[Congressional Record (Bound Edition), Volume 153 (2007), Part 23]
[House]
[Pages 32202-32204]
[From the U.S. Government Publishing Office, www.gpo.gov]




            SECURITIES LAW TECHNICAL CORRECTIONS ACT OF 2007

  Mr. SCOTT of Georgia. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 3505) to make various technical and clerical 
amendments to the Federal securities laws, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 3505

       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 ``Securities Law Technical 
     Corrections Act of 2007''.

     SEC. 2. TECHNICAL CORRECTIONS.

       (a) Securities Act of 1933.--The Securities Act of 1933 (15 
     U.S.C. 77a et seq.) is amended--
       (1) in section 3(a)(4) (15 U.S.C. 77c(a)(4)), by striking 
     ``individual;'' and inserting ``individual,'';
       (2) in section 18(b)(1)(C) (15 U.S.C. 77r(b)(1)(C)), by 
     striking ``is a security'' and inserting ``a security'';
       (3) in section 18(c)(2)(B)(i) (15 U.S.C. 77r(c)(2)(B)(i)), 
     by striking ``State, or'' and inserting ``State or'';
       (4) in section 19(d)(6)(A) (15 U.S.C. 77s(d)(6)(A)), by 
     striking ``in paragraph (1) of (3)'' and inserting ``in 
     paragraph (1) or (3)''; and
       (5) in section 27A(c)(1)(B)(ii) (15 U.S.C. 77z-
     2(c)(1)(B)(ii)), by striking ``business entity;'' and 
     inserting ``business entity,''.
       (b) Securities Exchange Act of 1934.--The Securities 
     Exchange Act of 1934 (15 U.S.C. 78 et seq.) is amended--
       (1) in section 2(1)(a) (15 U.S.C. 78b(1)(a)), by striking 
     ``affected'' and inserting ``effected'';
       (2) in section 3(a)(55)(A) (15 U.S.C. 78c(a)(55)(A)), by 
     striking ``section 3(a)(12) of the Securities Exchange Act of 
     1934'' and inserting ``section 3(a)(12) of this Act'';
       (3) in section 3(g) (15 U.S.C. 78c(g)), by striking 
     ``company, account person, or entity'' and inserting 
     ``company, account, person, or entity'';
       (4) in section 10A(i)(1)(B)(i) (15 U.S.C. 78j-
     1(i)(1)(B)(i)), by striking ``nonaudit'' and inserting ``non-
     audit'';
       (5) in section 13(b)(1) (15 U.S.C. 78m(b)(1)), by striking 
     ``earning statement'' and inserting ``earnings statement'';
       (6) in section 15(b)(1) (15 U.S.C. 78o(b)(1))--
       (A) by striking the sentence beginning ``The order 
     granting'' and ending ``from such membership.'' in 
     subparagraph (B); and
       (B) inserting such sentence in the matter following such 
     subparagraph after ``are satisfied.'';
       (7) in section 15 (15 U.S.C. 78o), redesignate subsection 
     (i), as added by section 303(f) of the Commodity Futures 
     Modernization Act of 2000 (114 Stat. 2763A-455), as 
     subsection (j);
       (8) in section 15C(a)(2) (15 U.S.C. 78o-5(a)(2))--
       (A) by redesignating clauses (i) and (ii) as subparagraphs 
     (A) and (B), respectively;
       (B) by striking the sentence beginning ``The order 
     granting'' and ending ``from such membership.'' in such 
     redesignated subparagraph (B); and
       (C) inserting such sentence in the matter following such 
     redesignated subparagraph after ``are satisfied.'';
       (9) in section 16(a)(2)(C) (15 U.S.C. 78p(a)(2)(C)), by 
     striking ``section 206(b)'' and inserting ``section 206B'';
       (10) in section 17(b)(1)(B) (15 U.S.C. 78q(b)(1)(B)), by 
     striking ``15A(k) gives'' and inserting ``15A(k), give''; and
       (11) in section 21C(c)(2) (15 U.S.C. 78u-3(c)(2)), by 
     striking ``paragraph (1) subsection'' and inserting 
     ``Paragraph (1)''.
       (c) Trust Indenture Act of 1939.--The Trust Indenture Act 
     of 1939 (15 U.S.C. 77aaa et seq.) is amended--

