[Congressional Record Volume 144, Number 104 (Wednesday, July 29, 1998)]
[Senate]
[Pages S9318-S9320]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          SECURITIES LITIGATION UNIFORM STANDARDS ACT OF 1998

  Mr. CAMPBELL. Mr. President, I ask the Chair lay before the Senate a 
message from the House of Representatives on the bill (S. 1260) to 
amend the Securities Act of 1933 and Securities Exchange Act of 1934 to 
limit the conduct of securities class actions under State law, and for 
other purposes.
  The PRESIDING OFFICER laid before the Senate the following message 
from the House of Representatives:

       Resolved, That the bill from the Senate (S. 1260) entitled 
     ``An Act to amend the Securities Act of 1933 and the 
     Securities Exchange Act of 1934 to limit the conduct of 
     securities class actions under State law, and for other 
     purposes'', do pass with the following amendment:
       Strike out all after the enacting clause and insert:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Securities Litigation 
     Uniform Standards Act of 1998''.

            TITLE I--SECURITIES LITIGATION UNIFORM STANDARDS

     SEC. 101. LIMITATION ON REMEDIES.

       (a) Amendments to the Securities Act of 1933.--
       (1) Amendment.--Section 16 of the Securities Act of 1933 
     (15 U.S.C. 77p) is amended to read as follows:

     ``SEC. 16. ADDITIONAL REMEDIES; LIMITATION ON REMEDIES.

       ``(a) Remedies Additional.--Except as provided in 
     subsection (b), the rights and remedies provided by this 
     title shall be in addition to any and all other rights and 
     remedies that may exist at law or in equity.
       ``(b) Class Action Limitations.--No covered class action 
     based upon the statutory or common law of any State or 
     subdivision thereof may be maintained in any State or Federal 
     court by any private party alleging--
       ``(1) an untrue statement or omission of a material fact in 
     connection with the purchase or sale of a covered security; 
     or
       ``(2) that the defendant used or employed any manipulative 
     or deceptive device or contrivance in connection with the 
     purchase or sale of a covered security.
       ``(c) Removal of Covered Class Actions.--Any covered class 
     action brought in any State court involving a covered 
     security, as set forth in subsection (b), shall be removable 
     to the Federal district court for the district in which the 
     action is pending, and shall be subject to subsection (b).
       ``(d) Preservation of Certain Actions.--
       ``(1) Actions under state law of state of incorporation.--
       ``(A) Actions preserved.--Notwithstanding subsection (b) or 
     (c), a covered class action described in subparagraph (B) of 
     this paragraph that is based upon the statutory or common law 
     of the State in which the issuer is incorporated (in the case 
     of a corporation) or organized (in the case of any other 
     entity) may be maintained in a State or Federal court by a 
     private party.
       ``(B) Permissible actions.--A covered class action is 
     described in this subparagraph if it involves--
       ``(i) the purchase or sale of securities by the issuer or 
     an affiliate of the issuer exclusively from or to holders of 
     equity securities of the issuer; or
       ``(ii) any recommendation, position, or other communication 
     with respect to the sale of securities of the issuer that--

       ``(I) is made by or on behalf of the issuer or an affiliate 
     of the issuer to holders of equity securities of the issuer; 
     and
       ``(II) concerns decisions of those equity holders with 
     respect to voting their securities, acting in response to a 
     tender or exchange offer, or exercising dissenters' or 
     appraisal rights.

