[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 422 Enrolled Bill (ENR)]

        S.422
                       One Hundred Third Congress

                                 of the

                        United States of America


                          AT THE FIRST SESSION

          Begun and held at the City of Washington on Tuesday,
  the fifth day of January, one thousand nine hundred and ninety-three


                                 An Act

  
 
  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; 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:

``§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.







                                Speaker of the House of Representatives.







                             Vice President of the United States and    
                                                President of the Senate.