
        month period referred to in paragraph (1), the Comptroller 
        General of the United States shall submit to the Congress a 
        report on the evaluation required by paragraph (1).

SEC. 303. RULES OF FAIR PRACTICE IN ROLLUP TRANSACTIONS.

    (a) Registered Securities Association Rule.--Section 15A(b) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o-3(b)) is amended by 
adding at the end the following new paragraph:
            ``(12) The rules of the association to promote just and 
        equitable principles of trade, as required by paragraph (6), 
        include rules to prevent members of the association from 
        participating in any limited partnership rollup transaction (as 
        such term is defined in paragraphs (4) and (5) of section 
        14(h)) unless such transaction was conducted in accordance with 
        procedures designed to protect the rights of limited partners, 
        including--
                    ``(A) the right of dissenting limited partners to 
                one of the following:
                            ``(i) an appraisal and compensation;
                            ``(ii) retention of a security under 
                        substantially the same terms and conditions as 
                        the original issue;
                            ``(iii) approval of the limited partnership 
                        rollup transaction by not less than 75 percent 
                        of the outstanding securities of each of the 
                        participating limited partnerships;
                            ``(iv) the use of a committee that is 
                        independent, as determined in accordance with 
                        rules prescribed by the association, of the 
                        general partner or sponsor, that has been 
                        approved by a majority of the outstanding 
                        securities of each of the participating 
                        partnerships, and that has such authority as is 
                        necessary to protect the interest of limited 
                        partners, including the authority to hire 
                        independent advisors, to negotiate with the 
                        general partner or sponsor on behalf of the 
                        limited partners, and to make a recommendation 
                        to the limited partners with respect to the 
                        proposed transaction; or
                            ``(v) other comparable rights that are 
                        prescribed by rule by the association and that 
                        are designed to protect dissenting limited 
                        partners;
                    ``(B) the right not to have their voting power 
                unfairly reduced or abridged;
                    ``(C) the right not to bear an unfair portion of 
                the costs of a proposed limited partnership rollup 
                transaction that is rejected; and
                    ``(D) restrictions on the conversion of contingent 
                interests or fees into non-contingent interests or fees 
                and restrictions on the receipt of a non-contingent 
                equity interest in exchange for fees for services which 
                have not yet been provided.
        As used in this paragraph, the term `dissenting limited 
        partner' means a person who, on the date on which soliciting 
        material is mailed to investors, is a holder of a beneficial 
        interest in a limited partnership that is the subject of a 
        limited partnership rollup transaction, and who casts a vote 
        against the transaction and complies with procedures 
        established by the association, except that for purposes of an 
        exchange or tender offer, such person shall file an objection 
        in writing under the rules of the association during the period 
        in which the offer is outstanding.''.
    (b) Listing Standards of National Securities Exchanges.--Section 
6(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78f(b)) is 
amended by adding at the end the following:
            ``(9) The rules of the exchange prohibit the listing of any 
        security issued in a limited partnership rollup transaction (as 
        such term is defined in paragraphs (4) and (5) of section 
        14(h)), unless such transaction was conducted in accordance 
        with procedures designed to protect the rights of limited 
        partners, including--
                    ``(A) the right of dissenting limited partners to 
                one of the following:
                            ``(i) an appraisal and compensation;
                            ``(ii) retention of a security under 
                        substantially the same terms and conditions as 
                        the original issue;
                            ``(iii) approval of the limited partnership 
                        rollup transaction by not less than 75 percent 
                        of the outstanding securities of each of the 
                        participating limited partnerships;
                            ``(iv) the use of a committee of limited 
                        partners that is independent, as determined in 
                        accordance with rules prescribed by the 
                        exchange, of the general partner or sponsor, 
                        that has been approved by a majority of the 
                        outstanding units of each of the participating 
                        limited partnerships, and that has such 
                        authority as is necessary to protect the 
                        interest of limited partners, including the 
                        authority to hire independent advisors, to 
                        negotiate with the general partner or sponsor 
                        on behalf of the limited partners, and to make 
                        a recommendation to the limited partners with 
                        respect to the proposed transaction; or
                            ``(v) other comparable rights that are 
                        prescribed by rule by the exchange and that are 
                        designed to protect dissenting limited 
                        partners;
                    ``(B) the right not to have their voting power 
                unfairly reduced or abridged;
                    ``(C) the right not to bear an unfair portion of 