       ``(2) State actions.--
       ``(A) In general.--Notwithstanding any other provision of 
     this section, nothing in this section may be construed to 
     preclude a State or political subdivision thereof or a State 
     pension plan from bringing an action involving a covered 
     security on its own behalf, or as a member of a class 
     comprised solely of other States, political subdivisions, or 
     State pension plans that are named plaintiffs, and that have 
     authorized participation, in such action.
       ``(B) State pension plan defined.--For purposes of this 
     paragraph, the term `State pension plan' means a pension plan 
     established and maintained for its employees by the 
     government of the State or political subdivision thereof, or 
     by any agency or instrumentality thereof.
       ``(3) Actions under contractual agreements between issuers 
     and indenture trustees.--Notwithstanding subsection (b) or 
     (c), a covered class action that seeks to enforce a 
     contractual agreement between an issuer and an indenture 
     trustee may be maintained in a State or Federal court by a 
     party to the agreement or a successor to such party.
       ``(4) Remand of removed actions.--In an action that has 
     been removed from a State court pursuant to subsection (c), 
     if the Federal court determines that the action may be 
     maintained in State court pursuant to this subsection, the 
     Federal court shall remand such action to such State court.
       ``(e) Preservation of State Jurisdiction.--The securities 
     commission (or any agency or office performing like 
     functions) of any State shall retain jurisdiction under the 
     laws of such State to investigate and bring enforcement 
     actions.
       ``(f) Definitions.--For purposes of this section, the 
     following definitions shall apply:
       ``(1) Affiliate of the issuer.--The term `affiliate of the 
     issuer' means a person that directly or indirectly, through 
     one or more intermediaries, controls or is controlled by or 
     is under common control with, the issuer.
       ``(2) Covered class action.--
       ``(A) In general.--The term `covered class action' means--
       ``(i) any single lawsuit in which--

       ``(I) damages are sought on behalf of more than 50 persons 
     or prospective class members, and questions of law or fact 
     common to those persons or members of the prospective class, 
     without reference to issues of individualized reliance on an 
     alleged misstatement or omission, predominate over any 
     questions affecting only individual persons or members; or
       ``(II) one or more named parties seek to recover damages on 
     a representative basis on behalf of themselves and other 
     unnamed parties similarly situated, and questions of law or 
     fact common to those persons or members of the prospective 
     class predominate over any questions affecting only 
     individual persons or members; or

       ``(ii) any group of lawsuits filed in or pending in the 
     same court and involving common questions of law or fact, in 
     which--

       ``(I) damages are sought on behalf of more than 50 persons; 
     and
       ``(II) the lawsuits are joined, consolidated, or otherwise 
     proceed as a single action for any purpose.

[[Page S9319]]

       ``(B) Exception for derivative actions.--Notwithstanding 
     subparagraph (A), the term `covered class action' does not 
     include an exclusively derivative action brought by one or 
     more shareholders on behalf of a corporation.
       ``(C) Counting of certain class members.--For purposes of 
     this paragraph, a corporation, investment company, pension 
     plan, partnership, or other entity, shall be treated as one 
     person or prospective class member, but only if the entity is 
     not established for the purpose of participating in the 
     action.
       ``(D) Rule of construction.--Nothing in this paragraph 
     shall be construed to affect the discretion of a State court 
     in determining whether actions filed in such court should be 
     joined, consolidated, or otherwise allowed to proceed as a 
     single action.
       ``(3) Covered security.--The term `covered security' means 
     a security that satisfies the standards for a covered 
     security specified in section 18(b)(1) at the time during 
     which it is alleged that the misrepresentation, omission, or 
     manipulative or deceptive conduct occurred, except that such 
     term shall not include any debt security that is exempt from 
     registration under this title pursuant to rules issued by the 
     Commission under section 4(2) of this title.''.
       (2) Circumvention of stay of discovery.--Section 27(b) of 
     the Securities Act of 1933 (15 U.S.C. 77z-1(b)) is amended by 
     inserting after paragraph (3) the following new paragraph:
       ``(4) Circumvention of stay of discovery.--Upon a proper 
     showing, a court may stay discovery proceedings in any 
     private action in a State court as necessary in aid of its 
     jurisdiction, or to protect or effectuate its judgments, in 
     an action subject to a stay of discovery pursuant to this 
     subsection.''.
       (3) Conforming amendments.--Section 22(a) of the Securities 
     Act of 1933 (15 U.S.C. 77v(a)) is amended--
       (A) by inserting ``except as provided in section 16 with 
     respect to covered class actions,'' after ``Territorial 
     courts,''; and
       (B) by striking ``No case'' and inserting ``Except as 
     provided in section 16(c), no case''.
       (b) Amendments to the Securities Exchange Act of 1934.--
       (1) Amendment.--Section 28 of the Securities Exchange Act 
     of 1934 (15 U.S.C. 78bb) is amended--
       (A) in subsection (a), by striking ``The rights and 
     remedies'' and inserting ``Except as provided in subsection 
     (f), the rights and remedies''; and
       (B) by adding at the end the following new subsection:
       ``(f) Limitations on Remedies.--
       ``(1) Class action limitations.--No covered class action 
     based upon the statutory or common law of any State or 
     subdivision thereof may be maintained in any State or Federal 
     court by any private party alleging--
       ``(A) a misrepresentation or omission of a material fact in 
     connection with the purchase or sale of a covered security; 
     or
       ``(B) that the defendant used or employed any manipulative 
     or deceptive device or contrivance in connection with the 
     purchase or sale of a covered security.
       ``(2) Removal of covered class actions.--Any covered class 
     action brought in any State court involving a covered 
     security, as set forth in paragraph (1), shall be removable 
     to the Federal district court for the district in which the 
     action is pending, and shall be subject to paragraph (1).
       ``(3) Preservation of certain actions.--
       ``(A) Actions under state law of state of incorporation.--
       ``(i) Actions preserved.--Notwithstanding paragraph (1) or 
     (2), a covered class action described in clause (ii) of this 
     subparagraph that is based upon the statutory or common law 
     of the State in which the issuer is incorporated (in the case 
     of a corporation) or organized (in the case of any other 
     entity) may be maintained in a State or Federal court by a 
     private party.
       ``(ii) Permissible actions.--A covered class action is 
     described in this clause if it involves--

