[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6623 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 6623
To amend the Securities Exchange Act of 1934 to allow for the
registration of venture exchanges, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 6, 2023
Mr. Emmer (for himself, Mr. Donalds, and Mr. Fitzgerald) introduced the
following bill; which was referred to the Committee on Financial
Services
_______________________________________________________________________
A BILL
To amend the Securities Exchange Act of 1934 to allow for the
registration of venture exchanges, 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 ``Main Street Growth Act''.
SEC. 2. VENTURE EXCHANGES.
(a) Securities Exchange Act of 1934.--Section 6 of the Securities
Exchange Act of 1934 (15 U.S.C. 78f) is amended by adding at the end
the following:
``(m) Venture Exchange.--
``(1) Registration.--
``(A) In general.--A person may register themself
(and a national securities exchange may register a
listing tier of such exchange) as a national securities
exchange solely for the purposes of trading venture
securities by filing an application with the Commission
pursuant to subsection (a) and the rules and
regulations thereunder.
``(B) Publication of notice.--The Commission shall,
upon the filing of an application under subparagraph
(A), publish notice of such filing and afford
interested persons an opportunity to submit written
data, views, and arguments concerning such application.
``(C) Approval or denial.--
``(i) In general.--Within 90 days of the
date of publication of a notice under
subparagraph (B) (or within such longer period
as to which the applicant consents), the
Commission shall--
``(I) by order grant such
registration; or
``(II) institute a denial
proceeding under clause (ii) to
determine whether registration should
be denied.
``(ii) Denial proceeding.--A proceeding
under clause (i)(II) shall include notice of
the grounds for denial under consideration and
opportunity for hearing and shall be concluded
within 180 days of the date of the publication
of a notice under subparagraph (B). At the
conclusion of such proceeding the Commission,
by order, shall grant or deny such
registration. The Commission may extend the
time for conclusion of such proceeding for up
to 90 days if the Commission finds good cause
for such extension and publishes the
Commission's reasons for so finding or for such
longer period as to which the applicant
consents.
``(iii) Criteria for approval or denial.--
The Commission shall grant a registration under
this paragraph if the Commission finds that the
requirements of this title and the rules and
regulations thereunder with respect to the
applicant are satisfied. The Commission shall
deny such registration if it does not make such
finding.
``(2) Powers and restrictions.--In addition to the powers
and restrictions otherwise applicable to a national securities
exchange, a venture exchange--
``(A) may only constitute, maintain, or provide a
market place or facilities for bringing together
purchasers and sellers of venture securities;
``(B) may not extend unlisted trading privileges to
any venture security;
``(C) may only, if the venture exchange is a
listing tier of another national securities exchange,
allow trading in securities that are registered under
section 12(b) on a national securities exchange other
than a venture exchange; and
``(D) may, subject to the rule filing process under
section 19(b)--
``(i) determine the increment to be used
for quoting and trading venture securities on
the exchange; and
``(ii) choose to carry out periodic
auctions for the sale of a venture security
instead of providing continuous trading of the
venture security.
``(3) Treatment of certain exempted securities.--A security
that is exempt from registration pursuant to section 3(b) of
the Securities Act of 1933 shall be exempt from section 12(a)
of this title to the extent such securities are traded on a
venture exchange, if the issuer of such security is in
compliance with--
``(A) all disclosure obligations of such section
3(b) and the regulations issued under such section; and
``(B) ongoing disclosure obligations of the
applicable venture exchange that are similar to those
provided by an issuer under tier 2 of Regulation A (17
CFR 230.251 et seq.).
``(4) Venture securities traded on venture exchanges may
not trade on non-venture exchanges.--A venture security may not
be traded on a national securities exchange that is not a
venture exchange during any period in which the venture
security is being traded on a venture exchange.
``(5) Rule of construction.--Nothing in this subsection may
be construed as requiring transactions in venture securities to
be effected on a national securities exchange.
``(6) Commission authority to limit certain trading.--The
Commission may limit transactions in venture securities that
are not effected on a national securities exchange as
appropriate to promote efficiency, competition, capital
formation, and to protect investors.
``(7) Disclosures to investors.--The Commission shall issue
regulations to ensure that persons selling or purchasing
venture securities on a venture exchange are provided
disclosures sufficient to understand--
``(A) the characteristics unique to venture
securities; and
``(B) in the case of a venture exchange that is a
listing tier of another national securities exchange,
that the venture exchange is distinct from the other
national securities exchange.
