[House Report 115-1076]
[From the U.S. Government Publishing Office]
115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 115-1076
======================================================================
HELPING STARTUPS CONTINUE TO GROW ACT
_______
December 12, 2018.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Hensarling, from the Committee on Financial Services, submitted the
following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 6130]
[Including cost estimate of the Congressional Budget Office]
The Committee on Financial Services, to whom was referred
the bill (H.R. 6130) to provide for a 5 year extension of
certain exemptions and reduced disclosure requirements for
companies that were emerging growth companies and would
continue to be emerging growth companies but for the 5-year
restriction on emerging growth companies, and for other
purposes, having considered the same, report favorably thereon
without amendment and recommend that the bill do pass.
Purpose and Summary
On June 15, 2018, Representative Keith Rothfus introduced
H.R. 6130, the ``Helping Startups Continue to Grow Act''. H.R.
6130 expands the on-ramp for emerging growth companies (EGCs)
created by Title I of the Jumpstart Our Business Startups
(JOBS) Act (P.L. 112-106). H.R. 6130 provides EGCs an
additional five years of exemptions from certain disclosure
requirements. The expansion is limited to EGCs that, after five
years as an EGC, would continue to qualify as such but for the
five-year restriction on EGC status.
Background and Need for Legislation
Title I of the Jumpstart Our Small Businesses (JOBS) Act
established a new category of issuers known as Emerging Growth
Companies (EGCs). These issuers must have less than $1 billion
in annual revenues or $700 million in public float when they
register with the Securities and Exchange Commission (SEC).
These companies are given up to five years on an ``on-ramp'' to
comply with certain regulatory requirements. By granting these
issuers temporary on-ramp status, Title I encourages small
companies to go public while ensuring that their move to full
compliance with regulatory requirements is tailored as they
grow large enough to sustain the compliance infrastructure
typical of mature entities.
The goal of H.R. 6130 is to allow these EGCs to direct
their financial and human resources towards growing their
company, which will ultimately help their employees, investors
and the economy, rather than expend internal and external
resources on disclosure requirements that such companies and
investors in such companies routinely have said are immaterial
to why investors invest in EGCs.
The five-year on-ramp has been very helpful to EGCsthat are
looking to reduce their initial post-initial public offering
(IPO) legal, audit and compliance costs. According to a recent
study conducted by Ernst and Young, many companies found
provisions of the on-ramp helpful:
87 percent of the firms that filed for IPO
status identified as EGCs under the IPO on-ramp;
88 percent used the confidential review
accommodation;
96 percent provided reduced executive
compensation disclosures;
69 percent provided only the two years of
required audited financial statements for EGCs; and
15 percent adopted new accounting standards
using delayed private company effective dates.
However, despite the effectiveness of the on-ramp provision
in Title I of the JOBS Act, many companies do not generate
enough revenue after five years to comply with the litany of
regulatory requirements for public companies. As an example,
many biotech companies are still pre-revenue at five years, and
to require those companies to comply with these regulations
would divert important, limited resources away from research
and innovation. Congress can, and should, review the
improvements the JOBS Act made to tailor regulatory
requirements for EGCs and enhance how the on-ramp is tailored
to match how such companies are growing since the JOBS Act was
enacted more than half a decade ago.
H.R. 6310 addresses this problem in part by extending the
exemption for certain JOBS Act Title I on-ramp provisions from
five to ten years. The legislation provides the following
extensions beyond five-years:
Streamlined financial disclosures--i.e.,
that like smaller reporting companies, only 2 years of
audited financial statements--instead of 3--be
presented for the registration statement of an EGC with
respect to an IPO to be effective; that for any other
registration statement filed by the EGC, selected
financial data need not be provided for any period
prior to the earliest audited period represented in
connection with its IPO--instead of the customary full
5 years; and that an EGC's timeframe for complying with
new accounting standards is the same timeline as for
when a private company must comply, rather than the
timeframe for larger issuers.
Filing draft IPO registration statements and
subsequent registration statements on a confidential
basis to the SEC for agency review;
Simplified executive compensation disclosure
such that EGCs would abide by the disclosure
requirements for smaller reporting companies; and
Exemption from say on pay (allowing advisory
shareholder votes on the compensation of its named
executive officers), say on frequency, say on golden
parachute votes, pay for performance disclosure and
``pay ratio'' disclosure.''
In testimony before the Subcommittee on Capital Markets,
Securities, and Investment on May 23, 2018, Brian Hahn, Chief
Financial Officer of GlycoMimetrics, Inc.--which is an EGC,
explained the regulatory burdens placed on biotech companies:
More than 260 biotechs have gone public since the
JOBS Act was enacted, and a majority of these companies
are still in the lab and years away from getting their
drug approved and becoming a profitable company. It is
counterproductive for them to face a full-blown
compliance burden identical to those faced by large,
multi-national revenue-generating company.
Subsequently, in a June 20, 2018 letter to Congress, the
Biotechnology Industry Organization (BIO) elaborated on why
this legislation is important:
As helpful as [the] five-year exemption is, the
biotech development timeline is a decades-long affair.
Private emerging companies working on innovative
therapeutics are highly dependent on access to capital.
More than 95% of these companies are in the research
and development stage without an FDA approved product.
. . . Developing a single therapy requires an average
investment ranging from $1.2 billion to over $2
billion, and the clinical testing period alone consumes
a decade or more. During this development stage,
companies do not have a product to generate revenue and
are dependent on capital markets to fund clinical
trials. Every dollar dedicated to unnecessary
regulatory buderns is a dollar taken from science. . .
.
Expanding the exemption from these disclosure
requirements for EGCs for another five years will
enable biotech companies to continue focusing on
advancing their research. . . . (emphasis added)
In short, the vast majority of EGCs have taken advantage of
the provisions that would be extended under this bill for
certain EGCs, which has helped lead to a post-JOBS Act increase
in the public offering market. Accordingly, this bill would
provide companies a further incentive to go public by allowing
for companies that are still looking to grow and otherwise
still qualify as an EGC to not have to divert necessary
resources towards regulatory compliance.
As the Small Business Entrepreneurship Council wrote to
Congress on June 21, 2018:
Given the reduced level of entrepreneurship over the
past decade or more, and the need for more high-growth
firms that yield quality job opportunities and
innovations for our economy, our policies must reflect
a commitment to enabling and building these firms. The
``Helping Startups Continue to Grow Act'' will do just
that.
Nonetheless, whether an EGC takes advantage of these scaled
processes is entirely optional. If an EGC believes it is in its
interest to accelerate its status, it may do so. Further, an
EGC must disclose its status and certain risk factors related
to some of these options should it choose to take advantage of
these streamlined methods--meaning that investors can evaluate
whether they wish to invest in a company that still is on the
on-ramp, and EGCs can decide whether the burdens of getting on
the highway outweigh the potential for less investor interest.
To treat all companies as if they have been in existence for
more than 100 years or as a member of the Dow Jones Industrial
Average or the S&P 500 index or have the financial resources to
pay for attorneys, auditors, management consultants and
information technology professionals would be to fundamentally
misunderstand the life-cycle of public companies. Rather than
mandate the same regulatory regime for all companies and impose
disproportionate burdens on companies that often still are pre-
revenue beyond five years post-offering, the expanded on-ramp
provided by H.R. 6130 will allow a company and the capital
markets to dictate how an EGC can best provide current and
potential investors with information necessary to make an
informed investment decision.
Hearings
The Committee on Financial Services held a hearing
examining matters relating to H.R. 6130 on May 23, 2018.
Committee Consideration
The Committee on Financial Services met in open session on
June 21, 2018, and ordered H.R. 6130 to be reported favorably
to the House without amendment by a recorded vote of 32 yeas to
23 nays (recorded vote no. FC-190), a quorum being present. An
amendment offered by Representative Ellison was not agreed to
by voice vote.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. The
sole recorded vote was on a motion by Chairman Hensarling to
report the bill favorably to the House without amendment. The
motion was agreed to by a recorded vote of 32 yeas to 23 nays
(Record vote no. FC-190), a quorum being present.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Committee Oversight Findings
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
Performance Goals and Objectives
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee states that H.R. 6130
will reduce regulatory compliance costs for EGCs by extending
the exemption for certain JOBS Act Title I on-ramp provisions.
New Budget Authority, Entitlement Authority, and Tax Expenditures
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
Congressional Budget Office Estimates
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, September 27, 2018.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 6130, the Helping
Startups Continue to Grow Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Stephen
Rabent.
Sincerely,
Keith Hall,
Director.
Enclosure.
H.R. 6130--Helping Startups Continue to Grow Act
Under current law, a business that has issued or proposes
to issue stock and that has had total annual gross revenues of
less than $1.07 billion during its most recently completed
fiscal year is considered an emerging growth company and may
retain that designation for up to five years. Emerging growth
companies are exempt from certain disclosure rules of the
Securities and Exchange Commission (SEC).
H.R. 6130 would establish a new designation--recent
emerging growth company--that would confer an additional five-
year exemption from many of those disclosure rules as long as a
company continued to qualify on the basis of the other
criteria.
Using information from the SEC, CBO estimates that
implementing H.R. 6130 would cost less than $500,000 for the
agency to amend its rules to establish the new designation.
However, the SEC is authorized to collect fees sufficient to
offset its annual appropriation; therefore, CBO estimates that
the net effect on discretionary spending would be negligible,
assuming appropriation actions consistent with that authority.
Enacting H.R. 6130 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
CBO estimates that enacting H.R. 6130 would not increase
net direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2029.
H.R. 6130 contains no intergovernmental mandates as defined
in the Unfunded Mandates Reform Act (UMRA).
If the SEC increased fees to offset the costs associated
with implementing the bill, H.R. 6130 would increase the cost
of an existing mandate on private entities required to pay
those assessments. CBO estimates that the incremental cost of
the mandate would be less than $500,000, well below the annual
threshold for private-sector mandates established in UMRA ($160
million in 2018, adjusted annually for inflation).
The CBO staff contacts for this estimate are Stephen Rabent
(for federal costs) and Rachel Austin (for mandates). The
estimate was reviewed by H. Samuel Papenfuss, Deputy Assistant
Director for Budget Analysis.
Federal Mandates Statement
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995.
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
Advisory Committee Statement
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
Applicability To Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of the section
102(b)(3) of the Congressional Accountability Act.
Earmark Identification
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
Duplication of Federal Programs
In compliance with clause 3(c)(5) of rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program; (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139; or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
Disclosure of Directed Rulemaking
Pursuant to section 3(i) of H. Res. 5, (115th Congress),
the following statement is made concerning directed rule
makings: The Committee estimates that the bill requires no
directed rule makings within the meaning of such section.
Section-by-Section Analysis of the Legislation
Section 1. Short title
This section cites H.R. 6130 as the ``Helping Startups
Continue to Grow Act''.
Section 2. On-ramp exemption
This section provides for a 5 year extension of certain
exemptions and reduced disclosure requirements for companies
that were emerging growth companies and would continue to be
emerging growth companies but for the 5-year restriction.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, and existing law in which no
change is proposed is shown in roman):
SECURITIES ACT OF 1933
* * * * * * *
TITLE I--
* * * * * * *
definitions
Sec. 2. (a) Definitions.--When used in this title, unless the
context otherwise requires--
(1) The term ``security'' means any note, stock,
treasury stock, security future, security-based swap,
bond, debenture, evidence of indebtedness, certificate
of interest or participation in any profit-sharing
agreement, collateral-trust certificate,
preorganization certificate or subscription,
transferable share, investment contract, voting-trust
certificate, certificate of deposit for a security,
fractional undivided interest in oil, gas, or other
mineral rights, any put, call, straddle, option, or
privilege on any security, certificate of deposit, or
group or index of securities (including any interest
therein or based on the value thereof), or any put,
call, straddle, option, or privilege entered into on a
national securities exchange relating to foreign
currency, or, in general, any interest or instrument
commonly known as a ``security'', or any certificate of
interest or participation in, temporary or interim
certificate for, receipt for, guarantee of, or warrant
or right to subscribe to or purchase, any of the
foregoing.
(2) The term ``person'' means an individual, a
corporation, a partnership, an association, a joint-
stock company, a trust, any unincorporated
organization, or a government or political subdivision
thereof. As used in this paragraph the term ``trust''
shall include only a trust where the interest or
interests of the beneficiary or beneficiaries are
evidenced by a security.
(3) The term ``sale'' or ``sell'' shall include every
contract of sale or disposition of a security or
interest in a security, for value. The term ``offer to
sell'', ``offer for sale'', or ``offer'' shall include
every attempt or offer to dispose of, or solicitation
of an offer to buy, a security or interest in a
security, for value. The terms defined in this
paragraph and the term ``offer to buy'' as used in
subsection (c) of section 5 shall not include
preliminary negotiations or agreements between an
issuer (or any person directly or indirectly
controlling or controlled by an issuer, or under direct
or indirect common control with an issuer) and any
underwriter or among underwriters who are or are to be
in privity of contract with an issuer (or any person
directly or indirectly controlling or controlled by an
issuer, or under direct or indirect common control with
an issuer). Any security given or delivered with, or as
a bonus on account of, any purchase of securities or
any other thing, shall be conclusively presumed to
constitute a part of the subject of such purchase and
to have been offered and sold for value. The issue or
transfer of a right or privilege, when originally
issued or transferred with a security, giving the
holder of such security the right to convert such
security into another security of the same issuer or of
another person, or giving a right to subscribe to
another security of the same issuer or of another
person, which right cannot be exercised until some
future date, shall not be deemed to be an offer or sale
of such other security; but the issue or transfer of
such other security upon the exercise of such right of
conversion or subscription shall be deemed a sale of
such other security. Any offer or sale of a security
futures product by or on behalf of the issuer of the
securities underlying the security futures product, an
affiliate of the issuer, or an underwriter, shall
constitute a contract for sale of, sale of, offer for
sale, or offer to sell the underlying securities. Any
offer or sale of a security-based swap by or on behalf
of the issuer of the securities upon which such
security-based swap is based or is referenced, an
affiliate of the issuer, or an underwriter, shall
constitute a contract for sale of, sale of, offer for
sale, or offer to sell such securities. The publication
or distribution by a broker or dealer of a research
report about an emerging growth company that is the
subject of a proposed public offering of the common
equity securities of such emerging growth company
pursuant to a registration statement that the issuer
proposes to file, or has filed, or that is effective
shall be deemed for purposes of paragraph (10) of this
subsection and section 5(c) not to constitute an offer
for sale or offer to sell a security, even if the
broker or dealer is participating or will participate
in the registered offering of the securities of the
issuer. As used in this paragraph, the term ``research
report'' means a written, electronic, or oral
communication that includes information, opinions, or
recommendations with respect to securities of an issuer
or an analysis of a security or an issuer, whether or
not it provides information reasonably sufficient upon
which to base an investment decision.
(4) The term ``issuer'' means every person who issues
or proposes to issue any security; except that with
respect to certificates of deposit, voting-trust
certificates, or collateral-trust certificates, or with
respect to certificates of interest or shares in an
unincorporated investment trust not having a board of
directors (or persons performing similar functions) or
of the fixed, restricted management, or unit type, the
term ``issuer'' means the person or persons performing
the acts and assuming the duties of depositor or
manager pursuant to the provisions of the trust or
other agreement or instrument under which such
securities are issued; except that in the case of an
unincorporated association which provides by its
articles for limited liability of any or all of its
members, or in the case of a trust, committee, or other
legal entity, the trustees or members thereof shall not
be individually liable as issuers of any security
issued by the association, trust, committee, or other
legal entity; except that with respect to equipment-
trust certificates or like securities, the term
``issuer'' means the person by whom the equipment or
property is or is to be used; and except that with
respect to fractional undivided interests in oil, gas,
or other mineral rights, the term ``issuer'' means the
owner of any such right or of any interest in such
right (whether whole or fractional) who creates
fractional interests therein for the purpose of public
offering.
(5) The term ``Commission'' means the Securities and
Exchange Commission.
(6) The term ``Territory'' means Puerto Rico, the
Virgin Islands, and the insular possessions of the
United States.
(7) The term ``interstate commerce'' means trade or
commerce in securities or any transportation or
communication relating thereto among the several States
or between the District of Columbia or any Territory of
the United States and any State or other Territory, or
between any foreign country and any State, Territory,
or the District of Columbia, or within the District of
Columbia.
(8) The term ``registration statement'' means the
statement provided for in section 6, and includes any
amendment thereto and any report, document, or
memorandum filed as part of such statement or
incorporated therein by reference.
(9) The term ``write'' or ``written'' shall include
printed, lithographed, or any means of graphic
communication.
(10) The term ``prospectus'' means any prospectus,
notice, circular, advertisement, letter, or
communication, written or by radio or television, which
offers any security for sale or confirms the sale of
any security; except that (a) a communication sent or
given after the effective date of the registration
statement (other than a prospectus permitted under
subsection (b) of section 10) shall not be deemed a
prospectus if it is proved that prior to or at the same
time with such communication a written prospectus
meeting the requirements of subsection (a) of section
10 at the time of such communication was sent or given
to the person to whom the communication was made, and
(b) a notice, circular, advertisement, letter, or
communication in respect of a security shall not be
deemed to be a prospectus if it states from whom a
written prospectus meeting the requirements of section
10 may be obtained and, in addition, does no more than
identify the security, state the price thereof, state
by whom orders will be executed, and contain such other
information as the Commission, by rules or regulations
deemed necessary or appropriate in the public interest
and for the protection of investors, and subject to
such terms and conditions as may be prescribed therein,
may permit.
(11) The term ``underwriter'' means any person who
has purchased from an issuer with a view to, or offers
or sells for an issuer in connection with, the
distribution of any security, or participates or has a
direct or indirect participation in any such
undertaking, or participates or has a participation in
the direct or indirect underwriting of any such
undertaking; but such term shall not include a person
whose interest is limited to a commission from an
underwriter or dealer not in excess of the usual and
customary distributors' or sellers' commission. As used
in this paragraph the term ``issuer'' shall include, in
addition to an issuer, any person directly or
indirectly controlling or controlled by the issuer, or
any person under direct or indirect common control with
the issuer.
(12) The term ``dealer'' means any person who engages
either for all or part of his time, directly or
indirectly, as agent, broker, or principal, in the
business of offering, buying, selling, or otherwise
dealing or trading in securities issued by another
person.
(13) The term ``insurance company'' means a company
which is organized as an insurance company, whose
primary and predominant business activity is the
writing of insurance or the reinsuring of risks
underwritten by insurance companies, and which is
subject to supervision by the insurance commissioner,
or a similar official or agency, of a State or
territory or the District of Columbia; or any receiver
or similar official or any liquidating agent for such
company, in his capacity as such.
(14) The term ``separate account'' means an account
established and maintained by an insurance company
pursuant to the laws of any State or territory of the
United States, the District of Columbia, or of Canada
or any province thereof, under which income, gains and
losses, whether or not realized, from assets allocated
to such account, are, in accordance with the applicable
contract, credited to or charged against such account
without regard to other income, gains, or losses of the
insurance company.
(15) The term ``accredited investor'' shall mean--
(i) a bank as defined in section 3(a)(2)
whether acting in its individual or fiduciary
capacity; an insurance company as defined in
paragraph (13) of this subsection; an
investment company registered under the
Investment Company Act of 1940 or a business
development company as defined in section
2(a)(48) of that Act; a Small Business
Investment Company licensed by the Small
Business Administration; or an employee benefit
plan, including an individual retirement
account, which is subject to the provisions of
the Employee Retirement Income Security Act of
1974, if the investment decision is made by a
plan fiduciary, as defined in section 3(21) of
such Act, which is either a bank, insurance
company, or registered investment adviser; or
(ii) any person who, on the basis of such
factors as financial sophistication, net worth,
knowledge, and experience in financial matters,
or amount of assets under management qualifies
as an accredited investor under rules and
regulations which the Commission shall
prescribe.
(16) The terms ``security future'', ``narrow-based
security index'', and ``security futures product'' have
the same meanings as provided in section 3(a)(55) of
the Securities Exchange Act of 1934.
(17) The terms ``swap'' and ``security-based swap''
have the same meanings as in section 1a of the
Commodity Exchange Act (7 U.S.C. 1a).
(18) The terms ``purchase'' or ``sale'' of a
security-based swap shall be deemed to mean the
execution, termination (prior to its scheduled maturity
date), assignment, exchange, or similar transfer or
conveyance of, or extinguishing of rights or
obligations under, a security-based swap, as the
context may require.
(19) The term ``emerging growth company'' means an
issuer that had total annual gross revenues of less
than $1,000,000,000 (as such amount is indexed for
inflation every 5 years by the Commission to reflect
the change in the Consumer Price Index for All Urban
Consumers published by the Bureau of Labor Statistics,
setting the threshold to the nearest 1,000,000) during
its most recently completed fiscal year. An issuer that
is an emerging growth company as of the first day of
that fiscal year shall continue to be deemed an
emerging growth company until the earliest of--
(A) the last day of the fiscal year of the
issuer during which it had total annual gross
revenues of $1,000,000,000 (as such amount is
indexed for inflation every 5 years by the
Commission to reflect the change in the
Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics,
setting the threshold to the nearest 1,000,000)
or more;
(B) the last day of the fiscal year of the
issuer following the fifth anniversary of the
date of the first sale of common equity
securities of the issuer pursuant to an
effective registration statement under this
title;
(C) the date on which such issuer has, during
the previous 3-year period, issued more than
$1,000,000,000 in non-convertible debt; or
(D) the date on which such issuer is deemed
to be a ``large accelerated filer'', as defined
in section 240.12b-2 of title 17, Code of
Federal Regulations, or any successor thereto.
(20) Recent emerging growth company.--The term
``recent emerging growth company'' means an issuer
that--
(A) was, but is no longer, an emerging growth
company;
(B) would continue to be an emerging growth
company but for the application of subparagraph
(B) of paragraph (19); and
(C) ceased to be an emerging growth company
within the previous 5-year period.
(b) Consideration of Promotion of Efficiency, Competition,
and Capital Formation.--Whenever pursuant to this title the
Commission is engaged in rulemaking and is required to
consider or determine whether an action is necessary or
appropriate in the public interest, the Commission shall also
consider, in addition to the protection of investors, whether
the action will promote efficiency, competition, and capital
formation.
* * * * * * *
registration of securities and signing of registration statement
Sec. 6. (a) Any security may be registered with the
Commission under the terms and conditions hereinafter provided,
by filing a registration statement in triplicate, at least one
of which shall be signed by each issuer, its principal
executive officer or officers, its principal financial officer,
its comptroller or principal accounting officer, and the
majority of its board of directors or persons performing
similar functions (or, if there is no board of directors or
persons performing similar functions, by the majority of the
persons or board having the power of management of the issuer),
and in case the issuer is a foreign or Territorial person by
its duly authorized representative in the United States; except
that when such registration statement relates to a security
issued by a foreign government, or political subdivision
thereof, it need be signed only by the underwriter of such
security. Signatures of all such persons when written on the
said registration statements shall be presumed to have been so
written by authority of the person whose signature is so
affixed and the burden of proof, in the event such authority
shall be denied, shall be upon the party denying the same. The
affixing of any signature without the authority of the
purported signer shall constitute a violation of this title. A
registration statement shall be deemed effective only as to the
securities specified therein as proposed to be offered.
(b) Registration Fee.--
(1) Fee payment required.--At the time of filing a
registration statement, the applicant shall pay to the
Commission a fee at a rate that shall be equal to $92
per $1,000,000 of the maximum aggregate price at which
such securities are proposed to be offered, except that
during fiscal year 2003 and any succeeding fiscal year
such fee shall be adjusted pursuant to paragraph (2).
(2) Annual adjustment.--For each fiscal year, the
Commission shall by order adjust the rate required by
paragraph (1) for such fiscal year to a rate that, when
applied to the baseline estimate of the aggregate
maximum offering prices for such fiscal year, is
reasonably likely to produce aggregate fee collections
under this subsection that are equal to the target fee
collection amount for such fiscal year.
(3) Pro rata application.--The rates per $1,000,000
required by this subsection shall be applied pro rata
to amounts and balances of less than $1,000,000.
(4) Review and effective date.--In exercising its
authority under this subsection, the Commission shall
not be required to comply with the provisions of
section 553 of title 5, United States Code. An adjusted
rate prescribed under paragraph (2) and published under
paragraph (5) shall not be subject to judicial review.
