[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6127 Introduced in House (IH)]

112th CONGRESS
  2d Session
                                H. R. 6127

    To amend the Securities Exchange Act of 1934 to enable national 
 securities exchanges to provide financial incentives to market-makers 
  that adhere to objective standards that increase the liquidity and 
 depth of the public capital markets and promote enhanced trading and 
             price-discovery for smaller public companies.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 13, 2012

  Mr. McHenry (for himself and Mr. Garrett) introduced the following 
    bill; which was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
    To amend the Securities Exchange Act of 1934 to enable national 
 securities exchanges to provide financial incentives to market-makers 
  that adhere to objective standards that increase the liquidity and 
 depth of the public capital markets and promote enhanced trading and 
             price-discovery for smaller public companies.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Liquidity Enhancement for Small 
Public Companies Act''.

SEC. 2. MARKET QUALITY INCENTIVE PROGRAMS.

    (a) Rules of Exchanges.--Section 11 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78k) is amended by adding at the end the following:
    ``(e) Market Quality Incentive Programs.--
            ``(1) In general.--Notwithstanding any provision of this 
        title or any other provision of law, the Commission shall not 
        propose, adopt, maintain, or enforce any rule, regulation, 
        policy, or procedure that directly or indirectly bars a 
        national securities exchange from adopting and administering a 
        program pursuant to exchange rules under which the exchange, an 
        entity that lists securities on a national securities exchange, 
        an entity determined appropriate by the Commission, or any 
        other entity determined appropriate by a national securities 
        exchange, provides financial incentives to market makers that 
        adhere to standards of market quality established by the rules 
        of the exchange.
            ``(2) Procedure.--The procedure by which a national 
        securities exchange provides financial incentives to market 
        makers pursuant to paragraph (1) shall be set forth in the 
        rules of the exchange and the exchange shall provide financial 
        incentives only to those market makers that maintain specified 
        market quality standards that include aggressive quoting 
        requirements.
            ``(3) Limitation.--Any financial incentive provided to 
        market makers described in paragraphs (1) and (2) shall be paid 
        only by a national securities exchange and may not be paid 
        directly to a market maker by an entity that lists securities 
        on the exchange.''.
    (b) Rules of Associations.--Section 15A of the Securities Exchange 
Act of 1934 (15 U.S.C. 78o-3) is amended by adding at the end the 
following:
    ``(n) Market Quality Incentive Programs.--A national securities 
association registered under this section may not adopt, maintain, or 
propose any rule, regulation, policy, or procedure that directly or 
indirectly bars a national securities exchange from having a program 
under which the securities of an issuer determined appropriate by the 
Commission for listing on a national securities exchange provides 
financial incentives to market makers that adhere to standards of 
market quality established by the exchange.''.
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