[[Page 32203]]

       (1) in section 304(b) (15 U.S.C. 77ddd(b)), by striking 
     ``section 2 of such Act'' and inserting ``section 2(a) of 
     such Act'';
       (2) in section 313(a)(4) (15 U.S.C. 77mmm(a)(4)) by 
     striking ``subsection 311'' and inserting ``section 311(b)''; 
     and
       (3) in section 317(a)(1) (15 U.S.C. 77qqq(a)(1)), by 
     striking ``(1),'' and inserting ``(1)''.
       (d) Investment Company Act of 1940.--The Investment Company 
     Act of 1940 (15 U.S.C. 80a-1 et seq.) is amended--
       (1) in section 2(a)(19) (15 U.S.C. 80a-2(a)(19)) by 
     striking ``clause (vi)'' both places it appears in the last 
     two sentences and inserting ``clause (vii)'';
       (2) in section 9(b)(4)(B) (15 U.S.C. 80a-9(b)(4)(B)), by 
     inserting ``or'' after the semicolon at the end;
       (3) in section 12(d)(1)(J) (15 U.S.C. 80a-12(d)(1)(J)), by 
     striking ``any provision of this subsection'' and inserting 
     ``any provision of this paragraph'';
       (4) in section 13(a)(3) (15 U.S.C. 80a-13(a)(3)), by 
     inserting ``or'' after the semicolon at the end;
       (5) in section 17(f)(4) (15 U.S.C. 80a-17(f)(4)), by 
     striking ``No such member'' and inserting ``No member of a 
     national securities exchange'';
       (6) in section 17(f)(6) (15 U.S.C. 80a-17(f)(6)), by 
     striking ``company may serve'' and inserting ``company, may 
     serve''; and
       (7) in section 61(a)(3)(B)(iii) (15 U.S.C. 80a-
     60(a)(3)(B)(iii))--
       (A) by striking ``paragraph (1) of section 205'' and 
     inserting ``section 205(a)(1)''; and
       (B) by striking ``clause (A) or (B) of that section'' and 
     inserting ``section 205(b)(1) or (2)''.
       (e) Investment Advisers Act of 1940.--The Investment 
     Advisers Act of 1940 (15 U.S.C. 80b-1 et seq.) is amended--
       (1) in each of the following sections, by striking 
     ``principal business office'' or ``principal place of 
     business'' (whichever and wherever it appears) and inserting 
     ``principal office and place of business'': sections 
     203(c)(1)(A), 203(k)(4)(B), 213(a), 222(b), and 222(c) (15 
     U.S.C. 80b-3(c)(1)(A), 80b-3(k)(4)(B), 80b-13(a), 80b-18a(b), 
     and 80b-18a(c)); and
       (2) in section 206(3) (15 U.S.C. 80b-6(3)), by inserting 
     ``or'' after the semicolon at the end.

     SEC. 3. CONFORMING AMENDMENTS FOR THE REPEAL OF THE PUBLIC 
                   UTILITIES HOLDING COMPANY ACT OF 1935.