An adjusted rate prescribed under paragraph (2) shall
take effect on the first day of the fiscal year to
which such rate applies.
(5) Publication.--The Commission shall publish in the
Federal Register notices of the rate applicable under
this subsection and under sections 13(e) and 14(g) for
each fiscal year not later than August 31 of the fiscal
year preceding the fiscal year to which such rate
applies, together with any estimates or projections on
which such rate is based.
(6) Definitions.--For purposes of this subsection:
(A) Target offsetting collection amount.--The
target fee collection amount for each fiscal
year is determined according to the following
table:
Target fee
Fiscal year: collection amount
2002.................................................... $377,000,000
2003.................................................... $435,000,000
2004.................................................... $467,000,000
2005.................................................... $570,000,000
2006.................................................... $689,000,000
2007.................................................... $214,000,000
2008.................................................... $234,000,000
2009.................................................... $284,000,000
2010.................................................... $334,000,000
2011.................................................... $394,000,000
2012.................................................... $425,000,000
2013.................................................... $455,000,000
2014.................................................... $485,000,000
2015.................................................... $515,000,000
2016.................................................... $550,000,000
2017.................................................... $585,000,000
2018.................................................... $620,000,000
2019.................................................... $660,000,000
2020.................................................... $705,000,000
2021 and each fiscAn amount that is equal to the target fee collection
amount for the prior fiscal year, adjusted by the
rate of inflation.
(B) Baseline estimate of the aggregate
maximum offering prices.--The baseline estimate
of the aggregate maximum offering prices for
any fiscal year is the baseline estimate of the
aggregate maximum offering price at which
securities are proposed to be offered pursuant
to registration statements filed with the
Commission during such fiscal year as
determined by the Commission, after
consultation with the Congressional Budget
Office and the Office of Management and Budget,
using the methodology required for projections
pursuant to section 257 of the Balanced Budget
and Emergency Deficit Control Act of 1985.
(c) The filing with the Commission of a registration
statement, or of an amendment to a registration statement,
shall be deemed to have taken place upon the receipt thereof,
but the filing of a registration statement shall not be deemed
to have taken place unless it is accompanied by a United States
postal money order or a certified bank check or cash for the
amount of the fee required under subsection (b).
(d) The information contained in or filed with any
registration statement shall be made available to the public
under such regulations as the Commission may prescribe, and
copies thereof, photostatic or otherwise, shall be furnished to
every applicant at such reasonable charge as the Commission may
prescribe.
(e) Emerging Growth Companies.--
(1) In general.--Any [emerging growth company]
emerging growth company or recent emerging growth
company, prior to its initial public offering date, may
confidentially submit to the Commission a draft
registration statement, for confidential nonpublic
review by the staff of the Commission prior to public
filing, provided that the initial confidential
submission and all amendments thereto shall be publicly
filed with the Commission not later than 15 days before
the date on which the issuer conducts a road show, as
such term is defined in section 230.433(h)(4) of title
17, Code of Federal Regulations, or any successor
thereto. An issuer that was an [emerging growth
company] emerging growth company or recent emerging
growth company at the time it submitted a confidential
registration statement or, in lieu thereof, a publicly
filed registration statement for review under this
subsection but ceases to be an [emerging growth
company] emerging growth company or recent emerging
growth company thereafter shall continue to be treated
as an emerging market growth company for the purposes
of this subsection through the earlier of the date on
which the issuer consummates its initial public
offering pursuant to such registrations statement or
the end of the 1-year period beginning on the date the
company ceases to be an [emerging growth company]
emerging growth company or recent emerging growth
company.
(2) Confidentiality.--Notwithstanding any other
provision of this title, the Commission shall not be
compelled to disclose any information provided to or
obtained by the Commission pursuant to this subsection.
For purposes of section 552 of title 5, United States
Code, this subsection shall be considered a statute
described in subsection (b)(3)(B) of such section 552.
Information described in or obtained pursuant to this
subsection shall be deemed to constitute confidential
information for purposes of section 24(b)(2) of the
Securities Exchange Act of 1934.
information required in registration statement
Sec. 7.
(a) Information Required in Registration Statement.--
(1) In general.--The registration statement, when
relating to a security other than a security issued by
a foreign government, or political subdivision thereof,
shall contain the information, and be accompanied by
the documents, specified in Schedule A, and when
relating to a security issued by a foreign government,
or political subdivision thereof, shall contain the
information, and be accompanied by the documents,
specified in Schedule B; except that the Commission may
by rules or regulations provide that any such
information or document need not be included in respect
of any class of issuers or securities if it finds that
the requirement of such information or document is
inapplicable to such class and that disclosure fully
adequate for the protection of investors is otherwise
required to be included within the registration
statement. If any accountant, engineer, or appraiser,
or any person whose profession gives authority to a
statement made by him, is named as having prepared or
certified any part of the registration statement, or is
named as having prepared or certified a report or
valuation for use in connection with the registration
statement, the written consent of such person shall be
filed with the registration statement. If any such
person is named as having prepared or certified a
report or valuation (other than a public official
document or statement) which is used in connection with
the registration statement, but is not named as having
prepared or certified such report or valuation for use
in connection with the registration statement, the
written consent of such person shall be filed with the
registration statement unless the Commission dispenses
with such filing as impracticable or as involving undue
hardship on the person filing the registration
statement. Any such registration statement shall
contain such other information, and be accompanied by
such other documents, as the Commission may by rules or
regulations require as being necessary or appropriate
in the public interest or for the protection of
investors.
(2) Treatment of emerging growth companies.--An
emerging growth company and a recent emerging growth
company--
(A) need not present more than 2 years of
audited financial statements in order for the
registration statement of [such emerging growth
company] such company with respect to an
initial public offering of its common equity
securities to be effective, and in any other
registration statement to be filed with the
Commission, [an emerging growth company] such
company need not present selected financial
data in accordance with section 229.301 of
title 17, Code of Federal Regulations, for any
period prior to the earliest audited period
presented in connection with its initial public
offering; and
(B) may not be required to comply with any
new or revised financial accounting standard
until such date that a company that is not an
issuer (as defined under section 2(a) of the
Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(a)))
is required to comply with such new or revised
accounting standard, if such standard applies
to companies that are not issuers.
(b)(1) The Commission shall prescribe special rules with
respect to registration statements filed by any issuer that is
a blank check company. Such rules may, as the Commission
determines necessary or appropriate in the public interest or
for the protection of investors--
(A) require such issuers to provide timely
disclosure, prior to or after such statement becomes
effective under section 8, of (i) information regarding
the company to be acquired and the specific application
of the proceeds of the offering, or (ii) additional
information necessary to prevent such statement from
being misleading;
(B) place limitations on the use of such proceeds and
the distribution of securities by such issuer until the
disclosures required under subparagraph (A) have been
made; and
(C) provide a right of rescission to shareholders of
such securities.
(2) The Commission may, as it determines consistent with the
public interest and the protection of investors, by rule or
order exempt any issuer or class of issuers from the rules
prescribed under paragraph (1).
(3) For purposes of paragraph (1) of this subsection, the
term ``blank check company'' means any development stage
company that is issuing a penny stock (within the meaning of
section 3(a)(51) of the Securities Exchange Act of 1934) and
that--
(A) has no specific business plan or purpose; or
(B) has indicated that its business plan is to merge
with an unidentified company or companies.
(c) Disclosure Requirements.--
(1) In general.--The Commission shall adopt
regulations under this subsection requiring each issuer
of an asset-backed security to disclose, for each
tranche or class of security, information regarding the
assets backing that security.
(2) Content of regulations.--In adopting regulations
under this subsection, the Commission shall--
(A) set standards for the format of the data
provided by issuers of an asset-backed
security, which shall, to the extent feasible,
facilitate comparison of such data across
securities in similar types of asset classes;
and
(B) require issuers of asset-backed
securities, at a minimum, to disclose asset-
level or loan-level data, if such data are
necessary for investors to independently
perform due diligence, including--
(i) data having unique identifiers
relating to loan brokers or
originators;
(ii) the nature and extent of the
compensation of the broker or
originator of the assets backing the
security; and
(iii) the amount of risk retention by
the originator and the securitizer of
such assets.
(d) Registration Statement for Asset-backed Securities.--Not
later than 180 days after the date of enactment of this
subsection, the Commission shall issue rules relating to the
registration statement required to be filed by any issuer of an
asset-backed security (as that term is defined in section
3(a)(77) of the Securities Exchange Act of 1934) that require
any issuer of an asset-backed security--
(1) to perform a review of the assets underlying the
asset-backed security; and
(2) to disclose the nature of the review under
paragraph (1).
* * * * * * *
----------
SECURITIES EXCHANGE ACT OF 1934
* * * * * * *
TITLE I--REGULATION OF SECURITIES EXCHANGES
* * * * * * *
definitions and application of title
Sec. 3. (a) When used in this title, unless the context
otherwise requires--
(1) The term ``exchange'' means any organization,
association, or group of persons, whether incorporated
or unincorporated, which constitutes, maintains, or
provides a market place or facilities for bringing
together purchasers and sellers of securities or for
otherwise performing with respect to securities the
functions commonly performed by a stock exchange as
that term is generally understood, and includes the
market place and the market facilities maintained by
such exchange.
(2) The term ``facility'' when used with respect to
an exchange includes its premises, tangible or
intangible property whether on the premises or not, any
right to the use of such premises or property or any
service thereof for the purpose of effecting or
reporting a transaction on an exchange (including,
among other things, any system of communication to or
from the exchange, by ticker or otherwise, maintained
by or with the consent of the exchange), and any right
of the exchange to the use of any property or service.
(3)(A) The term ``member'' when used with respect to
a national securities exchange means (i) any natural
person permitted to effect transactions on the floor of
the exchange without the services of another person
acting as broker, (ii) any registered broker or dealer
with which such a natural person is associated, (iii)
any registered broker or dealer permitted to designate
as a representative such a natural person, and (iv) any
other registered broker or dealer which agrees to be
regulated by such exchange and with respect to which
the exchange undertakes to enforce compliance with the
provisions of this title, the rules and regulations
thereunder, and its own rules. For purposes of sections
6(b)(1), 6(b)(4), 6(b)(6), 6(b)(7), 6(d), 17(d), 19(d),
19(e), 19(g), 19(h), and 21 of this title, the term
``member'' when used with respect to a national
securities exchange also means, to the extent of the
rules of the exchange specified by the Commission, any
person required by the Commission to comply with such
rules pursuant to section 6(f) of this title.
(B) The term ``member'' when used with respect to a
registered securities association means any broker or
dealer who agrees to be regulated by such association
and with respect to whom the association undertakes to
enforce compliance with the provisions of this title,
the rules and regulations thereunder, and its own
rules.
(4) Broker.--
(A) In general.--The term ``broker'' means
any person engaged in the business of effecting
transactions in securities for the account of
others.
(B) Exception for certain bank activities.--A
bank shall not be considered to be a broker
because the bank engages in any one or more of
the following activities under the conditions
described:
(i) Third party brokerage
arrangements.--The bank enters into a
contractual or other written
arrangement with a broker or dealer
registered under this title under which
the broker or dealer offers brokerage
services on or off the premises of the
bank if--
(I) such broker or dealer is
clearly identified as the
person performing the brokerage
services;
(II) the broker or dealer
performs brokerage services in
an area that is clearly marked
and, to the extent practicable,
physically separate from the
routine deposit-taking
activities of the bank;
(III) any materials used by
the bank to advertise or
promote generally the
availability of brokerage
services under the arrangement
clearly indicate that the
brokerage services are being
provided by the broker or
dealer and not by the bank;
(IV) any materials used by
the bank to advertise or
promote generally the
availability of brokerage
services under the arrangement
are in compliance with the
Federal securities laws before
distribution;
(V) bank employees (other
than associated persons of a
broker or dealer who are
qualified pursuant to the rules
of a self-regulatory
organization) perform only
clerical or ministerial
functions in connection with
brokerage transactions
including scheduling
appointments with the
associated persons of a broker
or dealer, except that bank
employees may forward customer
funds or securities and may
describe in general terms the
types of investment vehicles
available from the bank and the
broker or dealer under the
arrangement;
(VI) bank employees do not
receive incentive compensation
for any brokerage transaction
unless such employees are
associated persons of a broker
or dealer and are qualified
pursuant to the rules of a
self-regulatory organization,
except that the bank employees
may receive compensation for
the referral of any customer if
the compensation is a nominal
one-time cash fee of a fixed
dollar amount and the payment
of the fee is not contingent on
whether the referral results in
a transaction;
(VII) such services are
provided by the broker or
dealer on a basis in which all
customers that receive any
services are fully disclosed to
the broker or dealer;
(VIII) the bank does not
carry a securities account of
the customer except as
permitted under clause (ii) or
(viii) of this subparagraph;
and
(IX) the bank, broker, or
dealer informs each customer
that the brokerage services are
provided by the broker or
dealer and not by the bank and
that the securities are not
deposits or other obligations
of the bank, are not guaranteed
by the bank, and are not
insured by the Federal Deposit
Insurance Corporation.
(ii) Trust activities.--The bank
effects transactions in a trustee
capacity, or effects transactions in a
fiduciary capacity in its trust
department or other department that is
regularly examined by bank examiners
for compliance with fiduciary
principles and standards, and--
(I) is chiefly compensated
for such transactions,
consistent with fiduciary
principles and standards, on
the basis of an administration
or annual fee (payable on a
monthly, quarterly, or other
basis), a percentage of assets
under management, or a flat or
capped per order processing fee
equal to not more than the cost
incurred by the bank in
connection with executing
securities transactions for
trustee and fiduciary
customers, or any combination
of such fees; and
(II) does not publicly
solicit brokerage business,
other than by advertising that
it effects transactions in
securities in conjunction with
advertising its other trust
activities.
(iii) Permissible securities
transactions.--The bank effects
transactions in--
(I) commercial paper, bankers
acceptances, or commercial
bills;
(II) exempted securities;
(III) qualified Canadian
government obligations as
defined in section 5136 of the
Revised Statutes, in conformity
with section 15C of this title
and the rules and regulations
thereunder, or obligations of
the North American Development
Bank; or
(IV) any standardized, credit
enhanced debt security issued
by a foreign government
pursuant to the March 1989 plan
of then Secretary of the
Treasury Brady, used by such
foreign government to retire
outstanding commercial bank
loans.
(iv) Certain stock purchase plans.--
(I) Employee benefit plans.--
The bank effects transactions,
as part of its transfer agency
activities, in the securities
of an issuer as part of any
pension, retirement, profit-
sharing, bonus, thrift,
savings, incentive, or other
similar benefit plan for the
employees of that issuer or its
affiliates (as defined in
section 2 of the Bank Holding
Company Act of 1956), if the
bank does not solicit
transactions or provide
investment advice with respect
to the purchase or sale of
securities in connection with
the plan.
(II) Dividend reinvestment
plans.--The bank effects
transactions, as part of its
transfer agency activities, in
the securities of an issuer as
part of that issuer's dividend
reinvestment plan, if--
(aa) the bank does
not solicit
transactions or provide
investment advice with
respect to the purchase
or sale of securities
in connection with the
plan; and
(bb) the bank does
not net shareholders'
buy and sell orders,
other than for programs
for odd-lot holders or
plans registered with
the Commission.
(III) Issuer plans.--The bank
effects transactions, as part
of its transfer agency
activities, in the securities
of an issuer as part of a plan
or program for the purchase or
sale of that issuer's shares,
if--
(aa) the bank does
not solicit
transactions or provide
investment advice with
respect to the purchase
or sale of securities
in connection with the
plan or program; and
(bb) the bank does
not net shareholders'
buy and sell orders,
other than for programs
for odd-lot holders or
plans registered with
the Commission.
(IV) Permissible delivery of
materials.--The exception to
being considered a broker for a
bank engaged in activities
described in subclauses (I),
(II), and (III) will not be
affected by delivery of written
or electronic plan materials by
a bank to employees of the
issuer, shareholders of the
issuer, or members of affinity
groups of the issuer, so long
as such materials are--
(aa) comparable in
scope or nature to that
permitted by the
Commission as of the
date of the enactment
of the Gramm-Leach-
Bliley Act; or
(bb) otherwise
permitted by the
Commission.
(v) Sweep accounts.--The bank effects
transactions as part of a program for
the investment or reinvestment of
deposit funds into any no-load, open-
end management investment company
registered under the Investment Company
Act of 1940 that holds itself out as a
money market fund.
(vi) Affiliate transactions.--The
bank effects transactions for the
account of any affiliate of the bank
(as defined in section 2 of the Bank
Holding Company Act of 1956) other
than--
(I) a registered broker or
dealer; or
(II) an affiliate that is
engaged in merchant banking, as
described in section 4(k)(4)(H)
of the Bank Holding Company Act
of 1956.
(vii) Private securities offerings.--
The bank--
(I) effects sales as part of
a primary offering of
securities not involving a
public offering, pursuant to
section 3(b), 4(2), or 4(5) of
the Securities Act of 1933 or
the rules and regulations
issued thereunder;
(II) at any time after the
date that is 1 year after the
date of the enactment of the
Gramm-Leach-Bliley Act, is not
affiliated with a broker or
dealer that has been registered
for more than 1 year in
accordance with this Act, and
engages in dealing, market
making, or underwriting
activities, other than with
respect to exempted securities;
and
(III) if the bank is not
affiliated with a broker or
dealer, does not effect any
primary offering described in
subclause (I) the aggregate
amount of which exceeds 25
percent of the capital of the
bank, except that the
limitation of this subclause
shall not apply with respect to
any sale of government
securities or municipal
securities.
(viii) Safekeeping and custody
activities.--
(I) In general.--The bank, as
part of customary banking
activities--
(aa) provides
safekeeping or custody
services with respect
to securities,
including the exercise
of warrants and other
rights on behalf of
customers;
(bb) facilitates the
transfer of funds or
securities, as a
custodian or a clearing
agency, in connection
with the clearance and
settlement of its
customers' transactions
in securities;
(cc) effects
securities lending or
borrowing transactions
with or on behalf of
customers as part of
services provided to
customers pursuant to
division (aa) or (bb)
or invests cash
collateral pledged in
connection with such
transactions;
(dd) holds securities
pledged by a customer
to another person or
securities subject to
purchase or resale
agreements involving a
customer, or
facilitates the
pledging or transfer of
such securities by book
entry or as otherwise
provided under
applicable law, if the
bank maintains records
separately identifying
the securities and the
customer; or
(ee) serves as a
custodian or provider
of other related
administrative services
to any individual
retirement account,
pension, retirement,
profit sharing, bonus,
thrift savings,
incentive, or other
similar benefit plan.
(II) Exception for carrying
broker activities.--The
exception to being considered a
broker for a bank engaged in
activities described in
subclause (I) shall not apply
if the bank, in connection with
such activities, acts in the
United States as a carrying
broker (as such term, and
different formulations thereof,
are used in section 15(c)(3) of
this title and the rules and
regulations thereunder) for any
broker or dealer, unless such
carrying broker activities are
engaged in with respect to
government securities (as
defined in paragraph (42) of
this subsection).
(ix) Identified banking products.--
The bank effects transactions in
identified banking products as defined
in section 206 of the Gramm-Leach-
Bliley Act.
(x) Municipal securities.--The bank
effects transactions in municipal
securities.
(xi) De minimis exception.--The bank
effects, other than in transactions
referred to in clauses (i) through (x),
not more than 500 transactions in
securities in any calendar year, and
such transactions are not effected by
an employee of the bank who is also an
employee of a broker or dealer.
(C) Execution by broker or dealer.--The
exception to being considered a broker for a
bank engaged in activities described in clauses
(ii), (iv), and (viii) of subparagraph (B)
shall not apply if the activities described in
such provisions result in the trade in the
United States of any security that is a
publicly traded security in the United States,
unless--
(i) the bank directs such trade to a
registered broker or dealer for
execution;
(ii) the trade is a cross trade or
other substantially similar trade of a
security that--
(I) is made by the bank or
between the bank and an
affiliated fiduciary; and
(II) is not in contravention
of fiduciary principles
established under applicable
Federal or State law; or
(iii) the trade is conducted in some
other manner permitted under rules,
regulations, or orders as the
Commission may prescribe or issue.
(D) Fiduciary capacity.--For purposes of
subparagraph (B)(ii), the term ``fiduciary
capacity'' means--
(i) in the capacity as trustee,
executor, administrator, registrar of
stocks and bonds, transfer agent,
guardian, assignee, receiver, or
custodian under a uniform gift to minor
act, or as an investment adviser if the
bank receives a fee for its investment
advice;
(ii) in any capacity in which the
bank possesses investment discretion on
behalf of another; or
(iii) in any other similar capacity.
(E) Exception for entities subject to section
15(e).--The term ``broker'' does not include a
bank that--
(i) was, on the day before the date
of enactment of the Gramm-Leach-Bliley
Act, subject to section 15(e); and
(ii) is subject to such restrictions
and requirements as the Commission
considers appropriate.
(F) Joint rulemaking required.--The
Commission and the Board of Governors of the
Federal Reserve System shall jointly adopt a
single set of rules or regulations to implement
the exceptions in subparagraph (B).
(5) Dealer.--
(A) In general.--The term ``dealer'' means
any person engaged in the business of buying
and selling securities (not including security-
based swaps, other than security-based swaps
with or for persons that are not eligible
contract participants) for such person's own
account through a broker or otherwise.
(B) Exception for person not engaged in the
business of dealing.--The term ``dealer'' does
not include a person that buys or sells
securities (not including security-based swaps,
other than security-based swaps with or for
persons that are not eligible contract
participants) for such person's own account,
either individually or in a fiduciary capacity,
but not as a part of a regular business.
(C) Exception for certain bank activities.--A
bank shall not be considered to be a dealer
because the bank engages in any of the
following activities under the conditions
described:
(i) Permissible securities
transactions.--The bank buys or sells--
(I) commercial paper, bankers
acceptances, or commercial
bills;
(II) exempted securities;
(III) qualified Canadian
government obligations as
defined in section 5136 of the
Revised Statutes of the United
States, in conformity with
section 15C of this title and
the rules and regulations
thereunder, or obligations of
the North American Development
Bank; or
(IV) any standardized, credit
enhanced debt security issued
by a foreign government
pursuant to the March 1989 plan
of then Secretary of the
Treasury Brady, used by such
foreign government to retire
outstanding commercial bank
loans.
(ii) Investment, trustee, and
fiduciary transactions.--The bank buys
or sells securities for investment
purposes--
(I) for the bank; or
(II) for accounts for which
the bank acts as a trustee or
fiduciary.
(iii) Asset-backed transactions.--The
bank engages in the issuance or sale to
qualified investors, through a grantor
trust or other separate entity, of
securities backed by or representing an
interest in notes, drafts, acceptances,
loans, leases, receivables, other
obligations (other than securities of
which the bank is not the issuer), or
pools of any such obligations
predominantly originated by--
(I) the bank;
(II) an affiliate of any such
bank other than a broker or
dealer; or
(III) a syndicate of banks of
which the bank is a member, if
the obligations or pool of
obligations consists of
mortgage obligations or
consumer-related receivables.
(iv) Identified banking products.--
The bank buys or sells identified
banking products, as defined in section
206 of the Gramm-Leach-Bliley Act.
(6) The term ``bank'' means (A) a banking institution
organized under the laws of the United States or a
Federal savings association, as defined in section 2(5)
of the Home Owners' Loan Act, (B) a member bank of the
Federal Reserve System, (C) any other banking
institution or savings association, as defined in
section 2(4) of the Home Owners' Loan Act, whether
incorporated or not, doing business under the laws of
any State or of the United States, a substantial
portion of the business of which consists of receiving
deposits or exercising fiduciary powers similar to
those permitted to national banks under the authority
of the Comptroller of the Currency pursuant to the
first section of Public Law 87-722 (12 U.S.C. 92a), and
which is supervised and examined by State or Federal
authority having supervision over banks or savings
associations, and which is not operated for the purpose
of evading the provisions of this title, and (D) a
receiver, conservator, or other liquidating agent of
any institution or firm included in clauses (A), (B),
or (C) of this paragraph.
(7) The term ``director'' means any director of a
corporation or any person performing similar functions
with respect to any organization, whether incorporated
or unincorporated.