       ``(I) the purchase or sale of securities by the issuer or 
     an affiliate of the issuer exclusively from or to holders of 
     equity securities of the issuer; or
       ``(II) any recommendation, position, or other communication 
     with respect to the sale of securities of an issuer that--

       ``(aa) is made by or on behalf of the issuer or an 
     affiliate of the issuer to holders of equity securities of 
     the issuer; and
       ``(bb) concerns decisions of such equity holders with 
     respect to voting their securities, acting in response to a 
     tender or exchange offer, or exercising dissenters' or 
     appraisal rights.
       ``(B) State actions.--
       ``(i) In general.--Notwithstanding any other provision of 
     this subsection, nothing in this subsection may be construed 
     to preclude a State or political subdivision thereof or a 
     State pension plan from bringing an action involving a 
     covered security on its own behalf, or as a member of a class 
     comprised solely of other States, political subdivisions, or 
     State pension plans that are named plaintiffs, and that have 
     authorized participation, in such action.
       ``(ii) State pension plan defined.--For purposes of this 
     subparagraph, the term `State pension plan' means a pension 
     plan established and maintained for its employees by the 
     government of a State or political subdivision thereof, or by 
     any agency or instrumentality thereof.
       ``(C) Actions under contractual agreements between issuers 
     and indenture trustees.--Notwithstanding paragraph (1) or 
     (2), a covered class action that seeks to enforce a 
     contractual agreement between an issuer and an indenture 
     trustee may be maintained in a State or Federal court by a 
     party to the agreement or a successor to such party.
       ``(D) Remand of removed actions.--In an action that has 
     been removed from a State court pursuant to paragraph (2), if 
     the Federal court determines that the action may be 
     maintained in State court pursuant to this subsection, the 
     Federal court shall remand such action to such State court.
       ``(4) Preservation of state jurisdiction.--The securities 
     commission (or any agency or office performing like 
     functions) of any State shall retain jurisdiction under the 
     laws of such State to investigate and bring enforcement 
     actions.
       ``(5) Definitions.--For purposes of this subsection, the 
     following definitions shall apply:
       ``(A) Affiliate of the issuer.--The term `affiliate of the 
     issuer' means a person that directly or indirectly, through 
     one or more intermediaries, controls or is controlled by or 
     is under common control with, the issuer.
       ``(B) Covered class action.--The term `covered class 
     action' means--
       ``(i) any single lawsuit in which--