       (a) Securities Exchange Act of 1934.--The Securities 
     Exchange Act of 1934 (15 U.S.C. 78 et seq.) is amended--
       (1) in section 3(a)(47) (15 U.S.C. 78c(a)(47)), by striking 
     ``the Public Utility Holding Company Act of 1935 (15 U.S.C. 
     79a et seq.),''; and
       (2) in section 12(k) (15 U.S.C. 78l(k)), by amending 
     paragraph (7) to read as follows:   
       ``(7) Definition.--For purposes of this subsection, the 
     term `emergency' means--
       ``(A) a major market disturbance characterized by or 
     constituting--
       ``(i) sudden and excessive fluctuations of securities 
     prices generally, or a substantial threat thereof, that 
     threaten fair and orderly markets; or
       ``(ii) a substantial disruption of the safe or efficient 
     operation of the national system for clearance and settlement 
     of transactions in securities, or a substantial threat 
     thereof; or
       ``(B) a major disturbance that substantially disrupts, or 
     threatens to substantially disrupt--
       ``(i) the functioning of securities markets, investment 
     companies, or any other significant portion or segment of the 
     securities markets; or
       ``(ii) the transmission or processing of securities 
     transactions.''.
       (3) in section 21(h)(2) (15 U.S.C. 78u(h)(2)), by striking 
     ``section 18(c) of the Public Utility Holding Company Act of 
     1935,''.
       (b) Trust Indenture Act of 1939.--The Trust Indenture Act 
     of 1939 (15 U.S.C. 77aaa et seq.) is amended--
       (1) in section 303 (15 U.S.C. 77ccc), by amending paragraph 
     (17) to read as follows:
       ``(17) The terms `Securities Act of 1933' and `Securities 
     Exchange Act of 1934' shall be deemed to refer, respectively, 
     to such Acts, as amended, whether amended prior to or after 
     the enactment of this title.'';
       (2) in section 308 (15 U.S.C. 77hhh), by striking 
     ``Securities Act of 1933, the Securities Exchange Act of 
     1934, or the Public Utility Holding Company Act of 1935'' 
     each place it appears and inserting ``Securities Act of 1933 
     or the Securities Exchange Act of 1934'';
       (3) in section 310 (15 U.S.C. 77jjj), by striking 
     subsection (c) (including the preceding heading);
       (4) in section 311 (15 U.S.C. 77kkk) by striking subsection 
     (c);
       (5) in section 323(b) (15 U.S.C. 77www(b)), by striking 
     ``Securities Act of 1933, or the Securities Exchange Act of 
     1934, or the Public Utility Holding Company Act of 1935'' and 
     inserting ``Securities Act of 1933 or the Securities Exchange 
     Act of 1934''; and
       (6) in section 326 (15 U.S.C. 77zzz), by striking 
     ``Securities Act of 1933, or the Securities Exchange Act of 
     1934, or the Public Utility Holding Company Act of 1935,'' 
     and inserting ``Securities Act of 1933 or the Securities 
     Exchange Act of 1934''.
       (c) Investment Company Act of 1940.--The Investment Company 
     Act of 1940 (15 U.S.C. 80a-1 et seq.) is amended--
       (1) in section 2(a)(44) (15 U.S.C. 80a-2(a)(44)), by 
     striking ```Public Utility Holding Company Act of 1935','';
       (2) in section 3(c) (15 U.S.C. 80a-3(c)), by amending 
     paragraph (8) to read as follows:
       ``(8) [Repealed]'';
       (3) in section 38(b) (15 U.S.C. 80a-37(b)), by striking 
     ``the Public Utility Holding Company Act of 1935,''; and
       (4) in section 50 (15 U.S.C. 80a-49), by striking ``the 
     Public Utility Holding Company Act of 1935,''.
       (d) Investment Advisers Act of 1940.--Section 202(a)(21) of 
     the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(21)) 
     is amended by striking ```Public Utility Holding Company Act 
     of 1935',''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Georgia (Mr. Scott) and the gentleman from Illinois (Mr. Roskam) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Georgia.