(8) The term ``issuer'' means any person who issues
or proposes to issue any security; except that with
respect to certificates of deposit for securities,
voting-trust certificates, or collateral-trust
certificates, or with respect to certificates of
interest or shares in an unincorporated investment
trust not having a board of directors or of the fixed,
restricted management, or unit type, the term
``issuer'' means the person or persons performing the
acts and assuming the duties of depositor or manager
pursuant to the provisions of the trust or other
agreement or instrument under which such securities are
issued; and except that with respect to equipment-trust
certificates or like securities, the term ``issuer''
means the person by whom the equipment or property is,
or is to be, used.
(9) The term ``person'' means a natural person,
company, government, or political subdivision, agency,
or instrumentality of a government.
(10) The term ``security'' means any note, stock,
treasury stock, security future, security-based
swap,bond, debenture, certificate of interest or
participation in any profit-sharing agreement or in any
oil, gas, or other mineral royalty or lease, any
collateral-trust certificate, preorganization
certificate or subscription, transferable share,
investment contract, voting-trust certificate,
certificate of deposit for a security, any put, call,
straddle, option, or privilege on any security,
certificate of deposit, or group or index of securities
(including any interest therein or based on the value
thereof), or any put, call, straddle, option, or
privilege entered into on a national securities
exchange relating to foreign currency, or in general,
any instrument commonly known as a ``security''; or any
certificate of interest or participation in, temporary
or interim certificate for, receipt for, or warrant or
right to subscribe to or purchase, any of the
foregoing; but shall not include currency or any note,
draft, bill of exchange, or banker's acceptance which
has a maturity at the time of issuance of not exceeding
nine months, exclusive of days of grace, or any renewal
thereof the maturity of which is likewise limited.
(11) The term ``equity security'' means any stock or
similar security; or any security future on any such
security; or any security convertible, with or without
consideration, into such a security, or carrying any
warrant or right to subscribe to or purchase such a
security; or any such warrant or right; or any other
security which the Commission shall deem to be of
similar nature and consider necessary or appropriate,
by such rules and regulations as it may prescribe in
the public interest or for the protection of investors,
to treat as an equity security.
(12)(A) The term ``exempted security'' or ``exempted
securities'' includes--
(i) government securities, as defined in
paragraph (42) of this subsection;
(ii) municipal securities, as defined in
paragraph (29) of this subsection;
(iii) any interest or participation in any
common trust fund or similar fund that is
excluded from the definition of the term
``investment company'' under section 3(c)(3) of
the Investment Company Act of 1940;
(iv) any interest or participation in a
single trust fund, or a collective trust fund
maintained by a bank, or any security arising
out of a contract issued by an insurance
company, which interest, participation, or
security is issued in connection with a
qualified plan as defined in subparagraph (C)
of this paragraph;
(v) any security issued by or any interest or
participation in any pooled income fund,
collective trust fund, collective investment
fund, or similar fund that is excluded from the
definition of an investment company under
section 3(c)(10)(B) of the Investment Company
Act of 1940;
(vi) solely for purposes of sections 12, 13,
14, and 16 of this title, any security issued
by or any interest or participation in any
church plan, company, or account that is
excluded from the definition of an investment
company under section 3(c)(14) of the
Investment Company Act of 1940; and
(vii) such other securities (which may
include, among others, unregistered securities,
the market in which is predominantly
intrastate) as the Commission may, by such
rules and regulations as it deems consistent
with the public interest and the protection of
investors, either unconditionally or upon
specified terms and conditions or for stated
periods, exempt from the operation of any one
or more provisions of this title which by their
terms do not apply to an ``exempted security''
or to ``exempted securities''.
(B)(i) Notwithstanding subparagraph (A)(i) of this
paragraph, government securities shall not be deemed to
be ``exempted securities'' for the purposes of section
17A of this title.
(ii) Notwithstanding subparagraph (A)(ii) of this
paragraph, municipal securities shall not be deemed to
be ``exempted securities'' for the purposes of sections
15 and 17A of this title.
(C) For purposes of subparagraph (A)(iv) of this
paragraph, the term ``qualified plan'' means (i) a
stock bonus, pension, or profit-sharing plan which
meets the requirements for qualification under section
401 of the Internal Revenue Code of 1954, (ii) an
annuity plan which meets the requirements for the
deduction of the employer's contribution under section
404(a)(2) of such Code, (iii) a governmental plan as
defined in section 414(d) of such Code which has been
established by an employer for the exclusive benefit of
its employees or their beneficiaries for the purpose of
distributing to such employees or their beneficiaries
the corpus and income of the funds accumulated under
such plan, if under such plan it is impossible, prior
to the satisfaction of all liabilities with respect to
such employees and their beneficiaries, for any part of
the corpus or income to be used for, or diverted to,
purposes other than the exclusive benefit of such
employees or their beneficiaries, or (iv) a church
plan, company, or account that is excluded from the
definition of an investment company under section
3(c)(14) of the Investment Company Act of 1940, other
than any plan described in clause (i), (ii), or (iii)
of this subparagraph which (I) covers employees some or
all of whom are employees within the meaning of section
401(c) of such Code, or (II) is a plan funded by an
annuity contract described in section 403(b) of such
Code.
(13) The terms ``buy'' and ``purchase'' each include
any contract to buy, purchase, or otherwise acquire.
For security futures products, such term includes any
contract, agreement, or transaction for future
delivery. For security-based swaps, such terms include
the execution, termination (prior to its scheduled
maturity date), assignment, exchange, or similar
transfer or conveyance of, or extinguishing of rights
or obligations under, a security-based swap, as the
context may require.
(14) The terms ``sale'' and ``sell'' each include any
contract to sell or otherwise dispose of. For security
futures products, such term includes any contract,
agreement, or transaction for future delivery. For
security-based swaps, such terms include the execution,
termination (prior to its scheduled maturity date),
assignment, exchange, or similar transfer or conveyance
of, or extinguishing of rights or obligations under, a
security-based swap, as the context may require.
(15) The term ``Commission'' means the Securities and
Exchange Commission established by section 4 of this
title.
(16) The term ``State'' means any State of the United
States, the District of Columbia, Puerto Rico, the
Virgin Islands, or any other possession of the United
States.
(17) The term ``interstate commerce'' means trade,
commerce, transportation, or communication among the
several States, or between any foreign country and any
State, or between any State and any place or ship
outside thereof. The term also includes intrastate use
of (A) any facility of a national securities exchange
or of a telephone or other interstate means of
communication, or (B) any other interstate
instrumentality.
(18) The term ``person associated with a broker or
dealer'' or ``associated person of a broker or dealer''
means any partner, officer, director, or branch manager
of such broker or dealer (or any person occupying a
similar status or performing similar functions), any
person directly or indirectly controlling, controlled
by, or under common control with such broker or dealer,
or any employee of such broker or dealer, except that
any person associated with a broker or dealer whose
functions are solely clerical or ministerial shall not
be included in the meaning of such term for purposes of
section 15(b) of this title (other than paragraph (6)
thereof).
(19) The terms ``investment company,''``affiliated
person,''``insurance company,''``separate account,''
and ``company'' have the same meanings as in the
Investment Company Act of 1940.
(20) The terms ``investment adviser'' and
``underwriter'' have the same meanings as in the
Investment Advisers Act of 1940.
(21) The term ``persons associated with a member'' or
``associated person of a member'' when used with
respect to a member of a national securities exchange
or registered securities association means any partner,
officer, director, or branch manager of such member (or
any person occupying a similar status or performing
similar functions), any person directly or indirectly
controlling, controlled by, or under common control
with such member, or any employee of such member.
(22)(A) The term ``securities information processor''
means any person engaged in the business of (i)
collecting, processing, or preparing for distribution
or publication, or assisting, participating in, or
coordinating the distribution or publication of,
information with respect to transactions in or
quotations for any security (other than an exempted
security) or (ii) distributing or publishing (whether
by means of a ticker tape, a communications network, a
terminal display device, or otherwise) on a current and
continuing basis, information with respect to such
transactions or quotations. The term ``securities
information processor'' does not include any bona fide
newspaper, news magazine, or business or financial
publication of general and regular circulation, any
self-regulatory organization, any bank, broker, dealer,
building and loan, savings and loan, or homestead
association, or cooperative bank, if such bank, broker,
dealer, association, or cooperative bank would be
deemed to be a securities information processor solely
by reason of functions performed by such institutions
as part of customary banking, brokerage, dealing,
association, or cooperative bank activities, or any
common carrier, as defined in section 3 of the
Communications Act of 1934, subject to the jurisdiction
of the Federal Communications Commission or a State
commission, as defined in section 3 of that Act, unless
the Commission determines that such carrier is engaged
in the business of collecting, processing, or preparing
for distribution or publication, information with
respect to transactions in or quotations for any
security.
(B) The term ``exclusive processor'' means any
securities information processor or self-regulatory
organization which, directly or indirectly, engages on
an exclusive basis on behalf of any national securities
exchange or registered securities association, or any
national securities exchange or registered securities
association which engages on an exclusive basis on its
own behalf, in collecting, processing, or preparing for
distribution or publication any information with
respect to (i) transactions or quotations on or
effected or made by means of any facility of such
exchange or (ii) quotations distributed or published by
means of any electronic system operated or controlled
by such association.
(23)(A) The term ``clearing agency'' means any person
who acts as an intermediary in making payments or
deliveries or both in connection with transactions in
securities or who provides facilities for comparison of
data respecting the terms of settlement of securities
transactions, to reduce the number of settlements of
securities transactions, or for the allocation of
securities settlement responsibilities. Such term also
means any person, such as a securities depository, who
(i) acts as a custodian of securities in connection
with a system for the central handling of securities
whereby all securities of a particular class or series
of any issuer deposited within the system are treated
as fungible and may be transferred, loaned, or pledged
by bookkeeping entry without physical delivery of
securities certificates, or (ii) otherwise permits or
facilitates the settlement of securities transactions
or the hypothecation or lending of securities without
physical delivery of securities certificates.
(B) The term ``clearing agency'' does not include (i)
any Federal Reserve bank, Federal home loan bank, or
Federal land bank; (ii) any national securities
exchange or registered securities association solely by
reason of its providing facilities for comparison of
data respecting the terms of settlement of securities
transactions effected on such exchange or by means of
any electronic system operated or controlled by such
association; (iii) any bank, broker, dealer, building
and loan, savings and loan, or homestead association,
or cooperative bank if such bank, broker, dealer,
association, or cooperative bank would be deemed to be
a clearing agency solely by reason of functions
performed by such institution as part of customary
banking, brokerage, dealing, association, or
cooperative banking activities, or solely by reason of
acting on behalf of a clearing agency or a participant
therein in connection with the furnishing by the
clearing agency of services to its participants or the
use of services of the clearing agency by its
participants, unless the Commission, by rule, otherwise
provides as necessary or appropriate to assure the
prompt and accurate clearance and settlement of
securities transactions or to prevent evasion of this
title; (iv) any life insurance company, its registered
separate accounts, or a subsidiary of such insurance
company solely by reason of functions commonly
performed by such entities in connection with variable
annuity contracts or variable life policies issued by
such insurance company or its separate accounts; (v)
any registered open-end investment company or unit
investment trust solely by reason of functions commonly
performed by it in connection with shares in such
registered open-end investment company or unit
investment trust, or (vi) any person solely by reason
of its performing functions described in paragraph
25(E) of this subsection.
(24) The term ``participant'' when used with respect
to a clearing agency means any person who uses a
clearing agency to clear or settle securities
transactions or to transfer, pledge, lend, or
hypothecate securities. Such term does not include a
person whose only use of a clearing agency is (A)
through another person who is a participant or (B) as a
pledgee of securities.
(25) The term ``transfer agent'' means any person who
engages on behalf of an issuer of securities or on
behalf of itself as an issuer of securities in (A)
countersigning such securities upon issuance; (B)
monitoring the issuance of such securities with a view
to preventing unauthorized issuance, a function
commonly performed by a person called a registrar; (C)
registering the transfer of such securities; (D)
exchanging or converting such securities; or (E)
transferring record ownership of securities by
bookkeeping entry without physical issuance of
securities certificates. The term ``transfer agent''
does not include any insurance company or separate
account which performs such functions solely with
respect to variable annuity contracts or variable life
policies which it issues or any registered clearing
agency which performs such functions solely with
respect to options contracts which it issues.
(26) The term ``self-regulatory organization'' means
any national securities exchange, registered securities
association, or registered clearing agency, or (solely
for purposes of sections 19(b), 19(c), and 23(b) of
this title) the Municipal Securities Rulemaking Board
established by section 15B of this title.
(27) The term ``rules of an exchange'', ``rules of an
association'', or ``rules of a clearing agency'' means
the constitution, articles of incorporation, bylaws,
and rules, or instruments corresponding to the
foregoing, of an exchange, association of brokers and
dealers, or clearing agency, respectively, and such of
the stated policies, practices, and interpretations of
such exchange, association, or clearing agency as the
Commission, by rule, may determine to be necessary or
appropriate in the public interest or for the
protection of investors to be deemed to be rules of
such exchange, association, or clearing agency.
(28) The term ``rules of a self-regulatory
organization'' means the rules of an exchange which is
a national securities exchange, the rules of an
association of brokers and dealers which is a
registered securities association, the rules of a
clearing agency which is a registered clearing agency,
or the rules of the Municipal Securities Rulemaking
Board.
(29) The term ``municipal securities'' means
securities which are direct obligations of, or
obligations guaranteed as to principal or interest by,
a State or any political subdivision thereof, or any
agency or instrumentality of a State or any political
subdivision thereof, or any municipal corporate
instrumentality of one or more States, or any security
which is an industrial development bond (as defined in
section 103(c)(2) of the Internal Revenue Code of 1954)
the interest on which is excludable from gross income
under section 103(a)(1) of such Code if, by reason of
the application of paragraph (4) or (6) of section
103(c) of such Code (determined as if paragraphs
(4)(A), (5), and (7) were not included in such section
103(c)), paragraph (1) of such section 103(c) does not
apply to such security.
(30) The term ``municipal securities dealer'' means
any person (including a separately identifiable
department or division of a bank) engaged in the
business of buying and selling municipal securities for
his own account, through a broker or otherwise, but
does not include--
(A) any person insofar as he buys or sells
such securities for his own account, either
individually or in some fiduciary capacity, but
not as a part of a regular business; or
(B) a bank, unless the bank is engaged in the
business of buying and selling municipal
securities for its own account other than in a
fiduciary capacity, through a broker or
otherwise; Provided, however, That if the bank
is engaged in such business through a
separately identifiable department or division
(as defined by the Municipal Securities
Rulemaking Board in accordance with section
15B(b)(2)(H) of this title), the department or
division and not the bank itself shall be
deemed to be the municipal securities dealer.
(31) The term ``municipal securities broker'' means a
broker engaged in the business of effecting
transactions in municipal securities for the account of
others.
(32) The term ``person associated with a municipal
securities dealer'' when used with respect to a
municipal securities dealer which is a bank or a
division or department of a bank means any person
directly engaged in the management, direction,
supervision, or performance of any of the municipal
securities dealer's activities with respect to
municipal securities, and any person directly or
indirectly controlling such activities or controlled by
the municipal securities dealer in connection with such
activities.
(33) The term ``municipal securities investment
portfolio'' means all municipal securities held for
investment and not for sale as part of a regular
business by a municipal securities dealer or by a
person, directly or indirectly, controlling, controlled
by, or under common control with a municipal securities
dealer.
(34) The term ``appropriate regulatory agency''
means--
(A) When used with respect to a municipal
securities dealer:
(i) the Comptroller of the Currency,
in the case of a national bank, a
subsidiary or a department or division
of any such bank, a Federal savings
association (as defined in section
3(b)(2) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)(2))),
the deposits of which are insured by
the Federal Deposit Insurance
Corporation, or a subsidiary or
department or division of any such
Federal savings association;
(ii) the Board of Governors of the
Federal Reserve System, in the case of
a State member bank of the Federal
Reserve System, a subsidiary or a
department or division thereof, a bank
holding company, a subsidiary of a bank
holding company which is a bank other
than a bank specified in clause (i),
(iii), or (iv) of this subparagraph, a
subsidiary or a department or division
of such subsidiary, or a savings and
loan holding company;
(iii) the Federal Deposit Insurance
Corporation, in the case of a bank
insured by the Federal Deposit
Insurance Corporation (other than a
member of the Federal Reserve System),
a subsidiary or department or division
of any such bank, a State savings
association (as defined in section
3(b)(3) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)(3))),
the deposits of which are insured by
the Federal Deposit Insurance
Corporation, or a subsidiary or a
department or division of any such
State savings association; and
(iv) the Commission in the case of
all other municipal securities dealers.
(B) When used with respect to a clearing
agency or transfer agent:
(i) the Comptroller of the Currency,
in the case of a national bank, a
subsidiary of any such bank, a Federal
savings association (as defined in
section 3(b)(2) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)(2))),
the deposits of which are insured by
the Federal Deposit Insurance
Corporation, or a subsidiary of any
such Federal savings association;
(ii) the Board of Governors of the
Federal Reserve System, in the case of
a State member bank of the Federal
Reserve System, a subsidiary thereof, a
bank holding company, a subsidiary of a
bank holding company that is a bank
other than a bank specified in clause
(i) or (iii) of this subparagraph, or a
savings and loan holding company;
(iii) the Federal Deposit Insurance
Corporation, in the case of a bank
insured by the Federal Deposit
Insurance Corporation (other than a
member of the Federal Reserve System),
a subsidiary of any such bank, a State
savings association (as defined in
section 3(b)(3) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)(3))),
the deposits of which are insured by
the Federal Deposit Insurance
Corporation, or a subsidiary of any
such State savings association; and
(iv) the Commission in the case of
all other clearing agencies and
transfer agents.
(C) When used with respect to a participant
or applicant to become a participant in a
clearing agency or a person requesting or
having access to services offered by a clearing
agency:
(i) the Comptroller of the Currency,
in the case of a national bank or a
Federal savings association (as defined
in section 3(b)(2) of the Federal
Deposit Insurance Act (12 U.S.C.
1813(b)(2))), the deposits of which are
insured by the Federal Deposit
Insurance Corporation when the
appropriate regulatory agency for such
clearing agency is not the Commission;
(ii) the Board of Governors of the
Federal Reserve System in the case of a
State member bank of the Federal
Reserve System, a bank holding company,
or a subsidiary of a bank holding
company, a subsidiary of a bank holding
company that is a bank other than a
bank specified in clause (i) or (iii)
of this subparagraph, or a savings and
loan holding company when the
appropriate regulatory agency for such
clearing agency is not the Commission;
(iii) the Federal Deposit Insurance
Corporation, in the case of a bank
insured by the Federal Deposit
Insurance Corporation (other than a
member of the Federal Reserve System)
or a State savings association (as
defined in section 3(b)(3) of the
Federal Deposit Insurance Act (12
U.S.C. 1813(b)(3))), the deposits of
which are insured by the Federal
Deposit Insurance Corporation; and when
the appropriate regulatory agency for
such clearing agency is not the
Commission;
(iv) the Commission in all other
cases.
(D) When used with respect to an
institutional investment manager which is a
bank the deposits of which are insured in
accordance with the Federal Deposit Insurance
Act:
(i) the Comptroller of the Currency,
in the case of a national bank or a
Federal savings association (as defined
in section 3(b)(2) of the Federal
Deposit Insurance Act (12 U.S.C.
1813(b)(2))), the deposits of which are
insured by the Federal Deposit
Insurance Corporation;
(ii) the Board of Governors of the
Federal Reserve System, in the case of
any other member bank of the Federal
Reserve System; and
(iii) the Federal Deposit Insurance
Corporation, in the case of any other
insured bank or a State savings
association (as defined in section
3(b)(3) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)(3))),
the deposits of which are insured by
the Federal Deposit Insurance
Corporation.
(E) When used with respect to a national
securities exchange or registered securities
association, member thereof, person associated
with a member thereof, applicant to become a
member thereof or to become associated with a
member thereof, or person requesting or having
access to services offered by such exchange or
association or member thereof, or the Municipal
Securities Rulemaking Board, the Commission.
(F) When used with respect to a person
exercising investment discretion with respect
to an account:
(i) the Comptroller of the Currency,
in the case of a national bank or a
Federal savings association (as defined
in section 3(b)(2) of the Federal
Deposit Insurance Act (12 U.S.C.
1813(b)(2))), the deposits of which are
insured by the Federal Deposit
Insurance Corporation;
(ii) the Board of Governors of the
Federal Reserve System in the case of
any other member bank of the Federal
Reserve System;
(iii) the Federal Deposit Insurance
Corporation, in the case of any other
bank the deposits of which are insured
in accordance with the Federal Deposit
Insurance Act or a State savings
association (as defined in section
3(b)(3) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(b)(3))),
the deposits of which are insured by
the Federal Deposit Insurance
Corporation; and
(iv) the Commission in the case of
all other such persons.
(G) When used with respect to a government
securities broker or government securities
dealer, or person associated with a government
securities broker or government securities
dealer:
(i) the Comptroller of the Currency,
in the case of a national bank, a
Federal savings association (as defined
in section 3(b)(2) of the Federal
Deposit Insurance Act), the deposits of
which are insured by the Federal
Deposit Insurance Corporation, or a
Federal branch or Federal agency of a
foreign bank (as such terms are used in
the International Banking Act of 1978);
(ii) the Board of Governors of the
Federal Reserve System, in the case of
a State member bank of the Federal
Reserve System, a foreign bank, an
uninsured State branch or State agency
of a foreign bank, a commercial lending
company owned or controlled by a
foreign bank (as such terms are used in
the International Banking Act of 1978),
or a corporation organized or having an
agreement with the Board of Governors
of the Federal Reserve System pursuant
to section 25 or section 25A of the
Federal Reserve Act;
(iii) the Federal Deposit Insurance
Corporation, in the case of a bank
insured by the Federal Deposit
Insurance Corporation (other than a
member of the Federal Reserve System or
a Federal savings bank), a State
savings association (as defined in
section 3(b)(3) of the Federal Deposit
Insurance Act), the deposits of which
are insured by the Federal Deposit
Insurance Corporation, or an insured
State branch of a foreign bank (as such
terms are used in the International
Banking Act of 1978); and
(iv) the Commission, in the case of
all other government securities brokers
and government securities dealers.
(H) When used with respect to an institution
described in subparagraph (D), (F), or (G) of
section 2(c)(2), or held under section 4(f), of
the Bank Holding Company Act of 1956--
(i) the Comptroller of the Currency,
in the case of a national bank;
(ii) the Board of Governors of the
Federal Reserve System, in the case of
a State member bank of the Federal
Reserve System or any corporation
chartered under section 25A of the
Federal Reserve Act;
(iii) the Federal Deposit Insurance
Corporation, in the case of any other
bank the deposits of which are insured
in accordance with the Federal Deposit
Insurance Act; or
(iv) the Commission in the case of
all other such institutions.
As used in this paragraph, the terms ``bank holding
company'' and ``subsidiary of a bank holding company''
have the meanings given them in section 2 of the Bank
Holding Company Act of 1956. As used in this paragraph,
the term ``savings and loan holding company'' has the
same meaning as in section 10(a) of the Home Owners'
Loan Act (12 U.S.C. 1467a(a)).
(35) A person exercises ``investment discretion''
with respect to an account if, directly or indirectly,
such person (A) is authorized to determine what
securities or other property shall be purchased or sold
by or for the account, (B) makes decisions as to what
securities or other property shall be purchased or sold
by or for the account even though some other person may
have responsibility for such investment decisions, or
(C) otherwise exercises such influence with respect to
the purchase and sale of securities or other property
by or for the account as the Commission, by rule,
determines, in the public interest or for the
protection of investors, should be subject to the
operation of the provisions of this title and rules and
regulations thereunder.
(36) A class of persons or markets is subject to
``equal regulation'' if no member of the class has a
competitive advantage over any other member thereof
resulting from a disparity in their regulation under
this title which the Commission determines is unfair
and not necessary or appropriate in furtherance of the
purposes of this title.
(37) The term ``records'' means accounts,
correspondence, memorandums, tapes, discs, papers,
books, and other documents or transcribed information
of any type, whether expressed in ordinary or machine
language.
(38) The term ``market maker'' means any specialist
permitted to act as a dealer, any dealer acting in the
capacity of block positioner, and any dealer who, with
respect to a security, holds himself out (by entering
quotations in an inter-dealer communications system or
otherwise) as being willing to buy and sell such
security for his own account on a regular or continuous
basis.