       ``(I) damages are sought on behalf of more than 50 persons 
     or prospective class members, and questions of law or fact 
     common to those persons or members of the prospective class, 
     without reference to issues of individualized reliance on an 
     alleged misstatement or omission, predominate over any 
     questions affecting only individual persons or members; or
       ``(II) one or more named parties seek to recover damages on 
     a representative basis on behalf of themselves and other 
     unnamed parties similarly situated, and questions of law or 
     fact common to those persons or members of the prospective 
     class predominate over any questions affecting only 
     individual persons or members; or

       ``(ii) any group of lawsuits filed in or pending in the 
     same court and involving common questions of law or fact, in 
     which--

       ``(I) damages are sought on behalf of more than 50 persons; 
     and
       ``(II) the lawsuits are joined, consolidated, or otherwise 
     proceed as a single action for any purpose.

       ``(C) Exception for derivative actions.--Notwithstanding 
     subparagraph (B), the term `covered class action' does not 
     include an exclusively derivative action brought by one or 
     more shareholders on behalf of a corporation.
       ``(D) Counting of certain class members.--For purposes of 
     this paragraph, a corporation, investment company, pension 
     plan, partnership, or other entity, shall be treated as one 
     person or prospective class member, but only if the entity is 
     not established for the purpose of participating in the 
     action.
       ``(E) Covered security.--The term `covered security' means 
     a security that satisfies the standards for a covered 
     security specified in section 18(b)(1) of the Securities Act 
     of 1933, at the time during which it is alleged that the 
     misrepresentation, omission, or manipulative or deceptive 
     conduct occurred, except that such term shall not include any 
     debt security that is exempt from registration under the 
     Securities Act of 1933 pursuant to rules issued by the 
     Commission under section 4(2) of such Act.
       ``(F) Rule of construction.--Nothing in this paragraph 
     shall be construed to affect the discretion of a State court 
     in determining whether actions filed in such court should be 
     joined, consolidated, or otherwise allowed to proceed as a 
     single action.''.
       (2) Circumvention of stay of discovery.--Section 21D(b)(3) 
     of the Securities Exchange Act of 1934 (15 U.S.C. 78u-
     4(b)(3)) is amended by inserting after subparagraph (C) the 
     following new subparagraph:
       ``(D) Circumvention of stay of discovery.--Upon a proper 
     showing, a court may stay discovery proceedings in any 
     private action in a State court as necessary in aid of its 
     jurisdiction, or to protect or effectuate its judgments, in 
     an action subject to a stay of discovery pursuant to this 
     paragraph.''.
       (c) Applicability.--The amendments made by this section 
     shall not affect or apply to any action commenced before and 
     pending on the date of enactment of this Act.

     SEC. 102. PROMOTION OF RECIPROCAL SUBPOENA ENFORCEMENT.

       (a) Commission Action.--The Securities and Exchange 
     Commission, in consultation with State securities 
     commissions, shall seek to encourage the adoption of State 
     laws providing for reciprocal enforcement by State securities 
     commissions of subpoenas issued by another State securities 
     commission seeking to compel persons to attend, testify in, 
     or produce documents or records in connection with an action 
     or investigation by a State securities commission of an 
     alleged violation of State securities laws.
       (b) Report.--Within 24 months after the date of enactment 
     of this Act, the Commission shall submit a report to the 
     Congress--
       (1) identifying the States that have adopted laws described 
     in subsection (a);
       (2) describing the actions undertaken by the Commission and 
     State securities commissions to promote the adoption of such 
     laws; and
       (3) identifying any further actions the Commission 
     recommends for such purposes.

     SEC. 103. REPORT ON CONSEQUENCES.