``(8) Definitions.--For purposes of this subsection:
``(A) Early-stage, growth company.--
``(i) In general.--The term `early-stage,
growth company' means an issuer--
``(I) that has not made any
registered initial public offering of
any securities of the issuer; and
``(II) with a public float of less
than or equal to the value of public
float required to qualify as a large
accelerated filer under section
240.12b-2 of title 17, Code of Federal
Regulations.
``(ii) Treatment when public float exceeds
threshold.--An issuer shall not cease to be an
early-stage, growth company by reason of the
public float of such issuer exceeding the
threshold specified in clause (i)(II) until the
later of the following:
``(I) The end of the period of 24
consecutive months during which the
public float of the issuer exceeds
$2,000,000,000 (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).
``(II) The end of the 1-year period
following the end of the 24-month
period described under subclause (I),
if the issuer requests such 1-year
extension from a venture exchange and
the venture exchange elects to provide
such extension.
``(B) Public float.--With respect to an issuer, the
term `public float' means the aggregate worldwide
market value of the voting and non-voting common equity
of the issuer held by non-affiliates.
``(C) Venture security.--
``(i) In general.--The term `venture
security' means--
``(I) securities of an early-stage,
growth company that are exempt from
registration pursuant to section 3(b)
of the Securities Act of 1933;
``(II) securities of an emerging
growth company; or
``(III) securities registered under
section 12(b) and listed on a venture
exchange (or, prior to listing on a
venture exchange, listed on a national
securities exchange) where--
``(aa) the issuer of such
securities has a public float
less than or equal to the value
of public float required to
qualify as a large accelerated
filer under section 240.12b-2
of title 17, Code of Federal
Regulations; or
``(bb) the average daily
trade volume is 75,000 shares
or less during a continuous 60-
day period.
``(ii) Treatment when public float exceeds
threshold.--Securities shall not cease to be
venture securities by reason of the public
float of the issuer of such securities
exceeding the threshold specified in clause
(i)(III)(aa) until the later of the following:
``(I) The end of the period of 24
consecutive months beginning on the
date--
``(aa) the public float of
such issuer exceeds
$2,000,000,000; and
``(bb) the average daily
trade volume of such securities
is 100,000 shares or more
during a continuous 60-day
period.
``(II) The end of the 1-year period
following the end of the 24-month
period described under subclause (I),
if the issuer of such securities
requests such 1-year extension from a
venture exchange and the venture
exchange elects to provide such
extension.''.
(b) Securities Act of 1933.--Section 18 of the Securities Act of
1933 (15 U.S.C. 77r) is amended--
(1) by redesignating subsection (d) as subsection (e); and
(2) by inserting after subsection (c) the following:
``(d) Treatment of Securities Listed on a Venture Exchange.--
Notwithstanding subsection (b), a security is not a covered security
pursuant to subsection (b)(1)(A) if the security is only listed, or
authorized for listing, on a venture exchange (as defined under section
6(m) of the Securities Exchange Act of 1934).''.
(c) Sense of Congress.--It is the sense of the Congress that the
Securities and Exchange Commission should--
(1) when necessary or appropriate in the public interest
and consistent with the protection of investors, make use of
the Commission's general exemptive authority under section 36
of the Securities Exchange Act of 1934 (15 U.S.C. 78mm) with
respect to the provisions added by this section; and
(2) if the Commission determines appropriate, create an
Office of Venture Exchanges within the Commission's Division of
Trading and Markets.
(d) Rule of Construction.--Nothing in this section or the
amendments made by this section shall be construed to impair or limit
the construction of the antifraud provisions of the securities laws (as
defined in section 3(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a))) or the authority of the Securities and Exchange
Commission under those provisions.
(e) Effective Date for Tiers of Existing National Securities
Exchanges.--In the case of a securities exchange that is registered as
a national securities exchange under section 6 of the Securities
Exchange Act of 1934 (15 U.S.C. 78f) on the date of the enactment of
this Act, any election for a listing tier of such exchange to be
treated as a venture exchange under subsection (m) of such section
shall not take effect before the date that is 180 days after such date
of enactment.
<all>