(39) A person is subject to a ``statutory
disqualification'' with respect to membership or
participation in, or association with a member of, a
self-regulatory organization, if such person--
(A) has been and is expelled or suspended
from membership or participation in, or barred
or suspended from being associated with a
member of, any self-regulatory organization,
foreign equivalent of a self-regulatory
organization, foreign or international
securities exchange, contract market designated
pursuant to section 5 of the Commodity Exchange
Act (7 U.S.C. 7), or any substantially
equivalent foreign statute or regulation, or
futures association registered under section 17
of such Act (7 U.S.C. 21), or any substantially
equivalent foreign statute or regulation, or
has been and is denied trading privileges on
any such contract market or foreign equivalent;
(B) is subject to--
(i) an order of the Commission, other
appropriate regulatory agency, or foreign
financial regulatory authority--
(I) denying, suspending for a period
not exceeding 12 months, or revoking
his registration as a broker, dealer,
municipal securities dealer, government
securities broker, government
securities dealer, security-based swap
dealer, or major security-based swap
participant or limiting his activities
as a foreign person performing a
function substantially equivalent to
any of the above; or
(II) barring or suspending for a
period not exceeding 12 months his
being associated with a broker, dealer,
municipal securities dealer, government
securities broker, government
securities dealer, security-based swap
dealer, major security-based swap
participant, or foreign person
performing a function substantially
equivalent to any of the above;
(ii) an order of the Commodity Futures
Trading Commission denying, suspending, or
revoking his registration under the Commodity
Exchange Act (7 U.S.C. 1 et seq.); or
(iii) an order by a foreign financial
regulatory authority denying, suspending, or
revoking the person's authority to engage in
transactions in contracts of sale of a
commodity for future delivery or other
instruments traded on or subject to the rules
of a contract market, board of trade, or
foreign equivalent thereof;
(C) by his conduct while associated with a
broker, dealer, municipal securities dealer,
government securities broker, government
securities dealer, security-based swap dealer,
or major security-based swap participant, or
while associated with an entity or person
required to be registered under the Commodity
Exchange Act, has been found to be a cause of
any effective suspension, expulsion, or order
of the character described in subparagraph (A)
or (B) of this paragraph, and in entering such
a suspension, expulsion, or order, the
Commission, an appropriate regulatory agency,
or any such self-regulatory organization shall
have jurisdiction to find whether or not any
person was a cause thereof;
(D) by his conduct while associated with any
broker, dealer, municipal securities dealer,
government securities broker, government
securities dealer, security-based swap dealer,
major security-based swap participant, or any
other entity engaged in transactions in
securities, or while associated with an entity
engaged in transactions in contracts of sale of
a commodity for future delivery or other
instruments traded on or subject to the rules
of a contract market, board of trade, or
foreign equivalent thereof, has been found to
be a cause of any effective suspension,
expulsion, or order by a foreign or
international securities exchange or foreign
financial regulatory authority empowered by a
foreign government to administer or enforce its
laws relating to financial transactions as
described in subparagraph (A) or (B) of this
paragraph;
(E) has associated with him any person who is
known, or in the exercise of reasonable care
should be known, to him to be a person
described by subparagraph (A), (B), (C), or (D)
of this paragraph; or
(F) has committed or omitted any act, or is
subject to an order or finding, enumerated in
subparagraph (D), (E), (H), or (G) of paragraph
(4) of section 15(b) of this title, has been
convicted of any offense specified in
subparagraph (B) of such paragraph (4) or any
other felony within ten years of the date of
the filing of an application for membership or
participation in, or to become associated with
a member of, such self-regulatory organization,
is enjoined from any action, conduct, or
practice specified in subparagraph (C) of such
paragraph (4), has willfully made or caused to
be made in any application for membership or
participation in, or to become associated with
a member of, a self-regulatory organization,
report required to be filed with a self-
regulatory organization, or proceeding before a
self-regulatory organization, any statement
which was at the time, and in the light of the
circumstances under which it was made, false or
misleading with respect to any material fact,
or has omitted to state in any such
application, report, or proceeding any material
fact which is required to be stated therein.
(40) The term ``financial responsibility rules''
means the rules and regulations of the Commission or
the rules and regulations prescribed by any self-
regulatory organization relating to financial
responsibility and related practices which are
designated by the Commission, by rule or regulation, to
be financial responsibility rules.
(41) The term ``mortgage related security'' means a
security that meets standards of credit-worthiness as
established by the Commission, and either:
(A) represents ownership of one or more
promissory notes or certificates of interest or
participation in such notes (including any
rights designed to assure servicing of, or the
receipt or timeliness of receipt by the holders
of such notes, certificates, or participations
of amounts payable under, such notes,
certificates, or participations), which notes:
(i) are directly secured by a first
lien on a single parcel of real estate,
including stock allocated to a dwelling
unit in a residential cooperative
housing corporation, upon which is
located a dwelling or mixed residential
and commercial structure, on a
residential manufactured home as
defined in section 603(6) of the
National Manufactured Housing
Construction and Safety Standards Act
of 1974, whether such manufactured home
is considered real or personal property
under the laws of the State in which it
is to be located, or on one or more
parcels of real estate upon which is
located one or more commercial
structures; and
(ii) were originated by a savings and
loan association, savings bank,
commercial bank, credit union,
insurance company, or similar
institution which is supervised and
examined by a Federal or State
authority, or by a mortgage approved by
the Secretary of Housing and Urban
Development pursuant to sections 203
and 211 of the National Housing Act,
or, where such notes involve a lien on
the manufactured home, by any such
institution or by any financial
institution approved for insurance by
the Secretary of Housing and Urban
Development pursuant to section 2 of
the National Housing Act; or
(B) is secured by one or more promissory
notes or certificates of interest or
participations in such notes (with or without
recourse to the issuer thereof) and, by its
terms, provides for payments of principal in
relation to payments, or reasonable projections
of payments, on notes meeting the requirements
of subparagraphs (A) (i) and (ii) or
certificates of interest or participations in
promissory notes meeting such requirements.
For the purpose of this paragraph, the term
``promissory note'', when used in connection with a
manufactured home, shall also include a loan, advance,
or credit sale as evidence by a retail installment
sales contract or other instrument.
(42) The term ``government securities'' means--
(A) securities which are direct obligations
of, or obligations guaranteed as to principal
or interest by, the United States;
(B) securities which are issued or guaranteed
by the Tennessee Valley Authority or by
corporations in which the United States has a
direct or indirect interest and which are
designated by the Secretary of the Treasury for
exemption as necessary or appropriate in the
public interest or for the protection of
investors;
(C) securities issued or guaranteed as to
principal or interest by any corporation the
securities of which are designated, by statute
specifically naming such corporation, to
constitute exempt securities within the meaning
of the laws administered by the Commission;
(D) for purposes of sections 15C and 17A, any
put, call, straddle, option, or privilege on a
security described in subparagraph (A), (B), or
(C) other than a put, call, straddle, option,
or privilege--
(i) that is traded on one or more
national securities exchanges; or
(ii) for which quotations are
disseminated through an automated
quotation system operated by a
registered securities association; or
(E) for purposes of sections 15, 15C, and 17A
as applied to a bank, a qualified Canadian
government obligation as defined in section
5136 of the Revised Statutes of the United
States.
(43) The term ``government securities broker'' means
any person regularly engaged in the business of
effecting transactions in government securities for the
account of others, but does not include--
(A) any corporation the securities of which
are government securities under subparagraph
(B) or (C) of paragraph (42) of this
subsection; or
(B) any person registered with the Commodity
Futures Trading Commission, any contract market
designated by the Commodity Futures Trading
Commission, such contract market's affiliated
clearing organization, or any floor trader on
such contract market, solely because such
person effects transactions in government
securities that the Commission, after
consultation with the Commodity Futures Trading
Commission, has determined by rule or order to
be incidental to such person's futures-related
business.
(44) The term ``government securities dealer'' means
any person engaged in the business of buying and
selling government securities for his own account,
through a broker or otherwise, but does not include--
(A) any person insofar as he buys or sells
such securities for his own account, either
individually or in some fiduciary capacity, but
not as a part of a regular business;
(B) any corporation the securities of which
are government securities under subparagraph
(B) or (C) of paragraph (42) of this
subsection;
(C) any bank, unless the bank is engaged in
the business of buying and selling government
securities for its own account other than in a
fiduciary capacity, through a broker or
otherwise; or
(D) any person registered with the Commodity
Futures Trading Commission, any contract market
designated by the Commodity Futures Trading
Commission, such contract market's affiliated
clearing organization, or any floor trader on
such contract market, solely because such
person effects transactions in government
securities that the Commission, after
consultation with the Commodity Futures Trading
Commission, has determined by rule or order to
be incidental to such person's futures-related
business.
(45) The term ``person associated with a government
securities broker or government securities dealer''
means any partner, officer, director, or branch manager
of such government securities broker or government
securities dealer (or any person occupying a similar
status or performing similar functions), and any other
employee of such government securities broker or
government securities dealer who is engaged in the
management, direction, supervision, or performance of
any activities relating to government securities, and
any person directly or indirectly controlling,
controlled by, or under common control with such
government securities broker or government securities
dealer.
(46) The term ``financial institution'' means--
(A) a bank (as defined in paragraph (6) of
this subsection);
(B) a foreign bank (as such term is used in
the International Banking Act of 1978); and
(C) a savings association (as defined in
section 3(b) of the Federal Deposit Insurance
Act) the deposits of which are insured by the
Federal Deposit Insurance Corporation.
(47) The term ``securities laws'' means the
Securities Act of 1933 (15 U.S.C. 78a et seq.), the
Securities Exchange Act of 1934 (15 U.S.C. 78a et
seq.), the Sarbanes-Oxley Act of 2002, the Trust
Indenture Act of 1939 (15 U.S.C. 77aaa et seq.), the
Investment Company Act of 1940 (15 U.S.C. 80a-1 et
seq.), the Investment Advisers Act of 1940 (15 U.S.C.
80b et seq.), and the Securities Investor Protection
Act of 1970 (15 U.S.C. 78aaa et seq.).
(48) The term ``registered broker or dealer'' means a
broker or dealer registered or required to register
pursuant to section 15 or 15B of this title, except
that in paragraph (3) of this subsection and sections 6
and 15A the term means such a broker or dealer and a
government securities broker or government securities
dealer registered or required to register pursuant to
section 15C(a)(1)(A) of this title.
(49) The terms ``person associated with a transfer
agent'' and ``associated person of a transfer agent''
mean any person (except an employee whose functions are
solely clerical or ministerial) directly engaged in the
management, direction, supervision, or performance of
any of the transfer agent's activities with respect to
transfer agent functions, and any person directly or
indirectly controlling such activities or controlled by
the transfer agent in connection with such activities.
(50) The term ``foreign securities authority'' means
any foreign government, or any governmental body or
regulatory organization empowered by a foreign
government to administer or enforce its laws as they
relate to securities matters.
(51)(A) The term ``penny stock'' means any equity
security other than a security that is--
(i) registered or approved for registration
and traded on a national securities exchange
that meets such criteria as the Commission
shall prescribe by rule or regulation for
purposes of this paragraph;
(ii) authorized for quotation on an automated
quotation system sponsored by a registered
securities association, if such system (I) was
established and in operation before January 1,
1990, and (II) meets such criteria as the
Commission shall prescribe by rule or
regulation for purposes of this paragraph;
(iii) issued by an investment company
registered under the Investment Company Act of
1940;
(iv) excluded, on the basis of exceeding a
minimum price, net tangible assets of the
issuer, or other relevant criteria, from the
definition of such term by rule or regulation
which the Commission shall prescribe for
purposes of this paragraph; or
(v) exempted, in whole or in part,
conditionally or unconditionally, from the
definition of such term by rule, regulation, or
order prescribed by the Commission.
(B) The Commission may, by rule, regulation, or
order, designate any equity security or class of equity
securities described in clause (i) or (ii) of
subparagraph (A) as within the meaning of the term
``penny stock'' if such security or class of securities
is traded other than on a national securities exchange
or through an automated quotation system described in
clause (ii) of subparagraph (A).
(C) In exercising its authority under this paragraph
to prescribe rules, regulations, and orders, the
Commission shall determine that such rule, regulation,
or order is consistent with the public interest and the
protection of investors.
(52) The term ``foreign financial regulatory
authority'' means any (A) foreign securities authority,
(B) other governmental body or foreign equivalent of a
self-regulatory organization empowered by a foreign
government to administer or enforce its laws relating
to the regulation of fiduciaries, trusts, commercial
lending, insurance, trading in contracts of sale of a
commodity for future delivery, or other instruments
traded on or subject to the rules of a contract market,
board of trade, or foreign equivalent, or other
financial activities, or (C) membership organization a
function of which is to regulate participation of its
members in activities listed above.
(53)(A) The term ``small business related security''
means a security that meets standards of credit-
worthiness as established by the Commission, and
either--
(i) represents an interest in 1 or more
promissory notes or leases of personal property
evidencing the obligation of a small business
concern and originated by an insured depository
institution, insured credit union, insurance
company, or similar institution which is
supervised and examined by a Federal or State
authority, or a finance company or leasing
company; or
(ii) is secured by an interest in 1 or more
promissory notes or leases of personal property
(with or without recourse to the issuer or
lessee) and provides for payments of principal
in relation to payments, or reasonable
projections of payments, on notes or leases
described in clause (i).
(B) For purposes of this paragraph--
(i) an ``interest in a promissory note or a
lease of personal property'' includes ownership
rights, certificates of interest or
participation in such notes or leases, and
rights designed to assure servicing of such
notes or leases, or the receipt or timely
receipt of amounts payable under such notes or
leases;
(ii) the term ``small business concern''
means a business that meets the criteria for a
small business concern established by the Small
Business Administration under section 3(a) of
the Small Business Act;
(iii) the term ``insured depository
institution'' has the same meaning as in
section 3 of the Federal Deposit Insurance Act;
and
(iv) the term ``insured credit union'' has
the same meaning as in section 101 of the
Federal Credit Union Act.
(54) Qualified investor.--
(A) Definition.--Except as provided in
subparagraph (B), for purposes of this title,
the term ``qualified investor'' means--
(i) any investment company registered
with the Commission under section 8 of
the Investment Company Act of 1940;
(ii) any issuer eligible for an
exclusion from the definition of
investment company pursuant to section
3(c)(7) of the Investment Company Act
of 1940;
(iii) any bank (as defined in
paragraph (6) of this subsection),
savings association (as defined in
section 3(b) of the Federal Deposit
Insurance Act), broker, dealer,
insurance company (as defined in
section 2(a)(13) of the Securities Act
of 1933), or business development
company (as defined in section 2(a)(48)
of the Investment Company Act of 1940);
(iv) any small business investment
company licensed by the United States
Small Business Administration under
section 301 (c) or (d) of the Small
Business Investment Act of 1958;
(v) any State sponsored employee
benefit plan, or any other employee
benefit plan, within the meaning of the
Employee Retirement Income Security Act
of 1974, other than an individual
retirement account, if the investment
decisions are made by a plan fiduciary,
as defined in section 3(21) of that
Act, which is either a bank, savings
and loan association, insurance
company, or registered investment
adviser;
(vi) any trust whose purchases of
securities are directed by a person
described in clauses (i) through (v) of
this subparagraph;
(vii) any market intermediary exempt
under section 3(c)(2) of the Investment
Company Act of 1940;
(viii) any associated person of a
broker or dealer other than a natural
person;
(ix) any foreign bank (as defined in
section 1(b)(7) of the International
Banking Act of 1978);
(x) the government of any foreign
country;
(xi) any corporation, company, or
partnership that owns and invests on a
discretionary basis, not less than
$25,000,000 in investments;
(xii) any natural person who owns and
invests on a discretionary basis, not
less than $25,000,000 in investments;
(xiii) any government or political
subdivision, agency, or instrumentality
of a government who owns and invests on
a discretionary basis not less than
$50,000,000 in investments; or
(xiv) any multinational or
supranational entity or any agency or
instrumentality thereof.
(B) Altered thresholds for asset-backed
securities and loan participations.--For
purposes of section 3(a)(5)(C)(iii) of this
title and section 206(a)(5) of the Gramm-Leach-
Bliley Act, the term ``qualified investor'' has
the meaning given such term by subparagraph (A)
of this paragraph except that clauses (xi) and
(xii) shall be applied by substituting
``$10,000,000'' for ``$25,000,000''.
(C) Additional authority.--The Commission
may, by rule or order, define a ``qualified
investor'' as any other person, taking into
consideration such factors as the financial
sophistication of the person, net worth, and
knowledge and experience in financial matters.
(55)(A) The term ``security future'' means a contract
of sale for future delivery of a single security or of
a narrow-based security index, including any interest
therein or based on the value thereof, except an
exempted security under section 3(a)(12) of this title
as in effect on the date of the enactment of the
Futures Trading Act of 1982 (other than any municipal
security as defined in section 3(a)(29) as in effect on
the date of the enactment of the Futures Trading Act of
1982). The term ``security future'' does not include
any agreement, contract, or transaction excluded from
the Commodity Exchange Act under section 2(c), 2(d),
2(f), or 2(g) of the Commodity Exchange Act (as in
effect on the date of the enactment of the Commodity
Futures Modernization Act of 2000) or title IV of the
Commodity Futures Modernization Act of 2000.
(B) The term ``narrow-based security index'' means an
index--
(i) that has 9 or fewer component securities;
(ii) in which a component security comprises
more than 30 percent of the index's weighting;
(iii) in which the five highest weighted
component securities in the aggregate comprise
more than 60 percent of the index's weighting;
or
(iv) in which the lowest weighted component
securities comprising, in the aggregate, 25
percent of the index's weighting have an
aggregate dollar value of average daily trading
volume of less than $50,000,000 (or in the case
of an index with 15 or more component
securities, $30,000,000), except that if there
are two or more securities with equal weighting
that could be included in the calculation of
the lowest weighted component securities
comprising, in the aggregate, 25 percent of the
index's weighting, such securities shall be
ranked from lowest to highest dollar value of
average daily trading volume and shall be
included in the calculation based on their
ranking starting with the lowest ranked
security.
(C) Notwithstanding subparagraph (B), an index is not
a narrow-based security index if--
(i)(I) it has at least nine component
securities;
(II) no component security comprises more
than 30 percent of the index's weighting; and
(III) each component security is--
(aa) registered pursuant to section
12 of the Securities Exchange Act of
1934;
(bb) one of 750 securities with the
largest market capitalization; and
(cc) one of 675 securities with the
largest dollar value of average daily
trading volume;
(ii) a board of trade was designated as a
contract market by the Commodity Futures
Trading Commission with respect to a contract
of sale for future delivery on the index,
before the date of the enactment of the
Commodity Futures Modernization Act of 2000;
(iii)(I) a contract of sale for future
delivery on the index traded on a designated
contract market or registered derivatives
transaction execution facility for at least 30
days as a contract of sale for future delivery
on an index that was not a narrow-based
security index; and
(II) it has been a narrow-based security
index for no more than 45 business days over 3
consecutive calendar months;
(iv) a contract of sale for future delivery
on the index is traded on or subject to the
rules of a foreign board of trade and meets
such requirements as are jointly established by
rule or regulation by the Commission and the
Commodity Futures Trading Commission;
(v) no more than 18 months have passed since
the date of the enactment of the Commodity
Futures Modernization Act of 2000 and--
(I) it is traded on or subject to the
rules of a foreign board of trade;
(II) the offer and sale in the United
States of a contract of sale for future
delivery on the index was authorized
before the date of the enactment of the
Commodity Futures Modernization Act of
2000; and
(III) the conditions of such
authorization continue to be met; or
(vi) a contract of sale for future delivery
on the index is traded on or subject to the
rules of a board of trade and meets such
requirements as are jointly established by
rule, regulation, or order by the Commission
and the Commodity Futures Trading Commission.
(D) Within 1 year after the enactment of the
Commodity Futures Modernization Act of 2000, the
Commission and the Commodity Futures Trading Commission
jointly shall adopt rules or regulations that set forth
the requirements under clause (iv) of subparagraph (C).
(E) An index that is a narrow-based security index
solely because it was a narrow-based security index for
more than 45 business days over 3 consecutive calendar
months pursuant to clause (iii) of subparagraph (C)
shall not be a narrow-based security index for the 3
following calendar months.
(F) For purposes of subparagraphs (B) and (C) of this
paragraph--
(i) the dollar value of average daily trading
volume and the market capitalization shall be
calculated as of the preceding 6 full calendar
months; and
(ii) the Commission and the Commodity Futures
Trading Commission shall, by rule or
regulation, jointly specify the method to be
used to determine market capitalization and
dollar value of average daily trading volume.
(56) The term ``security futures product'' means a
security future or any put, call, straddle, option, or
privilege on any security future.
(57)(A) The term ``margin'', when used with respect
to a security futures product, means the amount, type,
and form of collateral required to secure any extension
or maintenance of credit, or the amount, type, and form
of collateral required as a performance bond related to
the purchase, sale, or carrying of a security futures
product.
(B) The terms ``margin level'' and ``level of
margin'', when used with respect to a security futures
product, mean the amount of margin required to secure
any extension or maintenance of credit, or the amount
of margin required as a performance bond related to the
purchase, sale, or carrying of a security futures
product.
(C) The terms ``higher margin level'' and ``higher
level of margin'', when used with respect to a security
futures product, mean a margin level established by a
national securities exchange registered pursuant to
section 6(g) that is higher than the minimum amount
established and in effect pursuant to section
7(c)(2)(B).
(58) Audit committee.--The term ``audit committee''
means--
(A) a committee (or equivalent body)
established by and amongst the board of
directors of an issuer for the purpose of
overseeing the accounting and financial
reporting processes of the issuer and audits of
the financial statements of the issuer; and
(B) if no such committee exists with respect
to an issuer, the entire board of directors of
the issuer.
(59) Registered public accounting firm.--The term
``registered public accounting firm'' has the same
meaning as in section 2 of the Sarbanes-Oxley Act of
2002.
(60) Credit rating.--The term ``credit rating'' means
an assessment of the creditworthiness of an obligor as
an entity or with respect to specific securities or
money market instruments.
(61) Credit rating agency.--The term ``credit rating
agency'' means any person--
(A) engaged in the business of issuing credit
ratings on the Internet or through another
readily accessible means, for free or for a
reasonable fee, but does not include a
commercial credit reporting company;
(B) employing either a quantitative or
qualitative model, or both, to determine credit
ratings; and
(C) receiving fees from either issuers,
investors, or other market participants, or a
combination thereof.
(62) Nationally recognized statistical rating
organization.--The term ``nationally recognized
statistical rating organization'' means a credit rating
agency that--
(A) issues credit ratings certified by
qualified institutional buyers, in accordance
with section 15E(a)(1)(B)(ix), with respect
to--
(i) financial institutions, brokers,
or dealers;
(ii) insurance companies;
(iii) corporate issuers;
(iv) issuers of asset-backed
securities (as that term is defined in
section 1101(c) of part 229 of title
17, Code of Federal Regulations, as in
effect on the date of enactment of this
paragraph);
(v) issuers of government securities,
municipal securities, or securities
issued by a foreign government; or
(vi) a combination of one or more
categories of obligors described in any
of clauses (i) through (v); and
(B) is registered under section 15E.
(63) Person associated with a nationally recognized
statistical rating organization.--The term ``person
associated with'' a nationally recognized statistical
rating organization means any partner, officer,
director, or branch manager of a nationally recognized
statistical rating organization (or any person
occupying a similar status or performing similar
functions), any person directly or indirectly
controlling, controlled by, or under common control
with a nationally recognized statistical rating
organization, or any employee of a nationally
recognized statistical rating organization.
(64) Qualified institutional buyer.--The term
``qualified institutional buyer'' has the meaning given
such term in section 230.144A(a) of title 17, Code of
Federal Regulations, or any successor thereto.
(79) Asset-backed security.--The term ``asset-backed
security''--
(A) means a fixed-income or other security
collateralized by any type of self-liquidating
financial asset (including a loan, a lease, a
mortgage, or a secured or unsecured receivable)
that allows the holder of the security to
receive payments that depend primarily on cash
flow from the asset, including--
(i) a collateralized mortgage
obligation;
(ii) a collateralized debt
obligation;
(iii) a collateralized bond
obligation;
(iv) a collateralized debt obligation
of asset-backed securities;
(v) a collateralized debt obligation
of collateralized debt obligations; and
(vi) a security that the Commission,
by rule, determines to be an asset-
backed security for purposes of this
section; and
(B) does not include a security issued by a
finance subsidiary held by the parent company
or a company controlled by the parent company,
if none of the securities issued by the finance
subsidiary are held by an entity that is not
controlled by the parent company.