                the costs of a proposed limited partnership rollup 
                transaction that is rejected; and
                    ``(D) restrictions on the conversion of contingent 
                interests or fees into non-contingent interests or fees 
                and restrictions on the receipt of a non-contingent 
                equity interest in exchange for fees for services which 
                have not yet been provided.
        As used in this paragraph, the term `dissenting limited 
        partner' means a person who, on the date on which soliciting 
        material is mailed to investors, is a holder of a beneficial 
        interest in a limited partnership that is the subject of a 
        limited partnership rollup transaction, and who casts a vote 
        against the transaction and complies with procedures 
        established by the exchange, except that for purposes of an 
        exchange or tender offer, such person shall file an objection 
        in writing under the rules of the exchange during the period 
        during which the offer is outstanding.''.
    (c) Standards for Automated Quotation Systems.--Section 15A(b) of 
the Securities Exchange Act of 1934 (15 U.S.C. 78o-3(b)) is amended by 
adding at the end the following new paragraph:
            ``(13) The rules of the association prohibit the 
        authorization for quotation on an automated interdealer 
        quotation system sponsored by the association of any security 
        designated by the Commission as a national market system 
        security resulting from a limited partnership rollup 
        transaction (as such term is defined in paragraphs (4) and (5) 
        of section 14(h)), unless such transaction was conducted in 
        accordance with procedures designed to protect the rights of 
        limited partners, including--
                    ``(A) the right of dissenting limited partners to 
                one of the following:
                            ``(i) an appraisal and compensation;
                            ``(ii) retention of a security under 
                        substantially the same terms and conditions as 
                        the original issue;
                            ``(iii) approval of the limited partnership 
                        rollup transaction by not less than 75 percent 
                        of the outstanding securities of each of the 
                        participating limited partnerships;
                            ``(iv) the use of a committee that is 
                        independent, as determined in accordance with 
                        rules prescribed by the association, of the 
                        general partner or sponsor, that has been 
                        approved by a majority of the outstanding 
                        securities of each of the participating 
                        partnerships, and that has such authority as is 
                        necessary to protect the interest of limited 
                        partners, including the authority to hire 
                        independent advisors, to negotiate with the 
                        general partner or sponsor on behalf of the 
                        limited partners, and to make a recommendation 
                        to the limited partners with respect to the 
                        proposed transaction; or
                            ``(v) other comparable rights that are 
                        prescribed by rule by the association and that 
                        are designed to protect dissenting limited 
                        partners;
                    ``(B) the right not to have their voting power 
                unfairly reduced or abridged;
                    ``(C) the right not to bear an unfair portion of 
                the costs of a proposed limited partnership rollup 
                transaction that is rejected; and
                    ``(D) restrictions on the conversion of contingent 
                interests or fees into non-contingent interests or fees 
                and restrictions on the receipt of a non-contingent 
                equity interest in exchange for fees for services which 
                have not yet been provided.
        As used in this paragraph, the term `dissenting limited 
        partner' means a person who, on the date on which soliciting 
        material is mailed to investors, is a holder of a beneficial 
        interest in a limited partnership that is the subject of a 
        limited partnership rollup transaction, and who casts a vote 
        against the transaction and complies with procedures 
        established by the association, except that for purposes of an 
        exchange or tender offer, such person shall file an objection 
        in writing under the rules of the association during the period 
        during which the offer is outstanding.''.

SEC. 304. EFFECTIVE DATE; EFFECT ON EXISTING AUTHORITY.

    (a) Effective Date.--
            (1) In general.--The amendments made by section 303 shall 
        become effective 12 months after the date of enactment of this 
        Act.
            (2) Rulemaking authority.--Notwithstanding paragraph (1), 
        the authority of the Securities and Exchange Commission, a 
        registered securities association, and a national securities 
        exchange to commence rulemaking proceedings for the purpose of 
        issuing rules pursuant to the amendments made by section 303 is 
        effective on the date of enactment of this Act.
            (3) Review of filings prior to effective date.--Prior to 
        the effective date of regulations promulgated pursuant to this 
        title, the Securities and Exchange Commission shall continue to 
        review and declare effective registration statements and 
        amendments thereto relating to limited partnership rollup 
        transactions in accordance with applicable regulations then in 
        effect.
    (b) Effect on Existing Authority.--The amendments made by this 
title shall not limit the authority of the Securities and Exchange 
Commission, a registered securities association, or a national 
securities exchange under any provision of the Securities Exchange Act 
of 1934, or preclude the Commission or such association or exchange 
from imposing, under any other such provision, a remedy or procedure 
required to be imposed under such amendments.

            Attest:






                                                             Secretary.

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