       The Securities and Exchange Commission shall include in 
     each of its first three annual reports submitted after the 
     date of enactment of this Act a report regarding--
       (1) the nature and the extent of the class action cases 
     that are preempted by, or removed pursuant to, the amendments 
     made by section 101 of this title;
       (2) the extent to which that preemption or removal either 
     promotes or adversely affects the protection of securities 
     investors or the public interest; and
       (3) if adverse effects are found, alternatives to, or 
     revisions of, such preemption or removal that--
       (A) would not have such adverse effects;
       (B) would further promote the protection of investors and 
     the public interest; and
       (C) would still substantially reduce the risk of abusive 
     securities litigation.

[[Page S9320]]

  TITLE II--REAUTHORIZATION OF THE SECURITIES AND EXCHANGE COMMISSION

     SEC. 201. AUTHORIZATION OF APPROPRIATIONS.

       Section 35 of the Securities Exchange Act of 1934 (15 
     U.S.C. 78kk) is amended to read as follows:

     ``SEC. 35. AUTHORIZATION OF APPROPRIATIONS.

       ``(a) In General.--In addition to any other funds 
     authorized to be appropriated to the Commission, there are 
     authorized to be appropriated to carry out the functions, 
     powers, and duties of the Commission $351,280,000 for fiscal 
     year 1999.
       ``(b) Miscellaneous Expenses.--Funds appropriated pursuant 
     to this section are authorized to be expended--
       ``(1) not to exceed $3,000 per fiscal year, for official 
     reception and representation expenses;
       ``(2) not to exceed $10,000 per fiscal year, for funding a 
     permanent secretariat for the International Organization of 
     Securities Commissions; and
       ``(3) not to exceed $100,000 per fiscal year, for expenses 
     for consultations and meetings hosted by the Commission with 
     foreign governmental and other regulatory officials, members 
     of their delegations, appropriate representatives, and staff 
     to exchange views concerning developments relating to 
     securities matters, for development and implementation of 
     cooperation agreements concerning securities matters and 
     provision of technical assistance for the development of 
     foreign securities markets, such expenses to include 
     necessary logistic and administrative expenses and the 
     expenses of Commission staff and foreign invitees in 
     attendance at such consultations and meetings, including--
       ``(A) such incidental expenses as meals taken in the course 
     of such attendance;
       ``(B) any travel or transportation to or from such 
     meetings; and
       ``(C) any other related lodging or subsistence.''.

     SEC. 202. REQUIREMENTS FOR THE EDGAR SYSTEM.

       Section 35A of the Securities Exchange Act of 1934 (15 
     U.S.C. 78ll) is amended--
       (1) by striking subsections (a), (b), (c), and (e); and
       (2) in subsection (d)--
       (A) by striking the subsection designation;
       (B) by striking ``; and'' at the end of paragraph (2) and 
     inserting a period; and
       (C) by striking paragraph (3).

              TITLE III--CLERICAL AND TECHNICAL AMENDMENTS

     SEC. 301. CLERICAL AND TECHNICAL AMENDMENTS.

