[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4535 Engrossed in House (EH)]
103d CONGRESS
2d Session
H. R. 4535
_______________________________________________________________________
AN ACT
To amend the Securities Exchange Act of 1934 with respect to the
extension of unlisted trading privileges for corporate securities, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Unlisted Trading Privileges Act of
1994''.
SEC. 2. AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.
(a) Unlisted Trading Privileges.--Section 12(f) of the Securities
Exchange Act of 1934 (15 U.S.C. 78l(f)) is amended by striking
paragraphs (1) and (2) and inserting the following:
``(f)(1)(A) Notwithstanding the preceding subsections of this
section, any national securities exchange, in accordance with the
requirements of this subsection and the rules hereunder, may extend
unlisted trading privileges to--
``(i) any security that is listed and registered on a
national securities exchange, subject to subparagraph (B); and
``(ii) any security that is otherwise registered pursuant
to this section, or that would be required to be so registered
except for the exemption from registration provided in
subparagraph (B) or (G) of subsection (g)(2), subject to
subparagraph (E) of this paragraph.
``(B) A national securities exchange may not extend unlisted
trading privileges to a security described in subparagraph (A)(i)
during such interval, if any, after the commencement of an initial
public offering of such security, as is or may be required pursuant to
subparagraph (C).
``(C) Not later than 180 days after the date of enactment of the
Unlisted Trading Privileges Act of 1994, the Commission shall
prescribe, by rule or regulation, the duration of the interval referred
to in subparagraph (B), if any, as the Commission determines to be
necessary or appropriate for the maintenance of fair and orderly
markets, the protection of investors and the public interest, or
otherwise in furtherance of the purposes of this title. Until the
earlier of the effective date of such rule or regulation or 240 days
after such date of enactment, such interval shall begin at the opening
of trading on the day on which such security commences trading on the
national securities exchange with which such security is registered and
end at the conclusion of the next day of trading.
``(D) The Commission may prescribe, by rule or regulation such
additional procedures or requirements for extending unlisted trading
privileges to any security as the Commission deems necessary or
appropriate for the maintenance of fair and orderly markets, the
protection of investors and the public interest, or otherwise in
furtherance of the purposes of this title.
``(E) No extension of unlisted trading privileges to securities
described in subparagraph (A)(ii) may occur except pursuant to a rule,
regulation, or order of the Commission approving such extension or
extensions. In promulgating such rule or regulation or in issuing such
order, the Commission--
``(i) shall find that such extension or extensions of
unlisted trading privileges is consistent with the maintenance
of fair and orderly markets, the protection of investors and
the public interest, and otherwise in furtherance of the
purposes of this title;
``(ii) shall take account of the public trading activity in
such securities, the character of such trading, the impact of
such extension on the existing markets for such securities, and
the desirability of removing impediments to and the progress
that has been made toward the development of a national market
system; and
``(iii) shall not permit a national securities exchange to
extend unlisted trading privileges to such securities if any
rule of such national securities exchange would unreasonably
impair the ability of a dealer to solicit or effect
transactions in such securities for its own account, or would
unreasonably restrict competition among dealers in such
securities or between such dealers acting in the capacity of
market makers who are specialists and such dealers who are not
specialists.
``(F) An exchange may continue to extend unlisted trading
privileges in accordance with this paragraph only if the exchange and
the subject security continue to satisfy the requirements for
eligibility under this paragraph, including any rules and regulations
issued by the Commission pursuant to this paragraph, except that
unlisted trading privileges may continue with regard to securities
which had been admitted on such exchange prior to July 1, 1964,
notwithstanding the failure to satisfy such requirements. If unlisted
trading privileges in a security are discontinued pursuant to this
subparagraph, the exchange shall cease trading in that security, unless
the exchange and the subject security thereafter satisfy the
requirements of this paragraph and the rules issued hereunder.
``(G) For purposes of this paragraph--
``(i) a security is the subject of an initial public
offering if--
``(I) the offering of the subject security is
registered under the Securities Act of 1933; and
``(II) the issuer of the security, immediately
prior to filing the registration statement with respect
to the offering, was not subject to the reporting
requirements of section 13 or 15(d) of this title; and
``(ii) an initial public offering of such security
commences at the opening of trading on the day on which such
security commences trading on the national securities exchange
with which such security is registered.
``(2)(A) At any time within 60 days of commencement of trading on
an exchange of a security pursuant to unlisted trading privileges, the
Commission may summarily suspend such unlisted trading privileges on
the exchange. Such suspension shall not be reviewable under section 25
of this title and shall not be deemed to be a final agency action for
purposes of section 704 of title 5, United States Code. Upon such
suspension--
``(i) the exchange shall cease trading in the security by
the close of business on the date of such suspension, or at
such time as the Commission may prescribe by rule or order for
the maintenance of fair and orderly markets, the protection of
investors and the public interest, or otherwise in furtherance
of the purposes of this title; and
``(ii) if the exchange seeks to extend unlisted trading
privileges to the security, the exchange shall file an
application to reinstate its ability to do so with the
Commission pursuant to such procedures as the Commission may
prescribe by rule or order for the maintenance of fair and
orderly markets, the protection of investors and the public
interest, or otherwise in furtherance of the purposes of this
title.
``(B) A suspension under subparagraph (A) shall remain in effect
until the Commission, by order, grants approval of an application to
reinstate, as described in subparagraph (A)(ii).
``(C) A suspension under subparagraph (A) shall not affect the
validity or force of an extension of unlisted trading privileges in
effect prior to such suspension.
``(D) The Commission shall not approve an application by a national
securities exchange to reinstate its ability to extend unlisted trading
privileges to a security unless the Commission finds, after notice and
opportunity for hearing, that the extension of unlisted trading
privileges pursuant to such application is consistent with the
maintenance of fair and orderly markets, the protection of investors
and the public interest, and otherwise in furtherance of the purposes
of this title. If the application is made to reinstate unlisted trading
privileges to a security described in paragraph (1)(A)(ii), the
Commission--
``(i) shall take account of the public trading activity in
such security, the character of such trading, the impact of
such extension on the existing markets for such a security, and
the desirability of removing impediments to and the progress
that has been made toward the development of a national market
system; and
``(ii) shall not grant any such application if any rule of
the national securities exchange making application under this
subsection would unreasonably impair the ability of a dealer to
solicit or effect transactions in such security for its own
account, or would unreasonably restrict competition among
dealers in such security or between such dealers acting in the
capacity of marketmakers who are specialists and such dealers
who are not specialists.''.
(b) Conforming Amendment.--Section 12(f)(3) of the Securities
Exchange Act of 1934 (15 U.S.C. 78l(f)(3)) is amended by striking ``The
Commission'' and inserting ``Notwithstanding paragraph (2), the
Commission''.
Passed the House of Representatives August 1, 1994.
Attest:
Clerk.
103d CONGRESS
2d Session
H. R. 4535
_______________________________________________________________________
AN ACT
To amend the Securities Exchange Act of 1934 with respect to the
extension of unlisted trading privileges for corporate securities, and
for other purposes.