(65) Eligible contract participant.--The term
``eligible contract participant'' has the same meaning
as in section 1a of the Commodity Exchange Act (7
U.S.C. 1a).
(66) Major swap participant.--The term ``major swap
participant'' has the same meaning as in section 1a of
the Commodity Exchange Act (7 U.S.C. 1a).
(67) Major security-based swap participant.--
(A) In general.--The term ``major security-
based swap participant'' means any person--
(i) who is not a security-based swap
dealer; and
(ii)(I) who maintains a substantial
position in security-based swaps for
any of the major security-based swap
categories, as such categories are
determined by the Commission, excluding
both positions held for hedging or
mitigating commercial risk and
positions maintained by any employee
benefit plan (or any contract held by
such a plan) as defined in paragraphs
(3) and (32) of section 3 of the
Employee Retirement Income Security Act
of 1974 (29 U.S.C. 1002) for the
primary purpose of hedging or
mitigating any risk directly associated
with the operation of the plan;
(II) whose outstanding security-based
swaps create substantial counterparty
exposure that could have serious
adverse effects on the financial
stability of the United States banking
system or financial markets; or
(III) that is a financial entity
that--
(aa) is highly leveraged
relative to the amount of
capital such entity holds and
that is not subject to capital
requirements established by an
appropriate Federal banking
agency; and
(bb) maintains a substantial
position in outstanding
security-based swaps in any
major security-based swap
category, as such categories
are determined by the
Commission.
(B) Definition of substantial position.--For
purposes of subparagraph (A), the Commission
shall define, by rule or regulation, the term
``substantial position'' at the threshold that
the Commission determines to be prudent for the
effective monitoring, management, and oversight
of entities that are systemically important or
can significantly impact the financial system
of the United States. In setting the definition
under this subparagraph, the Commission shall
consider the person's relative position in
uncleared as opposed to cleared security-based
swaps and may take into consideration the value
and quality of collateral held against
counterparty exposures.
(C) Scope of designation.--For purposes of
subparagraph (A), a person may be designated as
a major security-based swap participant for 1
or more categories of security-based swaps
without being classified as a major security-
based swap participant for all classes of
security-based swaps.
(68) Security-based swap.--
(A) In general.--Except as provided in
subparagraph (B), the term ``security-based
swap'' means any agreement, contract, or
transaction that--
(i) is a swap, as that term is
defined under section 1a of the
Commodity Exchange Act (without regard
to paragraph (47)(B)(x) of such
section); and
(ii) is based on--
(I) an index that is a
narrow-based security index,
including any interest therein
or on the value thereof;
(II) a single security or
loan, including any interest
therein or on the value
thereof; or
(III) the occurrence,
nonoccurrence, or extent of the
occurrence of an event relating
to a single issuer of a
security or the issuers of
securities in a narrow-based
security index, provided that
such event directly affects the
financial statements, financial
condition, or financial
obligations of the issuer.
(B) Rule of construction regarding master
agreements.--The term ``security-based swap''
shall be construed to include a master
agreement that provides for an agreement,
contract, or transaction that is a security-
based swap pursuant to subparagraph (A),
together with all supplements to any such
master agreement, without regard to whether the
master agreement contains an agreement,
contract, or transaction that is not a
security-based swap pursuant to subparagraph
(A), except that the master agreement shall be
considered to be a security-based swap only
with respect to each agreement, contract, or
transaction under the master agreement that is
a security-based swap pursuant to subparagraph
(A).
(C) Exclusions.--The term ``security-based
swap'' does not include any agreement,
contract, or transaction that meets the
definition of a security-based swap only
because such agreement, contract, or
transaction references, is based upon, or
settles through the transfer, delivery, or
receipt of an exempted security under paragraph
(12), as in effect on the date of enactment of
the Futures Trading Act of 1982 (other than any
municipal security as defined in paragraph (29)
as in effect on the date of enactment of the
Futures Trading Act of 1982), unless such
agreement, contract, or transaction is of the
character of, or is commonly known in the trade
as, a put, call, or other option.
(D) Mixed swap.--The term ``security-based
swap'' includes any agreement, contract, or
transaction that is as described in
subparagraph (A) and also is based on the value
of 1 or more interest or other rates,
currencies, commodities, instruments of
indebtedness, indices, quantitative measures,
other financial or economic interest or
property of any kind (other than a single
security or a narrow-based security index), or
the occurrence, non-occurrence, or the extent
of the occurrence of an event or contingency
associated with a potential financial,
economic, or commercial consequence (other than
an event described in subparagraph
(A)(ii)(III)).
(E) Rule of construction regarding use of the
term index.--The term ``index'' means an index
or group of securities, including any interest
therein or based on the value thereof.
(69) Swap.--The term ``swap'' has the same meaning as
in section 1a of the Commodity Exchange Act (7 U.S.C.
1a).
(70) Person associated with a security-based swap
dealer or major security-based swap participant.--
(A) In general.--The term ``person associated
with a security-based swap dealer or major
security-based swap participant'' or
``associated person of a security-based swap
dealer or major security-based swap
participant'' means--
(i) any partner, officer, director,
or branch manager of such security-
based swap dealer or major security-
based swap participant (or any person
occupying a similar status or
performing similar functions);
(ii) any person directly or
indirectly controlling, controlled by,
or under common control with such
security-based swap dealer or major
security-based swap participant; or
(iii) any employee of such security-
based swap dealer or major security-
based swap participant.
(B) Exclusion.--Other than for purposes of
section 15F(l)(2), the term ``person associated
with a security-based swap dealer or major
security-based swap participant'' or
``associated person of a security-based swap
dealer or major security-based swap
participant'' does not include any person
associated with a security-based swap dealer or
major security-based swap participant whose
functions are solely clerical or ministerial.
(71) Security-based swap dealer.--
(A) In general.--The term ``security-based
swap dealer'' means any person who--
(i) holds themself out as a dealer in
security-based swaps;
(ii) makes a market in security-based
swaps;
(iii) regularly enters into security-
based swaps with counterparties as an
ordinary course of business for its own
account; or
(iv) engages in any activity causing
it to be commonly known in the trade as
a dealer or market maker in security-
based swaps.
(B) Designation by type or class.--A person
may be designated as a security-based swap
dealer for a single type or single class or
category of security-based swap or activities
and considered not to be a security-based swap
dealer for other types, classes, or categories
of security-based swaps or activities.
(C) Exception.--The term ``security-based
swap dealer'' does not include a person that
enters into security-based swaps for such
person's own account, either individually or in
a fiduciary capacity, but not as a part of
regular business.
(D) De minimis exception.--The Commission
shall exempt from designation as a security-
based swap dealer an entity that engages in a
de minimis quantity of security-based swap
dealing in connection with transactions with or
on behalf of its customers. The Commission
shall promulgate regulations to establish
factors with respect to the making of any
determination to exempt.
(72) Appropriate federal banking agency.--The term
``appropriate Federal banking agency'' has the same
meaning as in section 3(q) of the Federal Deposit
Insurance Act (12 U.S.C. 1813(q)).
(73) Board.--The term ``Board'' means the Board of
Governors of the Federal Reserve System.
(74) Prudential regulator.--The term ``prudential
regulator'' has the same meaning as in section 1a of
the Commodity Exchange Act (7 U.S.C. 1a).
(75) Security-based swap data repository.--The term
``security-based swap data repository'' means any
person that collects and maintains information or
records with respect to transactions or positions in,
or the terms and conditions of, security-based swaps
entered into by third parties for the purpose of
providing a centralized recordkeeping facility for
security-based swaps.
(76) Swap dealer.--The term ``swap dealer'' has the
same meaning as in section 1a of the Commodity Exchange
Act (7 U.S.C. 1a).
(77) Security-based swap execution facility.--The
term ``security-based swap execution facility'' means a
trading system or platform in which multiple
participants have the ability to execute or trade
security-based swaps by accepting bids and offers made
by multiple participants in the facility or system,
through any means of interstate commerce, including any
trading facility, that--
(A) facilitates the execution of security-
based swaps between persons; and
(B) is not a national securities exchange.
(78) Security-based swap agreement.--
(A) In general.--For purposes of sections 9,
10, 16, 20, and 21A of this Act, and section 17
of the Securities Act of 1933 (15 U.S.C. 77q),
the term ``security-based swap agreement''
means a swap agreement as defined in section
206A of the Gramm-Leach-Bliley Act (15 U.S.C.
78c note) of which a material term is based on
the price, yield, value, or volatility of any
security or any group or index of securities,
or any interest therein.
(B) Exclusions.--The term ``security-based
swap agreement'' does not include any security-
based swap.
(80) Emerging growth company.--The term ``emerging
growth company'' means an issuer that had total annual
gross revenues of less than $1,000,000,000 (as such
amount is indexed for inflation every 5 years by the
Commission to reflect the change in the Consumer Price
Index for All Urban Consumers published by the Bureau
of Labor Statistics, setting the threshold to the
nearest 1,000,000) during its most recently completed
fiscal year. An issuer that is an emerging growth
company as of the first day of that fiscal year shall
continue to be deemed an emerging growth company until
the earliest of--
(A) the last day of the fiscal year of the
issuer during which it had total annual gross
revenues of $1,000,000,000 (as such amount is
indexed for inflation every 5 years by the
Commission to reflect the change in the
Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics,
setting the threshold to the nearest 1,000,000)
or more;
(B) the last day of the fiscal year of the
issuer following the fifth anniversary of the
date of the first sale of common equity
securities of the issuer pursuant to an
effective registration statement under the
Securities Act of 1933;
(C) the date on which such issuer has, during
the previous 3-year period, issued more than
$1,000,000,000 in non-convertible debt; or
(D) the date on which such issuer is deemed
to be a ``large accelerated filer'', as defined
in section 240.12b-2 of title 17, Code of
Federal Regulations, or any successor thereto.
[(80)] (81) Funding portal.--The term ``funding
portal'' means any person acting as an intermediary in
a transaction involving the offer or sale of securities
for the account of others, solely pursuant to section
4(6) of the Securities Act of 1933 (15 U.S.C. 77d(6)),
that does not--
(A) offer investment advice or
recommendations;
(B) solicit purchases, sales, or offers to
buy the securities offered or displayed on its
website or portal;
(C) compensate employees, agents, or other
persons for such solicitation or based on the
sale of securities displayed or referenced on
its website or portal;
(D) hold, manage, possess, or otherwise
handle investor funds or securities; or
(E) engage in such other activities as the
Commission, by rule, determines appropriate.
(82) Recent emerging growth company.--The term
``recent emerging growth company'' means an issuer
that--
(A) was, but is no longer, an emerging growth
company;
(B) would continue to be an emerging growth
company but for the application of subparagraph
(B) of paragraph (80); and
(C) ceased to be an emerging growth company
within the previous 5-year period.
(b) The Commission and the Board of Governors of the Federal
Reserve System, as to matters within their respective
jurisdictions, shall have power by rules and regulations to
define technical, trade, accounting, and other terms used in
this title, consistently with the provisions and purposes of
this title.
(c) No provision of this title shall apply to, or be deemed
to include, any executive department or independent
establishment of the United States, or any lending agency which
is wholly owned, directly or indirectly, by the United States,
or any officer, agent, or employee of any such department,
establishment, or agency, acting in the course of his official
duty as such, unless such provision makes specific reference to
such department, establishment, or agency.
(d) No issuer of municipal securities or officer or employee
thereof acting in the course of his official duties as such
shall be deemed to be a ``broker'', ``dealer'', or ``municipal
securities dealer'' solely by reason of buying, selling, or
effecting transactions in the issuer's securities.
(e) Charitable Organizations.--
(1) Exemption.--Notwithstanding any other provision
of this title, but subject to paragraph (2) of this
subsection, a charitable organization, as defined in
section 3(c)(10)(D) of the Investment Company Act of
1940, or any trustee, director, officer, employee, or
volunteer of such a charitable organization acting
within the scope of such person's employment or duties
with such organization, shall not be deemed to be a
``broker'', ``dealer'', ``municipal securities
broker'', ``municipal securities dealer'', ``government
securities broker'', or ``government securities
dealer'' for purposes of this title solely because such
organization or person buys, holds, sells, or trades in
securities for its own account in its capacity as
trustee or administrator of, or otherwise on behalf of
or for the account of--
(A) such a charitable organization;
(B) a fund that is excluded from the
definition of an investment company under
section 3(c)(10)(B) of the Investment Company
Act of 1940; or
(C) a trust or other donative instrument
described in section 3(c)(10)(B) of the
Investment Company Act of 1940, or the settlors
(or potential settlors) or beneficiaries of any
such trust or other instrument.
(2) Limitation on compensation.--The exemption
provided under paragraph (1) shall not be available to
any charitable organization, or any trustee, director,
officer, employee, or volunteer of such a charitable
organization, unless each person who, on or after 90
days after the date of enactment of this subsection,
solicits donations on behalf of such charitable
organization from any donor to a fund that is excluded
from the definition of an investment company under
section 3(c)(10)(B) of the Investment Company Act of
1940, is either a volunteer or is engaged in the
overall fund raising activities of a charitable
organization and receives no commission or other
special compensation based on the number or the value
of donations collected for the fund.
(f) Consideration of Promotion of Efficiency, Competition,
and Capital Formation.--Whenever pursuant to this title the
Commission is engaged in rulemaking, or in the review of a rule
of a self-regulatory organization, and is required to consider
or determine whether an action is necessary or appropriate in
the public interest, the Commission shall also consider, in
addition to the protection of investors, whether the action
will promote efficiency, competition, and capital formation.
(g) Church Plans.--No church plan described in section 414(e)
of the Internal Revenue Code of 1986, no person or entity
eligible to establish and maintain such a plan under the
Internal Revenue Code of 1986, no company or account that is
excluded from the definition of an investment company under
section 3(c)(14) of the Investment Company Act of 1940, and no
trustee, director, officer or employee of or volunteer for such
plan, company, account, person, or entity, acting within the
scope of that person's employment or activities with respect to
such plan, shall be deemed to be a ``broker'', ``dealer'',
``municipal securities broker'', ``municipal securities
dealer'', ``government securities broker'', ``government
securities dealer'', ``clearing agency'', or ``transfer agent''
for purposes of this title--
(1) solely because such plan, company, person, or
entity buys, holds, sells, trades in, or transfers
securities or acts as an intermediary in making
payments in connection with transactions in securities
for its own account in its capacity as trustee or
administrator of, or otherwise on behalf of, or for the
account of, any church plan, company, or account that
is excluded from the definition of an investment
company under section 3(c)(14) of the Investment
Company Act of 1940; and
(2) if no such person or entity receives a commission
or other transaction-related sales compensation in
connection with any activities conducted in reliance on
the exemption provided by this subsection.
(h) Limited Exemption for Funding Portals.--
(1) In general.--The Commission shall, by rule,
exempt, conditionally or unconditionally, a registered
funding portal from the requirement to register as a
broker or dealer under section 15(a)(1), provided that
such funding portal--
(A) remains subject to the examination,
enforcement, and other rulemaking authority of
the Commission;
(B) is a member of a national securities
association registered under section 15A; and
(C) is subject to such other requirements
under this title as the Commission determines
appropriate under such rule.
(2) National securities association membership.--For
purposes of sections 15(b)(8) and 15A, the term
``broker or dealer'' includes a funding portal and the
term ``registered broker or dealer'' includes a
registered funding portal, except to the extent that
the Commission, by rule, determines otherwise, provided
that a national securities association shall only
examine for and enforce against a registered funding
portal rules of such national securities association
written specifically for registered funding portals.
* * * * * * *
periodical and other reports
Sec. 13. (a) Every issuer of a security registered pursuant
to section 12 of this title shall file with the Commission, in
accordance with such rules and regulations as the Commission
may prescribe as necessary or appropriate for the proper
protection of investors and to insure fair dealing in the
security--
(1) such information and documents (and such copies
thereof) as the Commission shall require to keep
reasonably current the information and documents
required to be included in or filed with an application
or registration statement filed pursuant to section 12,
except that the Commission may not require the filing
of any material contract wholly executed before July 1,
1962.
(2) such annual reports (and such copies thereof),
certified if required by the rules and regulations of
the Commission by independent public accountants, and
such quarterly reports (and such copies thereof), as
the Commission may prescribe.
Every issuer of a security registered on a national securities
exchange shall also file a duplicate original of such
information, documents, and reports with the exchange. In any
registration statement, periodic report, or other reports to be
filed with the Commission, an emerging growth company need not
present selected financial data in accordance with section
229.301 of title 17, Code of Federal Regulations, for any
period prior to the earliest audited period presented in
connection with its first registration statement that became
effective under this Act or the Securities Act of 1933 and,
with respect to any such statement or reports, an emerging
growth company may not be required to comply with any new or
revised financial accounting standard until such date that a
company that is not an issuer (as defined under section 2(a) of
the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(a))) is required
to comply with such new or revised accounting standard, if such
standard applies to companies that are not issuers. The
previous sentence shall apply, to the same extent as such
sentence applies to an emerging growth company, to a recent
emerging growth company.
(b)(1) The Commission may prescribe, in regard to reports
made pursuant to this title, the form or forms in which the
required information shall be set forth, the items or details
to be shown in the balance sheet and the earnings statement,
and the methods to be followed in the preparation of reports,
in the appraisal or valuation of assets and liabilities, in the
determination of depreciation and depletion, in the
differentiation of recurring and nonrecurring income, in the
differentiation of investment and operating income, and in the
preparation, where the Commission deems it necessary or
desirable, of separate and/or consolidated balance sheets or
income accounts of any person directly or indirectly
controlling or controlled by the issuer, or any person under
direct or indirect common control with the issuer; but in the
case of the reports of any person whose methods of accounting
are prescribed under the provisions of any law of the United
States, or any rule or regulation thereunder, the rules and
regulations of the Commission with respect to reports shall not
be inconsistent with the requirements imposed by such law or
rule or regulation in respect of the same subject matter
(except that such rules and regulations of the Commission may
be inconsistent with such requirements to the extent that the
Commission determines that the public interest or the
protection of investors so requires).
(2) Every issuer which has a class of securities registered
pursuant to section 12 of this title and every issuer which is
required to file reports pursuant to section 15(d) of this
title shall--
(A) make and keep books, records, and accounts,
which, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets
of the issuer;
(B) devise and maintain a system of internal
accounting controls sufficient to provide reasonable
assurances that--
(i) transactions are executed in accordance
with management's general or specific
authorization;
(ii) transactions are recorded as necessary
(I) to permit preparation of financial
statements in conformity with generally
accepted accounting principles or any other
criteria applicable to such statements, and
(II) to maintain accountability for assets;
(iii) access to assets is permitted only in
accordance with management's general or
specific authorization; and
(iv) the recorded accountability for assets
is compared with the existing assets at
reasonable intervals and appropriate action is
taken with respect to any differences; and
(C) notwithstanding any other provision of law, pay
the allocable share of such issuer of a reasonable
annual accounting support fee or fees, determined in
accordance with section 109 of the Sarbanes-Oxley Act
of 2002.
(3)(A) With respect to matters concerning the national
security of the United States, no duty or liability under
paragraph (2) of this subsection shall be imposed upon any
person acting in cooperation with the head of any Federal
department or agency responsible for such matters if such act
in cooperation with such head of a department or agency was
done upon the specific, written directive of the head of such
department or agency pursuant to Presidential authority to
issue such directives. Each directive issued under this
paragraph shall set forth the specific facts and circumstances
with respect to which the provisions of this paragraph are to
be invoked. Each such directive shall, unless renewed in
writing, expire one year after the date of issuance.
(B) Each head of a Federal department or agency of the United
States who issues a directive pursuant to this paragraph shall
maintain a complete file of all such directives and shall, on
October 1 of each year, transmit a summary of matters covered
by such directives in force at any time during the previous
year to the Permanent Select Committee on Intelligence of the
House of Representatives and the Select Committee on
Intelligence of the Senate.
(4) No criminal liability shall be imposed for failing to
comply with the requirements of paragraph (2) of this
subsection except as provided in paragraph (5) of this
subsection.
(5) No person shall knowingly circumvent or knowingly fail to
implement a system of internal accounting controls or knowingly
falsify any book, record, or account described in paragraph
(2).
(6) Where an issuer which has a class of securities
registered pursuant to section 12 of this title or an issuer
which is required to file reports pursuant to section 15(d) of
this title holds 50 per centum or less of the voting power with
respect to a domestic or foreign firm, the provisions of
paragraph (2) require only that the issuer proceed in good
faith to use its influence, to the extent reasonable under the
issuer's circumstances, to cause such domestic or foreign firm
to devise and maintain a system of internal accounting controls
consistent with paragraph (2). Such circumstances include the
relative degree of the issuer's ownership of the domestic or
foreign firm and the laws and practices governing the business
operations of the country in which such firm is located. An
issuer which demonstrates good faith efforts to use such
influence shall be conclusively presumed to have complied with
the requirements of paragraph (2).
(7) For the purpose of paragraph (2) of this subsection, the
terms ``reasonable assurances'' and ``reasonable detail'' mean
such level of detail and degree of assurance as would satisfy
prudent officials in the conduct of their own affairs.
(c) If in the judgment of the Commission any report required
under subsection (a) is inapplicable to any specified class or
classes of issuers, the Commission shall require in lieu
thereof the submission of such reports of comparable character
as it may deem applicable to such class or classes of issuers.
(d)(1) Any person who, after acquiring directly or indirectly
the beneficial ownership of any equity security of a class
which is registered pursuant to section 12 of this title, or
any equity security of an insurance company which would have
been required to be so registered except for the exemption
contained in section 12(g)(2)(G) of this title, or any equity
security issued by a closed-end investment company registered
under the Investment Company Act of 1940 or any equity security
issued by a Native Corporation pursuant to section 37(d)(6) of
the Alaska Native Claims Settlement Act, or otherwise becomes
or is deemed to become a beneficial owner of any of the
foregoing upon the purchase or sale of a security-based swap
that the Commission may define by rule, and is directly or
indirectly the beneficial owner of more than 5 per centum of
such class shall, within ten days after such acquisition or
within such shorter time as the Commission may establish by
rule, file with the Commission, a statement containing such of
the following information, and such additional information, as
the Commission may by rules and regulations, prescribe as
necessary or appropriate in the public interest or for the
protection of investors--
(A) the background, and identity, residence, and
citizenship of, and the nature of such beneficial
ownership by, such person and all other persons by whom
or on whose behalf the purchases have been or are to be
effected;
(B) the source and amount of the funds or other
consideration used or to be used in making the
purchases, and if any part of the purchase price is
represented or is to be represented by funds or other
consideration borrowed or otherwise obtained for the
purpose of acquiring, holding, or trading such
security, a description of the transaction and the
names of the parties thereto, except that where a
source of funds is a loan made in the ordinary course
of business by a bank, as defined in section 3(a)(6) of
this title, if the person filing such statement so
requests, the name of the bank shall not be made
available to the public;
(C) if the purpose of the purchases or prospective
purchases is to acquire control of the business of the
issuer of the securities any plans or proposals which
such persons may have to liquidate such issuer, to sell
its assets to or merge it with any other persons, or to
make any other major change in its business or
corporate structure;
(D) the number of shares of such security which are
beneficially owned, and the number of shares concerning
which there is a right to acquire, directly or
indirectly, by (i) such person, and (ii) by each
associate of such person, giving the background,
identity, residence, and citizenship of each such
associate; and
(E) information as to any contracts, arrangements, or
understandings with any person with respect to any
securities of the issuer, including but not limited to
transfer of any of the securities, joint ventures, loan
or option arrangements, puts or calls, guaranties of
loans, guaranties against loss or guaranties of
profits, division of losses or profits, or the giving
or withholding of proxies, naming the persons with whom
such contracts, arrangements, or understandings have
been entered into, and giving the details thereof.
(2) If any material change occurs in the facts set forth in
the statement filed with the Commission, an amendment shall be
filed with the Commission, in accordance with such rules and
regulations as the Commission may prescribe as necessary or
appropriate in the public interest or for the protection of
investors.
(3) When two or more persons act as a partnership, limited
partnership, syndicate, or other group for the purpose of
acquiring, holding, or disposing of securities of an issuer,
such syndicate or group shall be deemed a ``person'' for the
purposes of this subsection.
