[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 2114 Introduced in Senate (IS)]

113th CONGRESS
  2d Session
                                S. 2114

     To amend the Securities Exchange Act of 1934 with respect to 
 disclosures to investors in municipal and corporate debt securities, 
                        and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 12, 2014

Mr. Warner (for himself and Mr. Coburn) introduced the following bill; 
which was read twice and referred to the Committee on Banking, Housing, 
                           and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
     To amend the Securities Exchange Act of 1934 with respect to 
 disclosures to investors in municipal and corporate debt securities, 
                        and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Bond Transparency Act of 2014''.

SEC. 2. MARKUP DISCLOSURE IN RISKLESS PRINCIPAL TRANSACTIONS IN 
              MUNICIPAL SECURITIES.

    Section 15B of the Securities Exchange Act of 1934 (15 U.S.C. 78o-
4) is amended--
            (1) by redesignating subsection (e) as subsection (f); and
            (2) by inserting after subsection (d) the following:
    ``(e) Markup Disclosure in Riskless Principal Transactions.--
            ``(1) Definition.--In this subsection, the term `riskless 
        principal transaction' means--
                    ``(A) a transaction in which a broker, dealer, or 
                municipal securities dealer receives a customer order 
                to buy or sell any municipal securities and, after 
                receiving the customer order, buys the municipal 
                securities from, or sells the municipal securities to, 
                another person, while acting as principal for its own 
                account, to complete the customer order; and
                    ``(B) any other transaction the Commission 
                identifies by rule as a riskless principal transaction.
            ``(2) Disclosure required.--A broker, dealer, or municipal 
        securities dealer that effects a riskless principal transaction 
        shall disclose to the customer, in writing, at or before the 
        time of completion of the transaction, the amount of the 
        difference between--
                    ``(A) the customer's purchase price and the 
                broker's, dealer's or municipal securities dealer's 
                purchase price; or
                    ``(B) the customer's sale price and the broker's, 
                dealer's, or municipal securities dealer's sale 
                price.''.

SEC. 3. MARKUP DISCLOSURE IN RISKLESS PRINCIPAL TRANSACTIONS IN 
              CORPORATE DEBT SECURITIES.

    Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) 
is amended by adding at the end the following:
    ``(p) Markup Disclosure in Riskless Principal Transactions in 
Corporate Debt Securities.--
            ``(1) Definitions.--In this subsection--
                    ``(A) the term `specified debt security'--
                            ``(i) means any security that--
                                    ``(I) evidences a liability of the 
                                issuer (including any such security 
                                that is convertible into stock or 
                                similar security), including bonds, 
                                debentures, notes, or any similar 
                                instruments, and any fractional or 
                                participation interests in any of the 
                                foregoing; and
                                    ``(II) constitutes--
                                            ``(aa) United States 
                                        dollar-denominated securities 
                                        issued by the United States or 
                                        a foreign private issuer; or
                                            ``(bb) any other security 
                                        the Commission identifies by 
                                        rule as a specified debt 
                                        security for the purposes of 
                                        this subsection; and
                            ``(ii) does not include a municipal 
                        security, as defined in section 3(a)(29) of 
                        this Act; and
                    ``(B) the term `riskless principal transaction' 
                means--
                            ``(i) a transaction in which a broker or 
                        dealer receives a customer order to buy or sell 
                        any specified debt securities and, after 
                        receiving the customer order, buys the 
                        specified debt securities from, or sells the 
                        specified debt securities to, another person, 
                        while acting as principal for its own account, 
                        to complete the customer order; and
                            ``(ii) any other transaction the Commission 
                        identifies by rule as a riskless principal 
                        transaction.
            ``(2) Disclosure required.--A broker or dealer that effects 
        a riskless principal transaction shall disclose to the 
        customer, in writing, at or before the time of completion of 
        the transaction, the amount of the difference between--
                    ``(A) the customer's purchase price and the 
                broker's or dealer's purchase price; or
                    ``(B) the customer's sale price and the broker's or 
                dealer's sale price.''.
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