Summary: S.422 — 103rd Congress (1993-1994)All Information (Except Text)

Bill summaries are authored by CRS.

Shown Here:
Senate agreed to House amendment with amendment (11/22/1993)


Title I: Amendments to the Securities Exchange Act of 1934

Title II: Reports on Public Debt

Title III: Limited Partnership Rollups

Government Securities Act Amendments of 1993 - Title I: Amendments to the Securities Exchange Act of 1934 - Amends the Securities Exchange Act of 1934 to repeal the termination date for the rulemaking authority of the Secretary of the Treasury (the Secretary) with respect to government securities (thus making such authority permanent).

(Sec. 103) Mandates that every government securities broker and dealer furnish, upon request of the Securities and Exchange Commission (SEC), all records of government securities transactions required to reconstruct trading in the course of a particular inquiry or investigation for enforcement or surveillance purposes. Prohibits the SEC from using this Act to develop regular reporting requirements.

(Sec. 104) Authorizes the Secretary to prescribe reporting and recordkeeping requirements for persons who hold or control large positions in to-be-issued or recently-issued Treasury securities. Authorizes the Secretary to grant exemptions from such requirements.

(Sec. 105) Extends to all government securities brokers and dealers and to all government securities transactions the SEC's current authority to prescribe rules to prevent fraudulent and manipulative acts and practices. States that if the Secretary notifies the SEC or other appropriate regulatory agency that a proposed rule or regulation would adversely affect the liquidity or efficiency of the market for government securities, then the agency must find, prior to adopting such rule, that it is necessary notwithstanding the Secretary's determination.

(Sec. 106) Authorizes the appropriate regulatory agency to promulgate rules designed to prevent fraud or manipulation in government securities transactions. Removes all current limitations on the ability of a registered securities association to regulate member transactions in exempted securities other than municipal securities.

(Sec. 107) Includes within the SEC's annual status report to the Congress the progress made in promoting the timely public dissemination and availability of specified information on government securities transactions and quotations (market transparencies).

(Sec. 108) Requires government securities dealers and brokers who are not members of the Securities Investors Protection Corporation (SIPC) to comply with SEC disclosure requirements regarding the inapplicability of SIPC coverage to their customers' accounts.

(Sec. 110) Prohibits false or misleading statements or omissions of fact by persons engaging in government securities transactions.

(Sec. 112) Mandates certain studies and reports to the Congress on specified aspects of government securities regulation, to be submitted by: (1) the Secretary, the SEC, and the Board of Governors of the Federal Reserve System acting jointly; and (2) the Comptroller General.

Title II: Reports on Public Debt - Amends Federal law to direct the Secretary to submit to certain congressional committees an annual public debt report on: (1) the Treasury's public debt activities; and (2) the operation of the Federal Financing Bank.

(Sec. 202) Prescribes guidelines under which, by the end of 1995, a bidder may be permitted to submit a computer-generated tender to a Federal automated auction system if the bidder meets minimum Federal creditworthiness standards and agrees to comply with the system's rules and procedures.

Proscribes, with specified exceptions, the granting of any benefit upon a government securities dealer or broker in connection with the purchase upon issuance of Treasury securities if that benefit is not generally available to other such brokers or dealers.

Mandates that meetings and minutes of the Treasury Borrowing Advisory Committee of the Public Securities Association (advisory committee) be open to the public.

Prohibits: (1) the acceptance of any item of value from an advisory committee member by an officer or staffer of the Department of the Treasury, the Board of Governors of the Federal Reserve System, or any Federal reserve bank; and (2) any discussions with outsiders by advisory committee members regarding the contents of meetings closed to the public.

Mandates the permanent bar and/or removal of violators of such proscriptions from advisory committee membership. Precludes from advisory committee membership for a five-year period any staffer of a firm of which such violator is a member.

Directs the Secretary to report annually to the Congress specified information about material violations of regulations relating to Federal securities auctions and offerings.

Title III: Limited Partnership Rollups - Limited Partnership Rollup Reform Act of 1993 - Amends the Securities Exchange Act of 1934 to revise proxy solicitation rules with respect to limited partnership rollup transactions (in which general partners combine several limited partnerships into one unit that trades on a stock exchange, or a single limited partnership is reorganized so that some or all of the investors receive new securities or securities in another entity).

(Sec. 302) Requires the Securities and Exchange Commission (SEC) to prescribe proxy rules to: (1) permit dissenting shareholders in a proposed rollup to contact, without filing soliciting material with the SEC, other limited partners before the transaction date in order to determine whether to solicit proxies, consents, or authorizations in opposition to the proposed transactions; (2) require the issuer to provide a shareholder (limited partner) with a list of all limited and general partners involved in the proposed rollup; (3) prohibit the direct or indirect payment of any person providing solicitation services on the basis of whether the solicited proxies, consents, or authorizations either approved or disapprove the proposed transaction, or the transaction is approved or completed; (4) require the rollup soliciting material to be clear, concise, and understandable and summarize all effects of the proposed transaction, its risks, conflicts of interest, changes in voting rights and ownership interests, dissenters' rights, and any report received by the general partner that is prepared by an outside party and is materially related to the rollup tranaction; and (5) give each shareholder at least 60 days to review the soliciting material. Authorizes the SEC to grant exemptions from these requirements.

Directs the Comptroller General to evaluate and report to the Congress on specified aspects of the use of fairness opinions in limited partnership rollup transactions.

Excludes transactions involving certain kinds of limited partnerships from the meaning of limited partnership rollup tranaction.

(Sec. 303) Requires the rules of a national securities association to prevent association members from participating in any rollup transaction unless it protects specified rights of dissenting limited partners. Requires a national securities exchange to prohibit the listing of any security resulting from a rollup transaction, and the rules of a national securities association to prohibit the authorization for quotation on an association-sponsored automated interdealer quotation system of any security the SEC designates as a national market system security resulting from a rollup transaction, unless such dissenters' rights were provided for.

Provides that prior to the effective date of the regulations adopted pursuant to this Act, the SEC shall continue to review and declare effective registration statements and attendant amendments relating to limited partnership rollup transactions in accordance with the applicable regulations then in effect.