(4) In determining, for purposes of this subsection, any
percentage of a class of any security, such class shall be
deemed to consist of the amount of the outstanding securities
of such class, exclusive of any securities of such class held
by or for the account of the issuer or a subsidiary of the
issuer.
(5) The Commission, by rule or regulation or by order, may
permit any person to file in lieu of the statement required by
paragraph (1) of this subsection or the rules and regulations
thereunder, a notice stating the name of such person, the
number of shares of any equity securities subject to paragraph
(1) which are owned by him, the date of their acquisition and
such other information as the Commission may specify, if it
appears to the Commission that such securities were acquired by
such person in the ordinary course of his business and were not
acquired for the purpose of and do not have the effect of
changing or influencing the control of the issuer nor in
connection with or as a participant in any transaction having
such purpose or effect.
(6) The provisions of this subsection shall not apply to--
(A) any acquisition or offer to acquire securities
made or proposed to be made by means of a registration
statement under the Securities Act of 1933;
(B) any acquisition of the beneficial ownership of a
security which, together with all other acquisitions by
the same person of securities of the same class during
the preceding twelve months, does not exceed 2 per
centum of that class;
(C) any acquisition of an equity security by the
issuer of such security;
(D) any acquisition or proposed acquisition of a
security which the Commission, by rules or regulations
or by order, shall exempt from the provisions of this
subsection as not entered into for the purpose of, and
not having the effect of, changing or influencing the
control of the issuer or otherwise as not comprehended
within the purposes of this subsection.
(e)(1) It shall be unlawful for an issuer which has a class
of equity securities registered pursuant to section 12 of this
title, or which is a closed-end investment company registered
under the Investment Company Act of 1940, to purchase any
equity security issued by it if such purchase is in
contravention of such rules and regulations as the Commission,
in the public interest or for the protection of investors, may
adopt (A) to define acts and practices which are fraudulent,
deceptive, or manipulative, and (B) to prescribe means
reasonably designed to prevent such acts and practices. Such
rules and regulations may require such issuer to provide
holders of equity securities of such class with such
information relating to the reasons for such purchase, the
source of funds, the number of shares to be purchased, the
price to be paid for such securities, the method of purchase,
and such additional information, as the Commission deems
necessary or appropriate in the public interest or for the
protection of investors, or which the Commission deems to be
material to a determination whether such security should be
sold.
(2) For the purpose of this subsection, a purchase by or for
the issuer or any person controlling, controlled by, or under
common control with the issuer, or a purchase subject to
control of the issuer or any such person, shall be deemed to be
a purchase by the issuer. The Commission shall have power to
make rules and regulations implementing this paragraph in the
public interest and for the protection of investors, including
exemptive rules and regulations covering situations in which
the Commission deems it unnecessary or inappropriate that a
purchase of the type described in this paragraph shall be
deemed to be a purchase by the issuer for purposes of some or
all of the provisions of paragraph (1) of this subsection.
(3) At the time of filing such statement as the Commission
may require by rule pursuant to paragraph (1) of this
subsection, the person making the filing shall pay to the
Commission a fee at a rate that, subject to paragraph (4), is
equal to $92 per $1,000,000 of the value of securities proposed
to be purchased. The fee shall be reduced with respect to
securities in an amount equal to any fee paid with respect to
any securities issued in connection with the proposed
transaction under section 6(b) of the Securities Act of 1933,
or the fee paid under that section shall be reduced in an
amount equal to the fee paid to the Commission in connection
with such transaction under this paragraph.
(4) Annual adjustment.--For each fiscal year, the
Commission shall by order adjust the rate required by
paragraph (3) for such fiscal year to a rate that is
equal to the rate (expressed in dollars per million)
that is applicable under section 6(b) of the Securities
Act of 1933 for such fiscal year.
(5) Fee collections.--Fees collected pursuant to this
subsection for fiscal year 2012 and each fiscal year
thereafter shall be deposited and credited as general
revenue of the Treasury and shall not be available for
obligation.
(6) Effective date; publication.--In exercising its
authority under this subsection, the Commission shall
not be required to comply with the provisions of
section 553 of title 5, United States Code. An adjusted
rate prescribed under paragraph (4) shall be published
and take effect in accordance with section 6(b) of the
Securities Act of 1933 (15 U.S.C. 77f(b)).
(7) Pro rata application.--The rates per $1,000,000
required by this subsection shall be applied pro rata
to amounts and balances of less than $1,000,000.
(f)(1) Every institutional investment manager which uses the
mails, or any means or instrumentality of interstate commerce
in the course of its business as an institutional investment
manager and which exercises investment discretion with respect
to accounts holding equity securities of a class described in
section 13(d)(1) of this title having an aggregate fair market
value on the last trading day in any of the preceding twelve
months of at least $100,000,000 or such lesser amount (but in
no case less than $10,000,000) as the Commission, by rule, may
determine, shall file reports with the Commission in such form,
for such periods, and at such times after the end of such
periods as the Commission, by rule, may prescribe, but in no
event shall such reports be filed for periods longer than one
year or shorter than one quarter. Such reports shall include
for each such equity security held on the last day of the
reporting period by accounts (in aggregate or by type as the
Commission, by rule, may prescribe) with respect to which the
institutional investment manager exercises investment
discretion (other than securities held in amounts which the
Commission, by rule, determines to be insignificant for
purposes of this subsection), the name of the issuer and the
title, class, CUSIP number, number of shares or principal
amount, and aggregate fair market value of each such security.
Such reports may also include for accounts (in aggregate or by
type) with respect to which the institutional investment
manager exercises investment discretion such of the following
information as the Commission, by rule, prescribes--
(A) the name of the issuer and the title, class,
CUSIP number, number of shares or principal amount, and
aggregate fair market value or cost or amortized cost
of each other security (other than an exempted
security) held on the last day of the reporting period
by such accounts;
(B) the aggregate fair market value or cost or
amortized cost of exempted securities (in aggregate or
by class) held on the last day of the reporting period
by such accounts;
(C) the number of shares of each equity security of a
class described in section 13(d)(1) of this title held
on the last day of the reporting period by such
accounts with respect to which the institutional
investment manager possesses sole or shared authority
to exercise the voting rights evidenced by such
securities;
(D) the aggregate purchases and aggregate sales
during the reporting period of each security (other
than an exempted security) effected by or for such
accounts; and
(E) with respect to any transaction or series of
transactions having a market value of at least $500,000
or such other amount as the Commission, by rule, may
determine, effected during the reporting period by or
for such accounts in any equity security of a class
described in section 13(d)(1) of this title--
(i) the name of the issuer and the title,
class, and CUSIP number of the security;
(ii) the number of shares or principal amount
of the security involved in the transaction;
(iii) whether the transaction was a purchase
or sale;
(iv) the per share price or prices at which
the transaction was effected;
(v) the date or dates of the transaction;
(vi) the date or dates of the settlement of
the transaction;
(vii) the broker or dealer through whom the
transaction was effected;
(viii) the market or markets in which the
transaction was effected; and
(ix) such other related information as the
Commission, by rule, may prescribe.
(2) The Commission shall prescribe rules providing
for the public disclosure of the name of the issuer and
the title, class, CUSIP number, aggregate amount of the
number of short sales of each security, and any
additional information determined by the Commission
following the end of the reporting period. At a
minimum, such public disclosure shall occur every
month.
(3) The Commission, by rule or order, may exempt,
conditionally or unconditionally, any institutional investment
manager or security or any class of institutional investment
managers or securities from any or all of the provisions of
this subsection or the rules thereunder.
(4) The Commission shall make available to the public for a
reasonable fee a list of all equity securities of a class
described in section 13(d)(1) of this title, updated no less
frequently than reports are required to be filed pursuant to
paragraph (1) of this subsection. The Commission shall tabulate
the information contained in any report filed pursuant to this
subsection in a manner which will, in the view of the
Commission, maximize the usefulness of the information to other
Federal and State authorities and the public. Promptly after
the filing of any such report, the Commission shall make the
information contained therein conveniently available to the
public for a reasonable fee in such form as the Commission, by
rule, may prescribe, except that the Commission, as it
determines to be necessary or appropriate in the public
interest or for the protection of investors, may delay or
prevent public disclosure of any such information in accordance
with section 552 of title 5, United States Code.
Notwithstanding the preceding sentence, any such information
identifying the securities held by the account of a natural
person or an estate or trust (other than a business trust or
investment company) shall not be disclosed to the public.
(5) In exercising its authority under this subsection, the
Commission shall determine (and so state) that its action is
necessary or appropriate in the public interest and for the
protection of investors or to maintain fair and orderly markets
or, in granting an exemption, that its action is consistent
with the protection of investors and the purposes of this
subsection. In exercising such authority the Commission shall
take such steps as are within its power, including consulting
with the Comptroller General of the United States, the Director
of the Office of Management and Budget, the appropriate
regulatory agencies, Federal and State authorities which,
directly or indirectly, require reports from institutional
investment managers of information substantially similar to
that called for by this subsection, national securities
exchanges, and registered securities associations, (A) to
achieve uniform, centralized reporting of information
concerning the securities holdings of and transactions by or
for accounts with respect to which institutional investment
managers exercise investment discretion, and (B) consistently
with the objective set forth in the preceding subparagraph, to
avoid unnecessarily duplicative reporting by, and minimize the
compliance burden on, institutional investment managers.
Federal authorities which, directly or indirectly, require
reports from institutional investment managers of information
substantially similar to that called for by this subsection
shall cooperate with the Commission in the performance of its
responsibilities under the preceding sentence. An institutional
investment manager which is a bank, the deposits of which are
insured in accordance with the Federal Deposit Insurance Act,
shall file with the appropriate regulatory agency a copy of
every report filed with the Commission pursuant to this
subsection.
(6)(A) For purposes of this subsection the term
``institutional investment manager'' includes any person, other
than a natural person, investing in or buying and selling
securities for its own account, and any person exercising
investment discretion with respect to the account of any other
person.
(B) The Commission shall adopt such rules as it deems
necessary or appropriate to prevent duplicative reporting
pursuant to this subsection by two or more institutional
investment managers exercising investment discretion with
respect to the same amount.
(g)(1) Any person who is directly or indirectly the
beneficial owner of more than 5 per centum of any security of a
class described in subsection (d)(1) of this section or
otherwise becomes or is deemed to become a beneficial owner of
any security of a class described in subsection (d)(1) upon the
purchase or sale of a security-based swap that the Commission
may define by ruleshall file with the Commission a statement
setting forth, in such form and at such time as the Commission
may, by rule, prescribe--
(A) such person's identity, residence, and
citizenship; and
(B) the number and description of the shares in which
such person has an interest and the nature of such
interest.
(2) If any material change occurs in the facts set forth in
the statement filed with the Commission, an amendment shall be
filed with the Commission, in accordance with such rules and
regulations as the Commission may prescribe as necessary or
appropriate in the public interest or for the protection of
investors.
(3) When two or more persons act as a partnership, limited
partnership, syndicate, or other group for the purpose of
acquiring, holding, or disposing of securities of an issuer,
such syndicate or group shall be deemed a ``person'' for the
purposes of this subsection.
(4) In determining, for purposes of this subsection, any
percentage of a class of any security, such class shall be
deemed to consist of the amount of the outstanding securities
of such class, exclusive of any securities of such class held
by or for the account of the issuer or a subsidiary of the
issuer.
(5) In exercising its authority under this subsection, the
Commission shall take such steps as it deems necessary or
appropriate in the public interest or for the protection of
investors (A) to achieve centralized reporting of information
regarding ownership, (B) to avoid unnecessarily duplicative
reporting by and minimize the compliance burden on persons
required to report, and (C) to tabulate and promptly make
available the information contained in any report filed
pursuant to this subsection in a manner which will, in the view
of the Commission, maximize the usefulness of the information
to other Federal and State agencies and the public.
(6) The Commission may, by rule or order, exempt, in whole or
in part, any person or class of persons from any or all of the
reporting requirements of this subsection as it deems necessary
or appropriate in the public interest or for the protection of
investors.
(h) Large Trader Reporting.--
(1) Identification requirements for large traders.--
For the purpose of monitoring the impact on the
securities markets of securities transactions involving
a substantial volume or a large fair market value or
exercise value and for the purpose of otherwise
assisting the Commission in the enforcement of this
title, each large trader shall--
(A) provide such information to the
Commission as the Commission may by rule or
regulation prescribe as necessary or
appropriate, identifying such large trader and
all accounts in or through which such large
trader effects such transactions; and
(B) identify, in accordance with such rules
or regulations as the Commission may prescribe
as necessary or appropriate, to any registered
broker or dealer by or through whom such large
trader directly or indirectly effects
securities transactions, such large trader and
all accounts directly or indirectly maintained
with such broker or dealer by such large trader
in or through which such transactions are
effected.
(2) Recordkeeping and reporting requirements for
brokers and dealers.--Every registered broker or dealer
shall make and keep for prescribed periods such records
as the Commission by rule or regulation prescribes as
necessary or appropriate in the public interest, for
the protection of investors, or otherwise in
furtherance of the purposes of this title, with respect
to securities transactions that equal or exceed the
reporting activity level effected directly or
indirectly by or through such registered broker or
dealer of or for any person that such broker or dealer
knows is a large trader, or any person that such broker
or dealer has reason to know is a large trader on the
basis of transactions in securities effected by or
through such broker or dealer. Such records shall be
available for reporting to the Commission, or any self-
regulatory organization that the Commission shall
designate to receive such reports, on the morning of
the day following the day the transactions were
effected, and shall be reported to the Commission or a
self-regulatory organization designated by the
Commission immediately upon request by the Commission
or such a self-regulatory organization. Such records
and reports shall be in a format and transmitted in a
manner prescribed by the Commission (including, but not
limited to, machine readable form).
(3) Aggregation rules.--The Commission may prescribe
rules or regulations governing the manner in which
transactions and accounts shall be aggregated for the
purpose of this subsection, including aggregation on
the basis of common ownership or control.
(4) Examination of broker and dealer records.--All
records required to be made and kept by registered
brokers and dealers pursuant to this subsection with
respect to transactions effected by large traders are
subject at any time, or from time to time, to such
reasonable periodic, special, or other examinations by
representatives of the Commission as the Commission
deems necessary or appropriate in the public interest,
for the protection of investors, or otherwise in
furtherance of the purposes of this title.
(5) Factors to be considered in commission actions.--
In exercising its authority under this subsection, the
Commission shall take into account--
(A) existing reporting systems;
(B) the costs associated with maintaining
information with respect to transactions
effected by large traders and reporting such
information to the Commission or self-
regulatory organizations; and
(C) the relationship between the United
States and international securities markets.
(6) Exemptions.--The Commission, by rule, regulation,
or order, consistent with the purposes of this title,
may exempt any person or class of persons or any
transaction or class of transactions, either
conditionally or upon specified terms and conditions or
for stated periods, from the operation of this
subsection, and the rules and regulations thereunder.
(7) Authority of commission to limit disclosure of
information.--Notwithstanding any other provision of
law, the Commission shall not be compelled to disclose
any information required to be kept or reported under
this subsection. Nothing in this subsection shall
authorize the Commission to withhold information from
Congress, or prevent the Commission from complying with
a request for information from any other Federal
department or agency requesting information for
purposes within the scope of its jurisdiction, or
complying with an order of a court of the United States
in an action brought by the United States or the
Commission. For purposes of section 552 of title 5,
United States Code, this subsection shall be considered
a statute described in subsection (b)(3)(B) of such
section 552.
(8) Definitions.--For purposes of this subsection--
(A) the term ``large trader'' means every
person who, for his own account or an account
for which he exercises investment discretion,
effects transactions for the purchase or sale
of any publicly traded security or securities
by use of any means or instrumentality of
interstate commerce or of the mails, or of any
facility of a national securities exchange,
directly or indirectly by or through a
registered broker or dealer in an aggregate
amount equal to or in excess of the identifying
activity level;
(B) the term ``publicly traded security''
means any equity security (including an option
on individual equity securities, and an option
on a group or index of such securities) listed,
or admitted to unlisted trading privileges, on
a national securities exchange, or quoted in an
automated interdealer quotation system;
(C) the term ``identifying activity level''
means transactions in publicly traded
securities at or above a level of volume, fair
market value, or exercise value as shall be
fixed from time to time by the Commission by
rule or regulation, specifying the time
interval during which such transactions shall
be aggregated;
(D) the term ``reporting activity level''
means transactions in publicly traded
securities at or above a level of volume, fair
market value, or exercise value as shall be
fixed from time to time by the Commission by
rule, regulation, or order, specifying the time
interval during which such transactions shall
be aggregated; and
(E) the term ``person'' has the meaning given
in section 3(a)(9) of this title and also
includes two or more persons acting as a
partnership, limited partnership, syndicate, or
other group, but does not include a foreign
central bank.
(i) Accuracy of Financial Reports.--Each financial report
that contains financial statements, and that is required to be
prepared in accordance with (or reconciled to) generally
accepted accounting principles under this title and filed with
the Commission shall reflect all material correcting
adjustments that have been identified by a registered public
accounting firm in accordance with generally accepted
accounting principles and the rules and regulations of the
Commission.
(j) Off-Balance Sheet Transactions.--Not later than 180 days
after the date of enactment of the Sarbanes-Oxley Act of 2002,
the Commission shall issue final rules providing that each
annual and quarterly financial report required to be filed with
the Commission shall disclose all material off-balance sheet
transactions, arrangements, obligations (including contingent
obligations), and other relationships of the issuer with
unconsolidated entities or other persons, that may have a
material current or future effect on financial condition,
changes in financial condition, results of operations,
liquidity, capital expenditures, capital resources, or
significant components of revenues or expenses.
(k) Prohibition on Personal Loans to Executives.--
(1) In general.--It shall be unlawful for any issuer
(as defined in section 2 of the Sarbanes-Oxley Act of
2002), directly or indirectly, including through any
subsidiary, to extend or maintain credit, to arrange
for the extension of credit, or to renew an extension
of credit, in the form of a personal loan to or for any
director or executive officer (or equivalent thereof)
of that issuer. An extension of credit maintained by
the issuer on the date of enactment of this subsection
shall not be subject to the provisions of this
subsection, provided that there is no material
modification to any term of any such extension of
credit or any renewal of any such extension of credit
on or after that date of enactment.
(2) Limitation.--Paragraph (1) does not preclude any
home improvement and manufactured home loans (as that
term is defined in section 5 of the Home Owners' Loan
Act (12 U.S.C. 1464)), consumer credit (as defined in
section 103 of the Truth in Lending Act (15 U.S.C.
1602)), or any extension of credit under an open end
credit plan (as defined in section 103 of the Truth in
Lending Act (15 U.S.C. 1602)), or a charge card (as
defined in section 127(c)(4)(e) of the Truth in Lending
Act (15 U.S.C. 1637(c)(4)(e)), or any extension of
credit by a broker or dealer registered under section
15 of this title to an employee of that broker or
dealer to buy, trade, or carry securities, that is
permitted under rules or regulations of the Board of
Governors of the Federal Reserve System pursuant to
section 7 of this title (other than an extension of
credit that would be used to purchase the stock of that
issuer), that is--
(A) made or provided in the ordinary course
of the consumer credit business of such issuer;
(B) of a type that is generally made
available by such issuer to the public; and
(C) made by such issuer on market terms, or
terms that are no more favorable than those
offered by the issuer to the general public for
such extensions of credit.
(3) Rule of construction for certain loans.--
Paragraph (1) does not apply to any loan made or
maintained by an insured depository institution (as
defined in section 3 of the Federal Deposit Insurance
Act (12 U.S.C. 1813)), if the loan is subject to the
insider lending restrictions of section 22(h) of the
Federal Reserve Act (12 U.S.C. 375b).
(l) Real Time Issuer Disclosures.--Each issuer reporting
under section 13(a) or 15(d) shall disclose to the public on a
rapid and current basis such additional information concerning
material changes in the financial condition or operations of
the issuer, in plain English, which may include trend and
qualitative information and graphic presentations, as the
Commission determines, by rule, is necessary or useful for the
protection of investors and in the public interest.
(m) Public Availability of Security-based Swap Transaction
Data.--
(1) In general.--
(A) Definition of real-time public
reporting.--In this paragraph, the term ``real-
time public reporting'' means to report data
relating to a security-based swap transaction,
including price and volume, as soon as
technologically practicable after the time at
which the security-based swap transaction has
been executed.
(B) Purpose.--The purpose of this subsection
is to authorize the Commission to make
security-based swap transaction and pricing
data available to the public in such form and
at such times as the Commission determines
appropriate to enhance price discovery.
(C) General rule.--The Commission is
authorized to provide by rule for the public
availability of security-based swap
transaction, volume, and pricing data as
follows:
(i) With respect to those security-
based swaps that are subject to the
mandatory clearing requirement
described in section 3C(a)(1)
(including those security-based swaps
that are excepted from the requirement
pursuant to section 3C(g)), the
Commission shall require real-time
public reporting for such transactions.
(ii) With respect to those security-
based swaps that are not subject to the
mandatory clearing requirement
described in section 3C(a)(1), but are
cleared at a registered clearing
agency, the Commission shall require
real-time public reporting for such
transactions.
(iii) With respect to security-based
swaps that are not cleared at a
registered clearing agency and which
are reported to a security-based swap
data repository or the Commission under
section 3C(a)(6), the Commission shall
require real-time public reporting for
such transactions, in a manner that
does not disclose the business
transactions and market positions of
any person.
(iv) With respect to security-based
swaps that are determined to be
required to be cleared under section
3C(b) but are not cleared, the
Commission shall require real-time
public reporting for such transactions.
(D) Registered entities and public
reporting.--The Commission may require
registered entities to publicly disseminate the
security-based swap transaction and pricing
data required to be reported under this
paragraph.
(E) Rulemaking required.--With respect to the
rule providing for the public availability of
transaction and pricing data for security-based
swaps described in clauses (i) and (ii) of
subparagraph (C), the rule promulgated by the
Commission shall contain provisions--
(i) to ensure such information does
not identify the participants;
(ii) to specify the criteria for
determining what constitutes a large
notional security-based swap
transaction (block trade) for
particular markets and contracts;
(iii) to specify the appropriate time
delay for reporting large notional
security-based swap transactions (block
trades) to the public; and
(iv) that take into account whether
the public disclosure will materially
reduce market liquidity.
(F) Timeliness of reporting.--Parties to a
security-based swap (including agents of the
parties to a security-based swap) shall be
responsible for reporting security-based swap
transaction information to the appropriate
registered entity in a timely manner as may be
prescribed by the Commission.
(G) Reporting of swaps to registered
security-based swap data repositories.--Each
security-based swap (whether cleared or
uncleared) shall be reported to a registered
security-based swap data repository.
(H) Registration of clearing agencies.--A
clearing agency may register as a security-
based swap data repository.
(2) Semiannual and annual public reporting of
aggregate security-based swap data.--
(A) In general.--In accordance with
subparagraph (B), the Commission shall issue a
written report on a semiannual and annual basis
to make available to the public information
relating to--
(i) the trading and clearing in the
major security-based swap categories;
and
(ii) the market participants and
developments in new products.
(B) Use; consultation.--In preparing a report
under subparagraph (A), the Commission shall--
(i) use information from security-
based swap data repositories and
clearing agencies; and
(ii) consult with the Office of the
Comptroller of the Currency, the Bank
for International Settlements, and such
other regulatory bodies as may be
necessary.
(C) Authority of commission.--The Commission
may, by rule, regulation, or order, delegate
the public reporting responsibilities of the
Commission under this paragraph in accordance
with such terms and conditions as the
Commission determines to be appropriate and in
the public interest.
(n) Security-based Swap Data Repositories.--
(1) Registration requirement.--It shall be unlawful
for any person, unless registered with the Commission,
directly or indirectly, to make use of the mails or any
means or instrumentality of interstate commerce to
perform the functions of a security-based swap data
repository.
(2) Inspection and examination.--Each registered
security-based swap data repository shall be subject to
inspection and examination by any representative of the
Commission.
(3) Compliance with core principles.--
(A) In general.--To be registered, and
maintain registration, as a security-based swap
data repository, the security-based swap data
repository shall comply with--
(i) the requirements and core
principles described in this
subsection; and
(ii) any requirement that the
Commission may impose by rule or
regulation.
