[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4638 Introduced in House (IH)]

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114th CONGRESS
  2d Session
                                H. R. 4638

To amend the Securities Exchange Act of 1934 to allow for the creation 
 of venture exchanges to promote liquidity of venture securities, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 26, 2016

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

_______________________________________________________________________

                                 A BILL


 
To amend the Securities Exchange Act of 1934 to allow for the creation 
 of venture exchanges to promote liquidity of venture 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 ``Main Street Growth Act''.

SEC. 2. VENTURE EXCHANGES.

    (a) Securities Exchange Act of 1934.--Section 6 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78f) is amended by adding at the end 
the following:
    ``(m) Venture Exchange.--
            ``(1) Registration.--
                    ``(A) In general.--A national securities exchange 
                may elect to be treated (or for a listing tier of such 
                exchange to be treated) as a venture exchange by 
                notifying the Commission of such election, either at 
                the time the exchange applies to be registered as a 
                national securities exchange or after registering as a 
                national securities exchange.
                    ``(B) Determination time period.--With respect to a 
                securities exchange electing to be treated (or for a 
                listing tier of such exchange to be treated) as a 
                venture exchange at the time the exchange applies to be 
                registered as a national securities exchange, such 
                application shall be deemed to have been approved by 
                the Commission unless the Commission denies such 
                application before the end of the 6-month period 
                beginning on the date the Commission received such 
                application.
            ``(2) Powers and restrictions.--A venture exchange--
                    ``(A) may only constitute, maintain, or provide a 
                market place or facilities for bringing together 
                purchasers and sellers of venture securities;
                    ``(B) may determine the increment to be used for 
                quoting and trading venture securities on the exchange;
                    ``(C) shall disseminate last sale and quotation 
                information on terms that are fair and reasonable and 
                not unreasonably discriminatory;
                    ``(D) may choose to carry out periodic auctions for 
                the sale of a venture security instead of providing 
                continuous trading of the venture security; and
                    ``(E) may not extend unlisted trading privileges to 
                any venture security.
            ``(3) Exemptions from certain national security exchange 
        regulations.--A venture exchange shall not be required to--
                    ``(A) comply with Rule NMS (sections 242.600 
                through 242.612 of title 17, Code of Federal 
                Regulations);
                    ``(B) comply with Rule ATS (sections 242.300 
                through 242.303 of title 17, Code of Federal 
                Regulations);
                    ``(C) submit any data to a securities information 
                processor; or
                    ``(D) use decimal pricing.
            ``(4) Definitions.--For purposes of this subsection:
                    ``(A) Early-stage, growth company.--
                            ``(i) In general.--The term `early-stage, 
                        growth company' means an issuer--
                                    ``(I) that has not made an initial 
                                public offering of any securities of 
                                the issuer; and
                                    ``(II) with a market capitalization 
                                of $1,000,000,000 or less.
                            ``(ii) Treatment when market capitalization 
                        exceeds threshold.--In the case of an issuer 
                        that is an early-stage, growth company the 
                        securities of which are traded on a venture 
                        exchange, such issuer shall not cease to be an 
                        early-stage, growth company by reason of the 
                        market capitalization of such issuer exceeding 
                        the threshold specified in clause (i)(II) until 
                        the end of the period of 12 consecutive months 
                        during which the market capitalization of such 
                        issuer exceeds $1,500,000,000.
                    ``(B) Venture security.--The term `venture 
                security' means--
                            ``(i) securities of an early-stage, growth 
                        company that are exempt from registration 
                        pursuant to section 3(b) of the Securities Act 
                        of 1933; and
                            ``(ii) securities of an emerging growth 
                        company.''.
    (b) Securities Act of 1933.--Section 18(b)(1) of the Securities Act 
of 1933 (15 U.S.C. 77r(b)(1)) is amended--
            (1) in subparagraph (B), by striking ``or'' at the end;
            (2) in subparagraph (C), by striking the period and 
        inserting ``; or''; and
            (3) by adding at the end the following:
                    ``(D) a venture security, as defined under section 
                6(m)(4) of the Securities Exchange Act of 1934.''.
    (c) Sense of Congress.--It is the sense of the Congress that the 
Securities and Exchange Commission should--
            (1) when necessary or appropriate in the public interest 
        and consistent with the protection of investors, make use of 
        the Commission's general exemptive authority under section 36 
        of the Securities Exchange Act of 1934 (15 U.S.C. 78mm) with 
        respect to the provisions added by this section; and
            (2) if the Commission determines appropriate, create an 
        Office of Venture Exchanges within the Commission's Division of 
        Trading and Markets.
    (d) Rule of Construction.--Nothing in this section or the 
amendments made by this section shall be construed to impair or limit 
the construction of the antifraud provisions of the securities laws (as 
defined in section 3(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a))) or the authority of the Securities and Exchange 
Commission under those provisions.
    (e) Effective Date for Tiers of Existing National Securities 
Exchanges.--In the case of a securities exchange that is registered as 
a national securities exchange under section 6 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78f) on the date of the enactment of 
this Act, any election for a listing tier of such exchange to be 
treated as a venture exchange under subsection (m) of such section 
shall not take effect before the date that is 180 days after such date 
of enactment.
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