[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.

           *       *       *       *       *       *       *

                              ----------                              


         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]