(B) Reasonable discretion of security-based
swap data repository.--Unless otherwise
determined by the Commission, by rule or
regulation, a security-based swap data
repository described in subparagraph (A) shall
have reasonable discretion in establishing the
manner in which the security-based swap data
repository complies with the core principles
described in this subsection.
(4) Standard setting.--
(A) Data identification.--
(i) In general.--In accordance with
clause (ii), the Commission shall
prescribe standards that specify the
data elements for each security-based
swap that shall be collected and
maintained by each registered security-
based swap data repository.
(ii) Requirement.--In carrying out
clause (i), the Commission shall
prescribe consistent data element
standards applicable to registered
entities and reporting counterparties.
(B) Data collection and maintenance.--The
Commission shall prescribe data collection and
data maintenance standards for security-based
swap data repositories.
(C) Comparability.--The standards prescribed
by the Commission under this subsection shall
be comparable to the data standards imposed by
the Commission on clearing agencies in
connection with their clearing of security-
based swaps.
(5) Duties.--A security-based swap data repository
shall--
(A) accept data prescribed by the Commission
for each security-based swap under subsection
(b);
(B) confirm with both counterparties to the
security-based swap the accuracy of the data
that was submitted;
(C) maintain the data described in
subparagraph (A) in such form, in such manner,
and for such period as may be required by the
Commission;
(D)(i) provide direct electronic access to
the Commission (or any designee of the
Commission, including another registered
entity); and
(ii) provide the information described in
subparagraph (A) in such form and at such
frequency as the Commission may require to
comply with the public reporting requirements
set forth in subsection (m);
(E) at the direction of the Commission,
establish automated systems for monitoring,
screening, and analyzing security-based swap
data;
(F) maintain the privacy of any and all
security-based swap transaction information
that the security-based swap data repository
receives from a security-based swap dealer,
counterparty, or any other registered entity;
and
(G) on a confidential basis pursuant to
section 24, upon request, and after notifying
the Commission of the request, make available
security-based swap data obtained by the
security-based swap data repository, including
individual counterparty trade and position
data, to--
(i) each appropriate prudential
regulator;
(ii) the Financial Stability
Oversight Council;
(iii) the Commodity Futures Trading
Commission;
(iv) the Department of Justice; and
(v) any other person that the
Commission determines to be
appropriate, including--
(I) foreign financial
supervisors (including foreign
futures authorities);
(II) foreign central banks;
(III) foreign ministries; and
(IV) other foreign
authorities.
(H) Confidentiality agreement.--Before the
security-based swap data repository may share
information with any entity described in
subparagraph (G), the security-based swap data
repository shall receive a written agreement
from each entity stating that the entity shall
abide by the confidentiality requirements
described in section 24 relating to the
information on security-based swap transactions
that is provided.
(6) Designation of chief compliance officer.--
(A) In general.--Each security-based swap
data repository shall designate an individual
to serve as a chief compliance officer.
(B) Duties.--The chief compliance officer
shall--
(i) report directly to the board or
to the senior officer of the security-
based swap data repository;
(ii) review the compliance of the
security-based swap data repository
with respect to the requirements and
core principles described in this
subsection;
(iii) in consultation with the board
of the security-based swap data
repository, a body performing a
function similar to the board of the
security-based swap data repository, or
the senior officer of the security-
based swap data repository, resolve any
conflicts of interest that may arise;
(iv) be responsible for administering
each policy and procedure that is
required to be established pursuant to
this section;
(v) ensure compliance with this title
(including regulations) relating to
agreements, contracts, or transactions,
including each rule prescribed by the
Commission under this section;
(vi) establish procedures for the
remediation of noncompliance issues
identified by the chief compliance
officer through any--
(I) compliance office review;
(II) look-back;
(III) internal or external
audit finding;
(IV) self-reported error; or
(V) validated complaint; and
(vii) establish and follow
appropriate procedures for the
handling, management response,
remediation, retesting, and closing of
noncompliance issues.
(C) Annual reports.--
(i) In general.--In accordance with
rules prescribed by the Commission, the
chief compliance officer shall annually
prepare and sign a report that contains
a description of--
(I) the compliance of the
security-based swap data
repository of the chief
compliance officer with respect
to this title (including
regulations); and
(II) each policy and
procedure of the security-based
swap data repository of the
chief compliance officer
(including the code of ethics
and conflict of interest
policies of the security-based
swap data repository).
(ii) Requirements.--A compliance
report under clause (i) shall--
(I) accompany each
appropriate financial report of
the security-based swap data
repository that is required to
be furnished to the Commission
pursuant to this section; and
(II) include a certification
that, under penalty of law, the
compliance report is accurate
and complete.
(7) Core principles applicable to security-based swap
data repositories.--
(A) Antitrust considerations.--Unless
necessary or appropriate to achieve the
purposes of this title, the swap data
repository shall not--
(i) adopt any rule or take any action
that results in any unreasonable
restraint of trade; or
(ii) impose any material
anticompetitive burden on the trading,
clearing, or reporting of transactions.
(B) Governance arrangements.--Each security-
based swap data repository shall establish
governance arrangements that are transparent--
(i) to fulfill public interest
requirements; and
(ii) to support the objectives of the
Federal Government, owners, and
participants.
(C) Conflicts of interest.--Each security-
based swap data repository shall--
(i) establish and enforce rules to
minimize conflicts of interest in the
decision-making process of the
security-based swap data repository;
and
(ii) establish a process for
resolving any conflicts of interest
described in clause (i).
(D) Additional duties developed by
commission.--
(i) In general.--The Commission may
develop 1 or more additional duties
applicable to security-based swap data
repositories.
(ii) Consideration of evolving
standards.--In developing additional
duties under subparagraph (A), the
Commission may take into consideration
any evolving standard of the United
States or the international community.
(iii) Additional duties for
commission designees.--The Commission
shall establish additional duties for
any registrant described in section
13(m)(2)(C) in order to minimize
conflicts of interest, protect data,
ensure compliance, and guarantee the
safety and security of the security-
based swap data repository.
(8) Required registration for security-based swap
data repositories.--Any person that is required to be
registered as a security-based swap data repository
under this subsection shall register with the
Commission, regardless of whether that person is also
licensed under the Commodity Exchange Act as a swap
data repository.
(9) Rules.--The Commission shall adopt rules
governing persons that are registered under this
subsection.
(o) Beneficial ownership.--For purposes ofthis section and
section 16, a person shall be deemed to acquire
beneficialownership of an equity security based on the purchase
or sale of asecurity-based swap, only to the extent that the
Commission, by rule,determines after consultation with the
prudential regulators and the Secretaryof the Treasury, that
the purchase or sale of the security-based swap, or classof
security-based swap, provides incidents of ownership comparable
to directownership of the equity security, and that it is
necessary to achieve thepurposes of this section that the
purchase or sale of the security-based swaps,or class of
security-based swap, be deemed the acquisition of
beneficialownership of the equitysecurity.
(p) Disclosures Relating to Conflict Minerals Originating in
the Democratic Republic of the Congo.--
(1) Regulations.--
(A) In general.--Not later than 270 days
after the date of the enactment of this
subsection, the Commission shall promulgate
regulations requiring any person described in
paragraph (2) to disclose annually, beginning
with the person's first full fiscal year that
begins after the date of promulgation of such
regulations, whether conflict minerals that are
necessary as described in paragraph (2)(B), in
the year for which such reporting is required,
did originate in the Democratic Republic of the
Congo or an adjoining country and, in cases in
which such conflict minerals did originate in
any such country, submit to the Commission a
report that includes, with respect to the
period covered by the report--
(i) a description of the measures
taken by the person to exercise due
diligence on the source and chain of
custody of such minerals, which
measures shall include an independent
private sector audit of such report
submitted through the Commission that
is conducted in accordance with
standards established by the
Comptroller General of the United
States, in accordance with rules
promulgated by the Commission, in
consultation with the Secretary of
State; and
(ii) a description of the products
manufactured or contracted to be
manufactured that are not DRC conflict
free (``DRC conflict free'' is defined
to mean the products that do not
contain minerals that directly or
indirectly finance or benefit armed
groups in the Democratic Republic of
the Congo or an adjoining country), the
entity that conducted the independent
private sector audit in accordance with
clause (i), the facilities used to
process the conflict minerals, the
country of origin of the conflict
minerals, and the efforts to determine
the mine or location of origin with the
greatest possible specificity.
(B) Certification.--The person submitting a
report under subparagraph (A) shall certify the
audit described in clause (i) of such
subparagraph that is included in such report.
Such a certified audit shall constitute a
critical component of due diligence in
establishing the source and chain of custody of
such minerals.
(C) Unreliable determination.--If a report
required to be submitted by a person under
subparagraph (A) relies on a determination of
an independent private sector audit, as
described under subparagraph (A)(i), or other
due diligence processes previously determined
by the Commission to be unreliable, the report
shall not satisfy the requirements of the
regulations promulgated under subparagraph
(A)(i).
(D) DRC conflict free.--For purposes of this
paragraph, a product may be labeled as ``DRC
conflict free'' if the product does not contain
conflict minerals that directly or indirectly
finance or benefit armed groups in the
Democratic Republic of the Congo or an
adjoining country.
(E) Information available to the public.--
Each person described under paragraph (2) shall
make available to the public on the Internet
website of such person the information
disclosed by such person under subparagraph
(A).
(2) Person described.--A person is described in this
paragraph if--
(A) the person is required to file reports
with the Commission pursuant to paragraph
(1)(A); and
(B) conflict minerals are necessary to the
functionality or production of a product
manufactured by such person.
(3) Revisions and waivers.--The Commission shall
revise or temporarily waive the requirements described
in paragraph (1) if the President transmits to the
Commission a determination that--
(A) such revision or waiver is in the
national security interest of the United States
and the President includes the reasons
therefor; and
(B) establishes a date, not later than 2
years after the initial publication of such
exemption, on which such exemption shall
expire.
(4) Termination of disclosure requirements.--The
requirements of paragraph (1) shall terminate on the
date on which the President determines and certifies to
the appropriate congressional committees, but in no
case earlier than the date that is one day after the
end of the 5-year period beginning on the date of the
enactment of this subsection, that no armed groups
continue to be directly involved and benefitting from
commercial activity involving conflict minerals.
(5) Definitions.--For purposes of this subsection,
the terms ``adjoining country'', ``appropriate
congressional committees'', ``armed group'', and
``conflict mineral'' have the meaning given those terms
under section 1502 of the Dodd-Frank Wall Street Reform
and Consumer Protection Act.
(q) Disclosure of Payments by Resource Extraction Issuers.--
(1) Definitions.--In this subsection--
(A) the term ``commercial development of oil,
natural gas, or minerals'' includes
exploration, extraction, processing, export,
and other significant actions relating to oil,
natural gas, or minerals, or the acquisition of
a license for any such activity, as determined
by the Commission;
(B) the term ``foreign government'' means a
foreign government, a department, agency, or
instrumentality of a foreign government, or a
company owned by a foreign government, as
determined by the Commission;
(C) the term ``payment''--
(i) means a payment that is--
(I) made to further the
commercial development of oil,
natural gas, or minerals; and
(II) not de minimis; and
(ii) includes taxes, royalties, fees
(including license fees), production
entitlements, bonuses, and other
material benefits, that the Commission,
consistent with the guidelines of the
Extractive Industries Transparency
Initiative (to the extent practicable),
determines are part of the commonly
recognized revenue stream for the
commercial development of oil, natural
gas, or minerals;
(D) the term ``resource extraction issuer''
means an issuer that--
(i) is required to file an annual
report with the Commission; and
(ii) engages in the commercial
development of oil, natural gas, or
minerals;
(E) the term ``interactive data format''
means an electronic data format in which pieces
of information are identified using an
interactive data standard; and
(F) the term ``interactive data standard''
means standardized list of electronic tags that
mark information included in the annual report
of a resource extraction issuer.
(2) Disclosure.--
(A) Information required.--Not later than 270
days after the date of enactment of the Dodd-
Frank Wall Street Reform and Consumer
Protection Act, the Commission shall issue
final rules that require each resource
extraction issuer to include in an annual
report of the resource extraction issuer
information relating to any payment made by the
resource extraction issuer, a subsidiary of the
resource extraction issuer, or an entity under
the control of the resource extraction issuer
to a foreign government or the Federal
Government for the purpose of the commercial
development of oil, natural gas, or minerals,
including--
(i) the type and total amount of such
payments made for each project of the
resource extraction issuer relating to
the commercial development of oil,
natural gas, or minerals; and
(ii) the type and total amount of
such payments made to each government.
(B) Consultation in rulemaking.--In issuing
rules under subparagraph (A), the Commission
may consult with any agency or entity that the
Commission determines is relevant.
(C) Interactive data format.--The rules
issued under subparagraph (A) shall require
that the information included in the annual
report of a resource extraction issuer be
submitted in an interactive data format.
(D) Interactive data standard.--
(i) In general.--The rules issued
under subparagraph (A) shall establish
an interactive data standard for the
information included in the annual
report of a resource extraction issuer.
(ii) Electronic tags.--The
interactive data standard shall include
electronic tags that identify, for any
payments made by a resource extraction
issuer to a foreign government or the
Federal Government--
(I) the total amounts of the
payments, by category;
(II) the currency used to
make the payments;
(III) the financial period in
which the payments were made;
(IV) the business segment of
the resource extraction issuer
that made the payments;
(V) the government that
received the payments, and the
country in which the government
is located;
(VI) the project of the
resource extraction issuer to
which the payments relate; and
(VII) such other information
as the Commission may determine
is necessary or appropriate in
the public interest or for the
protection of investors.
(E) International transparency efforts.--To
the extent practicable, the rules issued under
subparagraph (A) shall support the commitment
of the Federal Government to international
transparency promotion efforts relating to the
commercial development of oil, natural gas, or
minerals.
(F) Effective date.--With respect to each
resource extraction issuer, the final rules
issued under subparagraph (A) shall take effect
on the date on which the resource extraction
issuer is required to submit an annual report
relating to the fiscal year of the resource
extraction issuer that ends not earlier than 1
year after the date on which the Commission
issues final rules under subparagraph (A).
(3) Public availability of information.--
(A) In general.--To the extent practicable,
the Commission shall make available online, to
the public, a compilation of the information
required to be submitted under the rules issued
under paragraph (2)(A).
(B) Other information.--Nothing in this
paragraph shall require the Commission to make
available online information other than the
information required to be submitted under the
rules issued under paragraph (2)(A).
(4) Authorization of appropriations.--There are
authorized to be appropriated to the Commission such
sums as may be necessary to carry out this subsection.
(r) Disclosure of Certain Activities Relating to Iran.--
(1) In general.--Each issuer required to file an
annual or quarterly report under subsection (a) shall
disclose in that report the information required by
paragraph (2) if, during the period covered by the
report, the issuer or any affiliate of the issuer--
(A) knowingly engaged in an activity
described in subsection (a) or (b) of section 5
of the Iran Sanctions Act of 1996 (Public Law
104-172; 50 U.S.C. 1701 note);
(B) knowingly engaged in an activity
described in subsection (c)(2) of section 104
of the Comprehensive Iran Sanctions,
Accountability, and Divestment Act of 2010 (22
U.S.C. 8513) or a transaction described in
subsection (d)(1) of that section;
(C) knowingly engaged in an activity
described in section 105A(b)(2) of that Act; or
(D) knowingly conducted any transaction or
dealing with--
(i) any person the property and
interests in property of which are
blocked pursuant to Executive Order No.
13224 (66 Fed. Reg. 49079; relating to
blocking property and prohibiting
transactions with persons who commit,
threaten to commit, or support
terrorism);
(ii) any person the property and
interests in property of which are
blocked pursuant to Executive Order No.
13382 (70 Fed. Reg. 38567; relating to
blocking of property of weapons of mass
destruction proliferators and their
supporters); or
(iii) any person or entity identified
under section 560.304 of title 31, Code
of Federal Regulations (relating to the
definition of the Government of Iran)
without the specific authorization of a
Federal department or agency.
(2) Information required.--If an issuer or an
affiliate of the issuer has engaged in any activity
described in paragraph (1), the issuer shall disclose a
detailed description of each such activity, including--
(A) the nature and extent of the activity;
(B) the gross revenues and net profits, if
any, attributable to the activity; and
(C) whether the issuer or the affiliate of
the issuer (as the case may be) intends to
continue the activity.
(3) Notice of disclosures.--If an issuer reports
under paragraph (1) that the issuer or an affiliate of
the issuer has knowingly engaged in any activity
described in that paragraph, the issuer shall
separately file with the Commission, concurrently with
the annual or quarterly report under subsection (a), a
notice that the disclosure of that activity has been
included in that annual or quarterly report that
identifies the issuer and contains the information
required by paragraph (2).
(4) Public disclosure of information.--Upon receiving
a notice under paragraph (3) that an annual or
quarterly report includes a disclosure of an activity
described in paragraph (1), the Commission shall
promptly--
(A) transmit the report to--
(i) the President;
(ii) the Committee on Foreign Affairs
and the Committee on Financial Services
of the House of Representatives; and
(iii) the Committee on Foreign
Relations and the Committee on Banking,
Housing, and Urban Affairs of the
Senate; and
(B) make the information provided in the
disclosure and the notice available to the
public by posting the information on the
Internet website of the Commission.
(5) Investigations.--Upon receiving a report under
paragraph (4) that includes a disclosure of an activity
described in paragraph (1) (other than an activity
described in subparagraph (D)(iii) of that paragraph),
the President shall--
(A) initiate an investigation into the
possible imposition of sanctions under the Iran
Sanctions Act of 1996 (Public Law 104-172; 50
U.S.C. 1701 note), section 104 or 105A of the
Comprehensive Iran Sanctions, Accountability,
and Divestment Act of 2010, an Executive order
specified in clause (i) or (ii) of paragraph
(1)(D), or any other provision of law relating
to the imposition of sanctions with respect to
Iran, as applicable; and
(B) not later than 180 days after initiating
such an investigation, make a determination
with respect to whether sanctions should be
imposed with respect to the issuer or the
affiliate of the issuer (as the case may be).
(6) Sunset.--The provisions of this subsection shall
terminate on the date that is 30 days after the date on
which the President makes the certification described
in section 401(a) of the Comprehensive Iran Sanctions,
Accountability, and Divestment Act of 2010 (22 U.S.C.
8551(a)).
* * * * * * *
proxies
Sec. 14. (a)(1) It shall be unlawful for any person, by the
use of the mails or by any means or instrumentality of
interstate commerce or of any facility of a national securities
exchange or otherwise, in contravention of such rules and
regulations as the Commission may prescribe as necessary or
appropriate in the public interest or for the protection of
investors, to solicit or to permit the use of his name to
solicit any proxy or consent or authorization in respect of any
security (other than an exempted security) registered pursuant
to section 12 of this title.
(2) The rules and regulations prescribed by the Commission
under paragraph (1) may include--
(A) a requirement that a solicitation of proxy,
consent, or authorization by (or on behalf of) an
issuer include a nominee submitted by a shareholder to
serve on the board of directors of the issuer; and
(B) a requirement that an issuer follow a certain
procedure in relation to a solicitation described in
subparagraph (A).
(b)(1) It shall be unlawful for any member of a national
securities exchange, or any broker or dealer registered under
this title, or any bank, association, or other entity that
exercises fiduciary powers, in contravention of such rules and
regulations as the Commission may prescribe as necessary or
appropriate in the public interest or for the protection of
investors, to give, or to refrain from giving a proxy, consent,
authorization, or information statement in respect of any
security registered pursuant to section 12 of this title, or
any security issued by an investment company registered under
the Investment Company Act of 1940, and carried for the account
of a customer.
(2) With respect to banks, the rules and regulations
prescribed by the Commission under paragraph (1) shall not
require the disclosure of the names of beneficial owners of
securities in an account held by the bank on the date of
enactment of this paragraph unless the beneficial owner
consents to the disclosure. The provisions of this paragraph
shall not apply in the case of a bank which the Commission
finds has not made a good faith effort to obtain such consent
from such beneficial owners.
(c) Unless proxies, consents, or authorizations in respect of
a security registered pursuant to section 12 of this title, or
a security issued by an investment company registered under the
Investment Company Act of 1940, are solicited by or on behalf
of the management of the issuer from the holders of record of
such security in accordance with the rules and regulations
prescribed under subsection (a) of this section, prior to any
annual or other meeting of the holders of such security, such
issuer shall, in accordance with rules and regulations
prescribed by the Commission, file with the Commission and
transmit to all holders of record of such security information
substantially equivalent to the information which would be
required to be transmitted if a solicitation were made, but no
information shall be required to be filed or transmitted
pursuant to this subsection before July 1, 1964.
(d)(1) It shall be unlawful for any person, directly or
indirectly, by use of the mails or by any means or
instrumentality of interstate commerce or of any facility of a
national securities exchange or otherwise, to make a tender
offer for, or a request or invitation for tenders of, any class
of any equity security which is registered pursuant to section
12 of this title, or any equity security of an insurance
company which would have been required to be so registered
except for the exemption contained in section 12(g)(2)(G) of
this title, or any equity security issued by a closed-end
investment company registered under the Investment Company Act
of 1940, if, after consummation thereof, such person would,
directly or indirectly, be the beneficial owner of more than 5
per centum of such class, unless at the time copies of the
offer or request or invitation are first published or sent or
given to security holders such person has filed with the
Commission a statement containing such of the information
specified in section 13(d) of this title, and such additional
information as the Commission may by rules and regulations
prescribe as necessary or appropriate in the public interest or
for the protection of investors. All requests or invitations
for tenders or advertisements making a tender offer or
requesting or inviting tenders, of such a security shall be
filed as a part of such statement and shall contain such of the
information contained in such statement as the Commission may
by rules and regulations prescribe. Copies of any additional
material soliciting or requesting such tender offers subsequent
to the initial solicitation or request shall contain such
information as the Commission may by rules and regulations
prescribe as necessary or appropriate in the public interest or
for the protection of investors, and shall be filed with the
Commission not later than the time copies of such material are
first published or sent or given to security holders. Copies of
all statements, in the form in which such material is furnished
to security holders and the Commission, shall be sent to the
issuer not later than the date such material is first published
or sent or given to any security holders.
(2) When two or more persons act as a partnership, limited
partnership, syndicate, or other group for the purpose of
acquiring, holding, or disposing of securities of an issuer,
such syndicate or group shall be deemed a ``person'' for
purposes of this subsection.
(3) In determining, for purposes of this subsection, any
percentage of a class of any security, such class shall be
deemed to consist of the amount of the outstanding securities
of such class, exclusive of any securities of such class held
by or for the account of the issuer or a subsidiary of the
issuer.
(4) Any solicitation or recommendation to the holders of such
a security to accept or reject a tender offer or request or
invitation for tenders shall be made in accordance with such
rules and regulations as the Commission may prescribe as
necessary or appropriate in the public interest or for the
protection of investors.
(5) Securities deposited pursuant to a tender offer or
request or invitation for tenders may be withdrawn by or on
behalf of the depositor at any time until the expiration of
seven days after the time definitive copies of the offer or
request or invitation are first published or sent or given to
security holders, and at any time after sixty days from the
date of the original tender offer or request or invitation,
except as the Commission may otherwise prescribe by rules,
regulations, or order as necessary or appropriate in the public
interest or for the protection of investors.
(6) Where any person makes a tender offer, or request or
invitation for tenders, for less than all the outstanding
equity securities of a class, and where a greater number of
securities is deposited pursuant thereto within ten days after
copies of the offer or request or invitation are first
published or sent or given to security holders than such person
is bound or willing to take up and pay for, the securities
taken up shall be taken up as nearly as may be pro rata,
disregarding fractions, according to the number of securities
deposited by each depositor. The provisions of this subsection
shall also apply to securities deposited within ten days after
notice of an increase in the consideration offered to security
holders, as described in paragraph (7), is first published or
sent or given to security holders.
(7) Where any person varies the terms of a tender offer or
request or invitation for tenders before the expiration thereof
by increasing the consideration offered to holders of such
securities, such person shall pay the increased consideration
to each security holder whose securities are taken up and paid
for pursuant to the tender offer or request or invitation for
tenders whether or not such securities have been taken up by
such person before the variation of the tender offer or request
or invitation.
