[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2068 Introduced in Senate (IS)]
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118th CONGRESS
1st Session
S. 2068
To amend the Securities Exchange Act of 1934 to allow for the
registration of venture exchanges, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 21, 2023
Mr. Kennedy introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
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) Definitions.--In 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 not
more than 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 any successor
regulation.
``(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 the issuer exceeding the
threshold specified in clause (i)(II) until the
later of--
``(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); and
``(II) the end of the 1-year period
following the end of the 24-month
period described in subclause (I), if
the issuer requests the 1-year
extension from a venture exchange and
the venture exchange elects to provide
that 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) a security of an early-stage,
growth company that is exempt from
registration pursuant to section 3(b)
of the Securities Act of 1933 (15
U.S.C. 77c(b));
``(II) a security of an emerging
growth company; or
``(III) a security 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 the
security has a public float
that is not more than 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 any successor
regulation; or
``(bb) the average daily
trade volume is not more than
75,000 shares during a
continuous 60-day period.
``(ii) Treatment when public float exceeds
threshold.--A security shall not cease to be a
venture security by reason of the public float
of the issuer of the security exceeding the
threshold specified in clause (i)(III)(aa)
until the later of--
``(I) the end of the period of 24
consecutive months beginning on the
date on which--
``(aa) the public float of
the issuer exceeds
$2,000,000,000; and
``(bb) the average daily
trade volume of the security is
not less than 100,000 shares
during a continuous 60-day
period; and
``(II) the end of the 1-year period
following the end of the 24-month
period described in subclause (I), if
the issuer of the security requests the
1-year extension from a venture
exchange and the venture exchange
elects to provide that extension.
``(2) Registration.--
``(A) In general.--A person may register (and a
national securities exchange may register a listing
tier of the exchange) as a national securities exchange
solely for the purpose 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 the filing and afford interested
persons an opportunity to submit written data, views,
and arguments concerning the application.
``(C) Approval or denial.--
``(i) In general.--Not later than 90 days
after the date on which a notice is published
under subparagraph (B), or within such longer
period as to which the applicant consents, the
Commission shall--
``(I) by order grant the
registration; or
``(II) institute a denial
proceeding under clause (ii) to
determine whether registration should
be denied.
``(ii) Denial proceeding.--
``(I) In general.--A proceeding
under clause (i)(II) shall--
``(aa) include notice of
the grounds for denial under
consideration and opportunity
for hearing; and
``(bb) be concluded not
later than 180 days after the
date on which the notice is
published under subparagraph
(B).
``(II) Order.--At the conclusion of
a proceeding under clause (i)(II), the
Commission shall by order grant or deny
the registration.
``(III) Extension.--The Commission
may extend the time for conclusion of a
proceeding under clause (i)(II) for a
period of not more than 90 days if the
Commission--
``(aa) finds good cause for
the extension; and
``(bb) publishes the
reasons for the finding
described in item (aa) or for
such longer period as to which
the applicant consents.
``(iii) Criteria for approval or denial.--
The Commission shall--
``(I) grant a registration under
this paragraph if the Commission finds
that the requirements of this Act and
the rules and regulations thereunder
with respect to the applicant are
satisfied; and
``(II) deny a registration under
this paragraph if the Commission does
not make the finding described in
subclause (I).
``(3) 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
marketplace 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.
``(4) Treatment of certain exempted securities.--A security
that is exempt from registration pursuant to section 3(b) of
the Securities Act of 1933 (15 U.S.C. 77c(b)) shall be exempt
from section 12(a) of this Act to the extent the security is
traded on a venture exchange, if the issuer of the 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, as described in
sections 230.251 through 230.263 of title 17, Code of
Federal Regulations, or any successor regulations.
``(5) 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.
``(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) Rule of construction.--Nothing in this subsection may
be construed as requiring transactions in venture securities to
be effected on a national securities exchange.''.
(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 in section
6(m) of the Securities Exchange Act of 1934 (15 U.S.C. 78f(m)).''.
(c) Sense of Congress.--It is the sense of 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 general exemptive authority of the Commission under section
36 of the Securities Exchange Act of 1934 (15 U.S.C. 78mm) with
respect to the provisions added by the amendments made by this
section; and
(2) if the Commission determines appropriate, create an
Office of Venture Exchanges within the Division of Trading and
Markets of the Commission.
(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 anti-fraud 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 pursuant to section 6 of the Securities
Exchange Act of 1934 (15 U.S.C. 78f) on the date of enactment of this
Act, any election for a listing tier of that exchange to be treated as
a venture exchange under subsection (m) of such section, as added by
subsection (a) of this section, shall not take effect before the date
that is 180 days after such date of enactment.
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