                             General Leave

  Mr. SCOTT of Georgia. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks and insert extraneous material on this legislation and on 
H.R. 3526, as amended.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Georgia?
  There was no objection.
  Mr. SCOTT of Georgia. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, this bill, H.R. 3505, is the Securities Law Technical 
Corrections Act, and it consists entirely of technical and clerical 
amendments to the Federal securities laws which were requested by the 
Securities and Exchange Commission as a minor part of a larger 
legislative agenda. Included are the Security Act of 1934, the 
Investment Act of 1940 and the Trust Indenture Act of 1939.
  Mr. Speaker, periodically we in Congress should review our laws in 
order to make sure that they are current and that they are up to date. 
Furthermore, this bill addresses certain changes to be made to reduce 
confusion. We want to ensure that the laws we pass are current, and 
periodically clarifying certain aspects of these somewhat complex and 
complicated laws is a very valuable undertaking.
  The amendments made by this bill correct drafting errors and remove 
obsolete references to the Public Utilities Holding Company Act of 
1935, which was repealed in 2005. It further corrects numbering and 
punctuation errors. There are several technical changes that need to be 
made to the bill, as introduced, one to correct statutory citations and 
punctuation and also for clarification.
  Mr. Speaker, as security laws are very complicated, very complex and 
highly technical, and with many of these laws having been written in 
the 1930s and the 1940s, periodic overview is very, very important and 
essential to the financial security of our great Nation, and this, Mr. 
Speaker, is the purpose of this bill.
  Mr. Speaker, I reserve the balance of my time.
  Mr. ROSKAM. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise today in strong support of H.R. 3505, the 
Securities Law Technical Corrections Act of 2007, a measure to make 
technical corrections to the various securities laws, and I thank Mr. 
Scott for his support for this measure and also Chairman Frank and 
Ranking Member Bachus for advocating that this come to the floor today.
  Mr. Speaker, in the aftermath of the stock market crash of 1929 and 
the ensuing Great Depression, Congress enacted the Federal securities 
laws of the 1930s and the 1940s. Over many years, Congress has amended 
these laws to adopt innovation and growth in the securities industry. 
Securities laws have become incredibly complex and technical due to the 
intricate and global markets we have today.
  The goal of these laws is to protect investors, maintain fair, 
orderly and efficient markets, and to facilitate capital formation and 
promote competition. These laws range from governing over the initial 
issuance and registration of securities to the oversight of financial 
reporting and registration of people involved in the sale of 
securities. The laws also regulate the purchase and sale of securities, 
securities

[[Page 32204]]

brokerage firms and securities exchanges, and they also have been 
responsible for the rules of the creation and operation of mutual funds 
and those laws governing the operation of investment advisors, all good 
things.
  As Members of Congress, we have a responsibility to review laws that 
we pass to ensure that they are current and that they are up to date. 
Most importantly, Congress needs to clarify that these laws are well-
crafted so that agencies who administer and enforce them are able to do 
so without causing unnecessary confusion to investors, to market 
participants and the courts.
  Keeping the security laws current is a worthwhile undertaking. One 
such example where there is need to update our securities laws which 
are included in this legislation is to address the repeal of the Public 
Utility Holding Company Act of 1935. It was repealed, as Mr. Scott 
mentioned, in the 2005 energy bill because it was no longer necessary.
  But it was originally adopted to deal with circumstances that existed 
in the 1930s and 1940s when the commission was restructuring the 
utility industry. At that point, a number of holding companies would 
have owned minority stakes in utilities and other holding companies and 
they may have held substantial equity assets that caused them to meet 
the investment company definition at that time.
  Today, virtually all utility holding companies operate throughout 
wholly owned subsidiaries and, thus, do not have investment company 
status issues any different from any other type of holding company. So 
utility holding companies no longer need to be treated differently than 
any other type of company for purposes of determining whether they meet 
the definition of investment company.
  H.R. 3505 makes almost 50 technical changes to the Federal securities 
laws. Mr. Speaker, I want to note that the Securities and Exchange 
Commission supports these changes.
  Once again I want to thank my colleague Mr. Scott, along with Ranking 
Member Bachus and our chairman, Chairman Frank, for their support of 
this legislation, and I urge all of our colleagues to support it.
  Mr. Speaker, I yield back the balance of my time.
  Mr. SCOTT of Georgia. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I too want to thank my colleague Mr. Roskam for his hard 
work on this bill and for his contribution, and also the leadership of 
our Financial Services Committee under the chairmanship of Chairman 
Barney Frank for his work on this measure as well.
  Mr. Speaker, I have no further requests for time, and I yield back 
the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Georgia (Mr. Scott) that the House suspend the rules and 
pass the bill, H.R. 3505, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. SCOTT of Georgia. Mr. Speaker, on that I demand the yeas and 
nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.

                          ____________________