(8) The provisions of this subsection shall not apply to any
offer for, or request or invitation for tenders of, any
security--
(A) if the acquisition of such security, together
with all other acquisitions by the same person of
securities of the same class during the preceding
twelve months, would not exceed 2 per centum of that
class;
(B) by the issuer of such security; or
(C) which the Commission, by rules or regulations or
by order, shall exempt from the provisions of this
subsection as not entered into for the purpose of, and
not having the effect of, changing or influencing the
control of the issuer or otherwise as not comprehended
within the purposes of this subsection.
(e) It shall be unlawful for any person to make any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements made, in the light of
the circumstances under which they are made, not misleading, or
to engage in any fraudulent, deceptive, or manipulative acts or
practices, in connection with any tender offer or request or
invitation for tenders, or any solicitation of security holders
in opposition to or in favor of any such offer, request, or
invitation. The Commission shall, for the purposes of this
subsection, by rules and regulations define, and prescribe
means reasonably designed to prevent, such acts and practices
as are fraudulent, deceptive, or manipulative.
(f) If, pursuant to any arrangement or understanding with the
person or persons acquiring securities in a transaction subject
to subsection (d) of this section or subsection (d) of section
13 of this title, any persons are to be elected or designated
as directors of the issuer, otherwise than at a meeting of
security holders, and the persons so elected or designated will
constitute a majority of the directors of the issuer, then,
prior to the time any such person takes office as a director,
and in accordance with rules and regulations prescribed by the
Commission, the issuer shall file with the Commission, and
transmit to all holders of record of securities of the issuer
who would be entitled to vote at a meeting for election of
directors, information substantially equivalent to the
information which would be required by subsection (a) or (c) of
this section to be transmitted if such person or persons were
nominees for election as directors at a meeting of such
security holders.
(g)(1)(A) At the time of filing such preliminary proxy
solicitation material as the Commission may require by rule
pursuant to subsection (a) of this section that concerns an
acquisition, merger, consolidation, or proposed sale or other
disposition of substantially all the assets of a company, the
person making such filing, other than a company registered
under the Investment Company Act of 1940, shall pay to the
Commission the following fees:
(i) for preliminary proxy solicitation material
involving an acquisition, merger, or consolidation, if
there is a proposed payment of cash or transfer of
securities or property to shareholders, a fee at a rate
that, subject to paragraph (4), is equal to $92 per
$1,000,000 of such proposed payment, or of the value of
such securities or other property proposed to be
transferred; and
(ii) for preliminary proxy solicitation material
involving a proposed sale or other disposition of
substantially all of the assets of a company, a fee at
a rate that, subject to paragraph (4), is equal to $92
per $1,000,000 of the cash or of the value of any
securities or other property proposed to be received
upon such sale or disposition.
(B) The fee imposed under subparagraph (A) shall be reduced
with respect to securities in an amount equal to any fee paid
to the Commission with respect to such securities in connection
with the proposed transaction under section 6(b) of the
Securities Act of 1933 (15 U.S.C. 77f(b)), or the fee paid
under that section shall be reduced in an amount equal to the
fee paid to the Commission in connection with such transaction
under this subsection. Where two or more companies involved in
an acquisition, merger, consolidation, sale, or other
disposition of substantially all the assets of a company must
file such proxy material with the Commission, each shall pay a
proportionate share of such fee.
(2) At the time of filing such preliminary information
statement as the Commission may require by rule pursuant to
subsection (c) of this section, the issuer shall pay to the
Commission the same fee as required for preliminary proxy
solicitation material under paragraph (1) of this subsection.
(3) At the time of filing such statement as the Commission
may require by rule pursuant to subsection (d)(1) of this
section, the person making the filing shall pay to the
Commission a fee at a rate that, subject to paragraph (4), is
equal to $92 per $1,000,000 of the aggregate amount of cash or
of the value of securities or other property proposed to be
offered. The fee shall be reduced with respect to securities in
an amount equal to any fee paid with respect to such securities
in connection with the proposed transaction under section 6(b)
of the Securities Act of 1933 (15 U.S.C. 77f(b)), or the fee
paid under that section shall be reduced in an amount equal to
the fee paid to the Commission in connection with such
transaction under this subsection.
(4) Annual adjustment.--For each fiscal year, the
Commission shall by order adjust the rate required by
paragraphs (1) and (3) for such fiscal year to a rate
that is equal to the rate (expressed in dollars per
million) that is applicable under section 6(b) of the
Securities Act of 1933 (15 U.S.C. 77f(b)) for such
fiscal year.
(5) Fee collection.--Fees collected pursuant to this
subsection for fiscal year 2012 and each fiscal year
thereafter shall be deposited and credited as general
revenue of the Treasury and shall not be available for
obligation.
(6) Review; effective date; publication.--In
exercising its authority under this subsection, the
Commission shall not be required to comply with the
provisions of section 553 of title 5, United States
Code. An adjusted rate prescribed under paragraph (4)
shall be published and take effect in accordance with
section 6(b) of the Securities Act of 1933 (15 U.S.C.
77f(b)).
(7) Pro rata application.--The rates per $1,000,000
required by this subsection shall be applied pro rata
to amounts and balances of less than $1,000,000.
(8) Notwithstanding any other provision of law, the
Commission may impose fees, charges, or prices for matters not
involving any acquisition, merger, consolidation, sale, or
other disposition of assets described in this subsection, as
authorized by section 9701 of title 31, United States Code, or
otherwise.
(h) Proxy Solicitations and Tender Offers in Connection With
Limited Partnership Rollup Transactions.--
(1) Proxy rules to contain special provisions.--It
shall be unlawful for any person to solicit any proxy,
consent, or authorization concerning a limited
partnership rollup transaction, or to make any tender
offer in furtherance of a limited partnership rollup
transaction, unless such transaction is conducted in
accordance with rules prescribed by the Commission
under subsections (a) and (d) as required by this
subsection. Such rules shall--
(A) permit any holder of a security that is
the subject of the proposed limited partnership
rollup transaction to engage in preliminary
communications for the purpose of determining
whether to solicit proxies, consents, or
authorizations in opposition to the proposed
limited partnership rollup transaction, without
regard to whether any such communication would
otherwise be considered a solicitation of
proxies, and without being required to file
soliciting material with the Commission prior
to making that determination, except that--
(i) nothing in this subparagraph
shall be construed to limit the
application of any provision of this
title prohibiting, or reasonably
designed to prevent, fraudulent,
deceptive, or manipulative acts or
practices under this title; and
(ii) any holder of not less than 5
percent of the outstanding securities
that are the subject of the proposed
limited partnership rollup transaction
who engages in the business of buying
and selling limited partnership
interests in the secondary market shall
be required to disclose such ownership
interests and any potential conflicts
of interests in such preliminary
communications;
(B) require the issuer to provide to holders
of the securities that are the subject of the
limited partnership rollup transaction such
list of the holders of the issuer's securities
as the Commission may determine in such form
and subject to such terms and conditions as the
Commission may specify;
(C) prohibit compensating any person
soliciting proxies, consents, or authorizations
directly from security holders concerning such
a limited partnership rollup transaction--
(i) on the basis of whether the
solicited proxy, consent, or
authorization either approves or
disapproves the proposed limited
partnership rollup transaction; or
(ii) contingent on the approval,
disapproval, or completion of the
limited partnership rollup transaction;
(D) set forth disclosure requirements for
soliciting material distributed in connection
with a limited partnership rollup transaction,
including requirements for clear, concise, and
comprehensible disclosure with respect to--
(i) any changes in the business plan,
voting rights, form of ownership
interest, or the compensation of the
general partner in the proposed limited
partnership rollup transaction from
each of the original limited
partnerships;
(ii) the conflicts of interest, if
any, of the general partner;
(iii) whether it is expected that
there will be a significant difference
between the exchange values of the
limited partnerships and the trading
price of the securities to be issued in
the limited partnership rollup
transaction;
(iv) the valuation of the limited
partnerships and the method used to
determine the value of the interests of
the limited partners to be exchanged
for the securities in the limited
partnership rollup transaction;
(v) the differing risks and effects
of the limited partnership rollup
transaction for investors in different
limited partnerships proposed to be
included, and the risks and effects of
completing the limited partnership
rollup transaction with less than all
limited partnerships;
(vi) the statement by the general
partner required under subparagraph
(E);
(vii) such other matters deemed
necessary or appropriate by the
Commission;
(E) require a statement by the general
partner as to whether the proposed limited
partnership rollup transaction is fair or
unfair to investors in each limited
partnership, a discussion of the basis for that
conclusion, and an evaluation and a description
by the general partner of alternatives to the
limited partnership rollup transaction, such as
liquidation;
(F) provide that, if the general partner or
sponsor has obtained any opinion (other than an
opinion of counsel), appraisal, or report that
is prepared by an outside party and that is
materially related to the limited partnership
rollup transaction, such soliciting materials
shall contain or be accompanied by clear,
concise, and comprehensible disclosure with
respect to--
(i) the analysis of the transaction,
scope of review, preparation of the
opinion, and basis for and methods of
arriving at conclusions, and any
representations and undertakings with
respect thereto;
(ii) the identity and qualifications
of the person who prepared the opinion,
the method of selection of such person,
and any material past, existing, or
contemplated relationships between the
person or any of its affiliates and the
general partner, sponsor, successor, or
any other affiliate;
(iii) any compensation of the
preparer of such opinion, appraisal, or
report that is contingent on the
transaction's approval or completion;
and
(iv) any limitations imposed by the
issuer on the access afforded to such
preparer to the issuer's personnel,
premises, and relevant books and
records;
(G) provide that, if the general partner or
sponsor has obtained any opinion, appraisal, or
report as described in subparagraph (F) from
any person whose compensation is contingent on
the transaction's approval or completion or who
has not been given access by the issuer to its
personnel and premises and relevant books and
records, the general partner or sponsor shall
state the reasons therefor;
(H) provide that, if the general partner or
sponsor has not obtained any opinion on the
fairness of the proposed limited partnership
rollup transaction to investors in each of the
affected partnerships, such soliciting
materials shall contain or be accompanied by a
statement of such partner's or sponsor's
reasons for concluding that such an opinion is
not necessary in order to permit the limited
partners to make an informed decision on the
proposed transaction;
(I) require that the soliciting material
include a clear, concise, and comprehensible
summary of the limited partnership rollup
transaction (including a summary of the matters
referred to in clauses (i) through (vii) of
subparagraph (D) and a summary of the matter
referred to in subparagraphs (F), (G), and
(H)), with the risks of the limited partnership
rollup transaction set forth prominently in the
fore part thereof;
(J) provide that any solicitation or offering
period with respect to any proxy solicitation,
tender offer, or information statement in a
limited partnership rollup transaction shall be
for not less than the lesser of 60 calendar
days or the maximum number of days permitted
under applicable State law; and
(K) contain such other provisions as the
Commission determines to be necessary or
appropriate for the protection of investors in
limited partnership rollup transactions.
(2) Exemptions.--The Commission may, consistent with
the public interest, the protection of investors, and
the purposes of this title, exempt by rule or order any
security or class of securities, any transaction or
class of transactions, or any person or class of
persons, in whole or in part, conditionally or
unconditionally, from the requirements imposed pursuant
to paragraph (1) or from the definition contained in
paragraph (4).
(3) Effect on commission authority.--Nothing in this
subsection limits the authority of the Commission under
subsection (a) or (d) or any other provision of this
title or precludes the Commission from imposing, under
subsection (a) or (d) or any other provision of this
title, a remedy or procedure required to be imposed
under this subsection.
(4) Definition of limited partnership rollup
transaction.--Except as provided in paragraph (5), as
used in this subsection, the term ``limited partnership
rollup transaction'' means a transaction involving the
combination or reorganization of one or more limited
partnerships, directly or indirectly, in which--
(A) some or all of the investors in any of
such limited partnerships will receive new
securities, or securities in another entity,
that will be reported under a transaction
reporting plan declared effective before the
date of enactment of this subsection by the
Commission under section 11A;
(B) any of the investors' limited partnership
securities are not, as of the date of filing,
reported under a transaction reporting plan
declared effective before the date of enactment
of this subsection by the Commission under
section 11A;
(C) investors in any of the limited
partnerships involved in the transaction are
subject to a significant adverse change with
respect to voting rights, the term of existence
of the entity, management compensation, or
investment objectives; and
(D) any of such investors are not provided an
option to receive or retain a security under
substantially the same terms and conditions as
the original issue.
(5) Exclusions from definition.--Notwithstanding
paragraph (4), the term ``limited partnership rollup
transaction'' does not include--
(A) a transaction that involves only a
limited partnership or partnerships having an
operating policy or practice of retaining cash
available for distribution and reinvesting
proceeds from the sale, financing, or
refinancing of assets in accordance with such
criteria as the Commission determines
appropriate;
(B) a transaction involving only limited
partnerships wherein the interests of the
limited partners are repurchased, recalled, or
exchanged in accordance with the terms of the
preexisting limited partnership agreements for
securities in an operating company specifically
identified at the time of the formation of the
original limited partnership;
(C) a transaction in which the securities to
be issued or exchanged are not required to be
and are not registered under the Securities Act
of 1933;
(D) a transaction that involves only issuers
that are not required to register or report
under section 12, both before and after the
transaction;
(E) a transaction, except as the Commission
may otherwise provide by rule for the
protection of investors, involving the
combination or reorganization of one or more
limited partnerships in which a non-affiliated
party succeeds to the interests of a general
partner or sponsor, if--
(i) such action is approved by not
less than 66\2/3\ percent of the
outstanding units of each of the
participating limited partnerships; and
(ii) as a result of the transaction,
the existing general partners will
receive only compensation to which they
are entitled as expressly provided for
in the preexisting limited partnership
agreements; or
(F) a transaction, except as the Commission
may otherwise provide by rule for the
protection of investors, in which the
securities offered to investors are securities
of another entity that are reported under a
transaction reporting plan declared effective
before the date of enactment of this subsection
by the Commission under section 11A, if--
(i) such other entity was formed, and
such class of securities was reported
and regularly traded, not less than 12
months before the date on which
soliciting material is mailed to
investors; and
(ii) the securities of that entity
issued to investors in the transaction
do not exceed 20 percent of the total
outstanding securities of the entity,
exclusive of any securities of such
class held by or for the account of the
entity or a subsidiary of the entity.
(i) Disclosure of Pay Versus Performance.--The Commission
shall, by rule, require each issuer to disclose in any proxy or
consent solicitation material for an annual meeting of the
shareholders of the issuer a clear description of any
compensation required to be disclosed by the issuer under
section 229.402 of title 17, Code of Federal Regulations (or
any successor thereto), including, for any issuer other than an
emerging growth company or a recent emerging growth company,
information that shows the relationship between executive
compensation actually paid and the financial performance of the
issuer, taking into account any change in the value of the
shares of stock and dividends of the issuer and any
distributions. The disclosure under this subsection may include
a graphic representation of the information required to be
disclosed.
(j) Disclosure of Hedging by Employees and Directors.--The
Commission shall, by rule, require each issuer to disclose in
any proxy or consent solicitation material for an annual
meeting of the shareholders of the issuer whether any employee
or member of the board of directors of the issuer, or any
designee of such employee or member, is permitted to purchase
financial instruments (including prepaid variable forward
contracts, equity swaps, collars, and exchange funds) that are
designed to hedge or offset any decrease in the market value of
equity securities--
(1) granted to the employee or member of the board of
directors by the issuer as part of the compensation of
the employee or member of the board of directors; or
(2) held, directly or indirectly, by the employee or
member of the board of directors.
SEC. 14A. SHAREHOLDER APPROVAL OF EXECUTIVE COMPENSATION.
(a) Separate Resolution Required.--
(1) In general.--Not less frequently than once every
3 years, a proxy or consent or authorization for an
annual or other meeting of the shareholders for which
the proxy solicitation rules of the Commission require
compensation disclosure shall include a separate
resolution subject to shareholder vote to approve the
compensation of executives, as disclosed pursuant to
section 229.402 of title 17, Code of Federal
Regulations, or any successor thereto.
(2) Frequency of vote.--Not less frequently than once
every 6 years, a proxy or consent or authorization for
an annual or other meeting of the shareholders for
which the proxy solicitation rules of the Commission
require compensation disclosure shall include a
separate resolution subject to shareholder vote to
determine whether votes on the resolutions required
under paragraph (1) will occur every 1, 2, or 3 years.
(3) Effective date.--The proxy or consent or
authorization for the first annual or other meeting of
the shareholders occurring after the end of the 6-month
period beginning on the date of enactment of this
section shall include--
(A) the resolution described in paragraph
(1); and
(B) a separate resolution subject to
shareholder vote to determine whether votes on
the resolutions required under paragraph (1)
will occur every 1, 2, or 3 years.
(b) Shareholder Approval of Golden Parachute Compensation.--
(1) Disclosure.--In any proxy or consent solicitation
material (the solicitation of which is subject to the
rules of the Commission pursuant to subsection (a)) for
a meeting of the shareholders occurring after the end
of the 6-month period beginning on the date of
enactment of this section, at which shareholders are
asked to approve an acquisition, merger, consolidation,
or proposed sale or other disposition of all or
substantially all the assets of an issuer, the person
making such solicitation shall disclose in the proxy or
consent solicitation material, in a clear and simple
form in accordance with regulations to be promulgated
by the Commission, any agreements or understandings
that such person has with any named executive officers
of such issuer (or of the acquiring issuer, if such
issuer is not the acquiring issuer) concerning any type
of compensation (whether present, deferred, or
contingent) that is based on or otherwise relates to
the acquisition, merger, consolidation, sale, or other
disposition of all or substantially all of the assets
of the issuer and the aggregate total of all such
compensation that may (and the conditions upon which it
may) be paid or become payable to or on behalf of such
executive officer.
(2) Shareholder approval.--Any proxy or consent or
authorization relating to the proxy or consent
solicitation material containing the disclosure
required by paragraph (1) shall include a separate
resolution subject to shareholder vote to approve such
agreements or understandings and compensation as
disclosed, unless such agreements or understandings
have been subject to a shareholder vote under
subsection (a).
(c) Rule of Construction.--The shareholder vote referred to
in subsections (a) and (b) shall not be binding on the issuer
or the board of directors of an issuer, and may not be
construed--
(1) as overruling a decision by such issuer or board
of directors;
(2) to create or imply any change to the fiduciary
duties of such issuer or board of directors;
(3) to create or imply any additional fiduciary
duties for such issuer or board of directors; or
(4) to restrict or limit the ability of shareholders
to make proposals for inclusion in proxy materials
related to executive compensation.
(d) Disclosure of Votes.--Every institutional investment
manager subject to section 13(f) shall report at least annually
how it voted on any shareholder vote pursuant to subsections
(a) and (b), unless such vote is otherwise required to be
reported publicly by rule or regulation of the Commission.
(e) Exemption.--
(1) In general.--.--The Commission may, by rule or
order, exempt any other issuer or class of issuers from
the requirement under subsection (a) or (b). In
determining whether to make an exemption under this
subsection, the Commission shall take into account,
among other considerations, whether the requirements
under subsections (a) and (b) disproportionately
burdens small issuers.
(2) Treatment of emerging growth companies.--
(A) In general.--[An emerging growth company]
Any emerging growth company or recent emerging
growth company shall be exempt from the
requirements of subsections (a) and (b).
(B) Compliance after [termination of emerging
growth company treatment] exemption.--An issuer
that was [an emerging growth company but is no
longer an emerging growth company] exempt under
subparagraph (A) but is no longer exempt shall
include the first separate resolution described
under subsection (a)(1) not later than the end
of--
(i) in the case of an issuer that was
an emerging growth company for less
than 2 years after the date of first
sale of common equity securities of the
issuer pursuant to an effective
registration statement under the
Securities Act of 1933, the 3-year
period beginning on such date; and
(ii) in the case of any other issuer,
the 1-year period beginning on the date
the issuer is no longer an emerging
growth company or a recent emerging
growth company.
* * * * * * *
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INVESTOR PROTECTION AND SECURITIES REFORM ACT OF 2010
* * * * * * *
TITLE IX--INVESTOR PROTECTIONS AND IMPROVEMENTS TO THE REGULATION OF
SECURITIES
* * * * * * *
Subtitle E--Accountability and Executive Compensation
* * * * * * *
SEC. 953. EXECUTIVE COMPENSATION DISCLOSURES.
(a) Disclosure of Pay Versus Performance.--Section 14 of the
Securities Exchange Act of 1934 (15 U.S.C. 78n), as amended by
this title, is amended by adding at the end the following:
``(i) Disclosure of Pay Versus Performance.--The Commission
shall, by rule, require each issuer to disclose in any proxy or
consent solicitation material for an annual meeting of the
shareholders of the issuer a clear description of any
compensation required to be disclosed by the issuer under
section 229.402 of title 17, Code of Federal Regulations (or
any successor thereto), including information that shows the
relationship between executive compensation actually paid and
the financial performance of the issuer, taking into account
any change in the value of the shares of stock and dividends of
the issuer and any distributions. The disclosure under this
subsection may include a graphic representation of the
information required to be disclosed.''.
(b) Additional Disclosure Requirements.--
(1) In general.--The Commission shall amend section
229.402 of title 17, Code of Federal Regulations, to
require each issuer, other than an emerging growth
company[, as that term is defined in] or a recent
emerging growth company, as such terms are defined,
respectively, under section 3(a) of the Securities
Exchange Act of 1934, to disclose in any filing of the
issuer described in section 229.10(a) of title 17, Code
of Federal Regulations (or any successor thereto)--
(A) the median of the annual total
compensation of all employees of the issuer,
except the chief executive officer (or any
equivalent position) of the issuer;
(B) the annual total compensation of the
chief executive officer (or any equivalent
position) of the issuer; and
(C) the ratio of the amount described in
subparagraph (A) to the amount described in
subparagraph (B).
(2) Total compensation.--For purposes of this
subsection, the total compensation of an employee of an
issuer shall be determined in accordance with section
229.402(c)(2)(x) of title 17, Code of Federal
Regulations, as in effect on the day before the date of
enactment of this Act.
* * * * * * *
MINORITY VIEWS
H.R. 6130, the so-called ``Helping Startups Continue to
Grow Act,'' would enable certain public companies to avoid
compliance with key requirements of the federal securities
laws, such as disclosures of certain financial information and
transparency regarding executive compensation, for up to a
decade.
In 2012, the Jumpstart Our Business Startups Act (``JOBS
Act'') established a five-year exemption from the full
requirements of our federal securities laws to give newly-
public, emerging growth companies (``EGCs'') a temporary on-
ramp for transitioning to full reporting companies. Today, more
than 85% of companies go public as an EGC.
Compared to a company undertaking a traditional initial
public offering (``IPO''), an EGC may make use of the following
options:
reduced disclosure requirements in which the
EGC (1) may use two years of financial statements
certified by independent auditors, instead of three
years for a traditional IPO; and (2) is not required to
provide certain executive compensation disclosures;
an exemption from auditor attestations of
internal controls over financial reporting required by
Section 404(b) of the Sarbanes-Oxley Act; and
``test-the-waters'' communications that
allow the EGCs to meet with qualified institutional
buyers and institutional accredited investors to gauge
their interests in a potential offering during the
registration process, an activity prohibited during a
normal IPO.
H.R. 6130 would create a new category of issuer consisting
of companies that have surpassed the five-year exemption period
for EGCs. The bill would grant such companies, referred to as
``recent emerging growth companies,'' an additional five years
to make use of the reduced executive compensation and financial
statement disclosures available to EGCs. Such an extension
would reduce investors' ability to hold corporate boards and
executives accountable by, for example, allowing companies ten
years to avoid compliance with Dodd-Frank Act requirements like
shareholder say-on-pay and disclosures designed to better align
executive compensation with the long-term interests of
investors.
During a May 2018 Capital Markets Subcommittee hearing,
Professor John Coffee of Columbia Law School testified that
H.R. 6130 would encourage EGCs to continue to lobby for further
extensions, eventually resulting in a two-tier disclosure
system where EGCs are permanently exempt from the disclosure
requirements applicable to other public companies.
Additionally, as pointed out by Americans for Financial Reform
and Public Citizen in letters to the Committee opposing H.R.
6130, further reducing transparency surrounding newly public
companies could negatively impact capital formation by making
investment in such firms less attractive.
H.R. 6130 fails to consider the perspective of the
investor, without whom startups would be unable to raise the
capital necessary for growth. For these reasons, we oppose the
bill.
Maxine Waters.
Carolyn B. Maloney.
Wm. Lacy Clay.
Daniel T. Kildee.
Michael E. Capuano.
[all]