       (a) Securities Act of 1933.--The Securities Act of 1933 (15 
     U.S.C. 77 et seq.) is amended as follows:
       (1) Section 2(a)(15)(i) (15 U.S.C. 77b(a)(15)(i)) is 
     amended by striking ``section 2(13) of the Act'' and 
     inserting ``paragraph (13) of this subsection''.
       (2) Section 11(f)(2)(A) (15 U.S.C. 77k(f)(2)(A)) is amended 
     by striking ``section 38'' and inserting ``section 21D(f)''.
       (3) Section 13 (15 U.S.C. 77m) is amended--
       (A) by striking ``section 12(2)'' each place it appears and 
     inserting ``section 12(a)(2)''; and
       (B) by striking ``section 12(1)'' each place it appears and 
     inserting ``section 12(a)(1)''.
       (4) Section 18 (15 U.S.C. 77r) is amended--
       (A) in subsection (b)(1)(A), by inserting ``, or authorized 
     for listing,'' after ``Exchange, or listed'';
       (B) in subsection (c)(2)(B)(i), by striking ``Capital 
     Markets Efficiency Act of 1996'' and inserting ``National 
     Securities Markets Improvement Act of 1996'';
       (C) in subsection (c)(2)(C)(i), by striking ``Market'' and 
     inserting ``Markets'';
       (D) in subsection (d)(1)(A)--
       (i) by striking ``section 2(10)'' and inserting ``section 
     2(a)(10)''; and
       (ii) by striking ``subparagraphs (A) and (B)'' and 
     inserting ``subparagraphs (a) and (b)'';
       (E) in subsection (d)(2), by striking ``Securities 
     Amendments Act of 1996'' and inserting ``National Securities 
     Markets Improvement Act of 1996''; and
       (F) in subsection (d)(4), by striking ``For purposes of 
     this paragraph, the'' and inserting ``The''.
       (5) Sections 27, 27A, and 28 (15 U.S.C. 77z-1, 77z-2, 77z-
     3) are transferred to appear after section 26.
       (6) Paragraph (28) of schedule A of such Act (15 U.S.C. 
     77aa(28)) is amended by striking ``identic'' and inserting 
     ``identical''.
       (b) Securities Exchange Act of 1934.--The Securities 
     Exchange Act of 1934 (15 U.S.C. 78 et seq.) is amended as 
     follows:
       (1) Section 3(a)(10) (15 U.S.C. 78c(a)(10)) is amended by 
     striking ``deposit, for'' and inserting ``deposit for''.
       (2) Section 3(a)(12)(A) (15 U.S.C. 78c(a)(12)(A)) is 
     amended by moving clause (vi) two em spaces to the left.
       (3) Section 3(a)(22)(A) (15 U.S.C. 78c(a)(22)(A)) is 
     amended--
       (A) by striking ``section 3(h)'' and inserting ``section 
     3''; and
       (B) by striking ``section 3(t)'' and inserting ``such 
     section 3''.
       (4) Section 3(a)(39)(B)(i) (15 U.S.C. 78c(a)(39)(B)(i)) is 
     amended by striking ``an order to the Commission'' and 
     inserting ``an order of the Commission''.
       (5) The following sections are each amended by striking 
     ``Federal Reserve Board'' and inserting ``Board of Governors 
     of the Federal Reserve System'': subsections (a) and (b) of 
     section 7 (15 U.S.C. 78g(a), (b)); section 17(g) (15 U.S.C. 
     78q(g)); and section 26 (15 U.S.C. 78z).
       (6) The heading of subsection (d) of section 7 (15 U.S.C. 
     78g(d)) is amended by striking ``Exception'' and inserting 
     ``Exceptions''.
       (7) Section 14(g)(4) (15 U.S.C. 78n(g)(4)) is amended by 
     striking ``consolidation sale,'' and inserting 
     ``consolidation, sale,''.
       (8) Section 15 (15 U.S.C. 78o) is amended--
       (A) in subsection (c), by moving paragraph (8) two em 
     spaces to the left;
       (B) in subsection (h)(2), by striking ``affecting'' and 
     inserting ``effecting'';
       (C) in subsection (h)(3)(A)(i)(II)(bb), by inserting ``or'' 
     after the semicolon;
       (D) in subsection (h)(3)(A)(ii)(I), by striking 
     ``maintains'' and inserting ``maintained'';
       (E) in subsection (h)(3)(B)(ii), by striking 
     ``association'' and inserting ``associated''.
       (9) Section 15B(c)(4) (15 U.S.C. 78o-4(c)(4)) is amended by 
     striking ``convicted by any offense'' and inserting 
     ``convicted of any offense''.
       (10) Section 15C(f)(5) (15 U.S.C. 78o-5(f)(5)) is amended 
     by striking ``any person or class or persons'' and inserting 
     ``any person or class of persons''.
       (11) Section 19(c) (15 U.S.C. 78s(c)) is amended by moving 
     paragraph (5) two em spaces to the right.
       (12) Section 20 (15 U.S.C. 78t) is amended by redesignating 
     subsection (f) as subsection (e).
       (13) Section 21D (15 U.S.C. 78u-4) is amended--
       (A) by redesignating subsection (g) as subsection (f); and
       (B) in paragraph (2)(B)(i) of such subsection, by striking 
     ``paragraph (1)'' and inserting ``subparagraph (A)''.
       (14) Section 31(a) (15 U.S.C. 78ee(a)) is amended by 
     striking ``this subsection'' and inserting ``this section''.
       (c) Investment Company Act of 1940.--The Investment Company 
     Act of 1940 (15 U.S.C. 80a-1 et seq.) is amended as follows:
       (1) Section 2(a)(8) (15 U.S.C. 80a-2(a)(8)) is amended by 
     striking ``Unitde'' and inserting ``United''.
       (2) Section 3(b) (15 U.S.C. 80a-3(b)) is amended by 
     striking ``paragraph (3) of subsection (a)'' and inserting 
     ``paragraph (1)(C) of subsection (a)''.
       (3) Section 12(d)(1)(G)(i)(III)(bb) (15 U.S.C. 80a-
     12(d)(1)(G)(i)(III)(bb)), by striking ``the acquired fund'' 
     and inserting ``the acquired company''.
       (4) Section 18(e)(2) (15 U.S.C. 80a-18(e)(2)) is amended by 
     striking ``subsection (e)(2)'' and inserting ``paragraph (1) 
     of this subsection''.
       (5) Section 30 (15 U.S.C. 80a-29) is amended--
       (A) by inserting ``and'' after the semicolon at the end of 
     subsection (b)(1);
       (B) in subsection (e), by striking ``semi-annually'' and 
     inserting ``semiannually''; and
       (C) by redesignating subsections (g) and (h) as added by 
     section 508(g) of the National Securities Markets Improvement 
     Act of 1996 as subsections (i) and (j), respectively.
       (6) Section 31(f) (15 U.S.C. 80a-30(f)) is amended by 
     striking ``subsection (c)'' and inserting ``subsection (e)''.
       (d) Investment Advisers Act of 1940.--The Investment 
     Advisers Act of 1940 (15 U.S.C. 80b et seq.) is amended as 
     follows:
       (1) Section 203(e)(8)(B) (15 U.S.C. 80b-3(e)(8)(B)) is 
     amended by inserting ``or'' after the semicolon.
       (2) Section 222(b)(2) of (15 U.S.C. 80b-18a(b)(2)) is 
     amended by striking ``principle'' and inserting 
     ``principal''.
       (e) Trust Indenture Act of 1939.--The Trust Indenture Act 
     of 1939 (15 U.S.C. 77aaa et seq.) is amended as follows:
       (1) Section 303 (15 U.S.C. 77ccc) is amended by striking 
     ``section 2'' each place it appears in paragraphs (2) and (3) 
     and inserting ``section 2(a)''.
       (2) Section 304(a)(4)(A) (15 U.S.C. 77ddd(a)(4)(A)) is 
     amended by striking ``(14) of subsection'' and inserting 
     ``(13) of section''.
       (3) Section 313(a) (15 U.S.C. 77mmm(a)) is amended--
       (A) by inserting ``any change to'' after the paragraph 
     designation at the beginning of paragraph (4); and
       (B) by striking ``any change to'' in paragraph (6).
       (4) Section 319(b) (15 U.S.C. 77sss(b)) is amended by 
     striking ``the Federal Register Act'' and inserting ``chapter 
     15 of title 44, United States Code,''.

     SEC. 302. EXEMPTION OF SECURITIES ISSUED IN CONNECTION WITH 
                   CERTAIN STATE HEARINGS.

       Section 18(b)(4)(C) of the Securities Act of 1933 (15 
     U.S.C. 77r(b)(4)(C)) is amended by striking ``paragraph (4) 
     or (11)'' and inserting ``paragraph (4), (10), or (11)''.

  Mr. CAMPBELL. Mr. President, I ask unanimous consent that the Senate 
disagree in the amendment of the House and request a conference with 
the House, and the Chair be authorized to appoint conferees on the part 
of the Senate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Presiding Officer appointed Mr. D'Amato, Mr. Gramm, Mr. Shelby, 
Mr. Sarbanes, and Mr. Dodd conferees on the part of the Senate.

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