H. Rept. 113-325 - 113th Congress (2013-2014)
January 14, 2014, As Reported by the Financial Services Committee

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House Report 113-325 - HOLDING COMPANY REGISTRATION THRESHOLD EQUALIZATION ACT OF 2013




[House Report 113-325]
[From the U.S. Government Publishing Office]


113th Congress                                                 Report
                    }    HOUSE OF REPRESENTATIVES    {
 2d Session         }                                {         113-325

======================================================================

 
    HOLDING COMPANY REGISTRATION THRESHOLD EQUALIZATION ACT OF 2013

                                _______
                                

January 14, 2014.--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

                        [To accompany H.R. 801]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 801) to amend the Securities Exchange Act of 
1934 to make the shareholder threshold for registration of 
savings and loan holding companies the same as for bank holding 
companies, having considered the same, report favorably thereon 
without amendment and recommend that the bill do pass.

                          Purpose and Summary

    H.R. 801, the Holding Company Registration Threshold 
Equalization Act of 2013, amends title VI of the Jumpstart Our 
Business Startups (JOBS) Act to: (i) raise the threshold for 
mandatory registration with the Securities and Exchange 
Commission (SEC) by savings and loan holding companies (SHLCs) 
from 500 shareholders of record to 2,000 shareholders of record 
(with no limitation on non-accredited investors); and (ii) 
raise the threshold for a SHLC to terminate its SEC 
registration from 300 shareholders of record to 1,200.\1\
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    \1\See Jumpstart Our Business Startups Act, Pub. L. No. 112-106, 
112 Stat. 306 (2012).
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                  Background and Need for Legislation

    The JOBS Act was a bipartisan piece of legislation designed 
to reduce barriers to capital formation for small businesses 
and startups.\2\ It was passed by the 112th Congress and signed 
into law by President Obama. The JOBS Act amended the 
thresholds described above in the ``Purpose and Summary'' 
section of this report for bank holding companies; it did not 
explicitly give the same treatment to savings and loan holding 
companies. This committee believes that omission to have been 
an oversight.
---------------------------------------------------------------------------
    \2\See generally H.R. Rep. No. 112-406.
---------------------------------------------------------------------------
    Bolstering the proposition that Congress did not intend to 
exclude SLHCs from the registration threshold changes made by 
the JOBS Act is the House Appropriations Committee's inclusion 
of report language in the fiscal year 2013 Financial Services 
and General Government Appropriations bill to clarify that 
Congress intended title IV of the JOBS Act to apply to SLHCs 
and to urge the SEC to use its existing authority to ensure 
this result.\3\ H.R. 801 clarifies that the JOBS Act was 
intended to cover SHLCs and so extends the registration 
thresholds to them accordingly.
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    \3\H.R. Rep. No. 113-172, at 71.
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                                Hearings

    The Committee on Financial Services did not hold a hearing 
on H.R. 801.

                        Committee Consideration

    The Committee on Financial Services met in open session on 
May 7, 2013, and ordered H.R. 801 to be reported favorably to 
the House by a 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. 
There were no recorded votes during consideration of H.R. 801.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee has held hearings and 
made findings that are reflected in 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. 801 
amends title VI of the Jumpstart Our Business Startups (JOBS) 
Act to: (i) raise the threshold for mandatory registration with 
the Securities and Exchange Commission (SEC) by savings and 
loan holding companies (SHLCs) from 500 shareholders of record 
to 2,000 shareholders of record (with no limitation on non-
accredited investors); and (ii) raise the threshold for a SHLC 
to terminate its SEC registration from 300 shareholders of 
record to 1,200.

   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.

                        Committee Cost Estimate

    The Committee adopts as its own 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, May 29, 2013.
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. 801, the Holding 
Company Registration Threshold Equalization Act of 2013.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susan Willie.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 801--Holding Company Registration Threshold Equalization Act of 
        2013

    H.R. 801 would change several thresholds for savings and 
loan holding companies that determine whether such entities 
must take action with the Securities and Exchange Commission 
(SEC). Specifically, the bill would change the number of 
shareholders of record (shareholders whose names are registered 
on the books of a savings and loan holding company as owning 
shares of the entity at a particular time) that must be in 
place for the SEC to:
          
 Require that a security of the holding 
        company be registered;
          
 Suspend the registration of a security 
        issued by a holding company; and
          
 Suspend certain reporting requirements for a 
        holding company.
    Based on information from the SEC, CBO expects that 
implementing H.R. 801 would not have a significant effect on 
the workload of the agency, and as a result, CBO estimates that 
implementing H.R. 801 would not significantly affect 
discretionary spending. Further, under current law, the SEC is 
authorized to collect fees sufficient to offset its 
appropriation each year; therefore, we estimate that the net 
cost to the SEC would be negligible, assuming appropriation 
actions consistent with that authority. Enacting H.R. 801 would 
not affect direct spending or revenues; therefore, pay-as-you-
go procedures do not apply.
    H.R. 801 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Susan Willie. 
The estimate was approved by Theresa Gullo, Deputy Assistant 
Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates reform 
Act.

                      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

    H.R. 801 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of rule XXI.

                    Duplication of Federal Programs

    Pursuant to section 3(j) of H. Res. 5, 113th Cong. (2013), 
the Committee states that no provision of H.R. 801 establishes 
or reauthorizes a program of the Federal Government known to be 
duplicative of another Federal program, a program that was 
included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-
139, or a program related to a program identified in the most 
recent Catalog of Federal Domestic Assistance.

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(k) of H. Res. 5, 113th Cong. (2013), 
the Committee states that H.R. 801 contains no directed 
rulemaking.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section provides that H.R. 801 may be referred to as 
the ``Holding Company Registration Threshold Equalization Act 
of 2013.''

Section 2. Registration threshold for savings and loan holding 
        companies

    This section amends the amendments made to the Securities 
Exchange Act of 1934 by title VI of the Jumpstart Our Business 
Startups (JOBS) Act to: (i) raise the threshold for mandatory 
registration with the Securities and Exchange Commission (SEC) 
by savings and loan holding companies (SHLCs) from 500 
shareholders of record to 2,000 shareholders of record (with no 
limitation on non-accredited investors); and (ii) raise the 
threshold for a SHLC to terminate its SEC registration from 300 
shareholders of record to 1,200.

         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, existing law in which no change is 
proposed is shown in roman):

                    SECURITIES EXCHANGE ACT OF 1934


TITLE I--REGULATION OF SECURITIES EXCHANGES

           *       *       *       *       *       *       *



                REGISTRATION REQUIREMENTS FOR SECURITIES

  Sec. 12. (a) * * *

           *       *       *       *       *       *       *

  (g)(1) Every issuer which is engaged in interstate commerce, 
or in a business affecting interstate commerce, or whose 
securities are traded by use of the mails or any means or 
instrumentality of interstate commerce shall--
          (A) * * *
          (B) in the case of an issuer that is a bank, a 
        savings and loan holding company (as defined in section 
        10 of the Home Owners' Loan Act), or a bank holding 
        company, as such term is defined in section 2 of the 
        Bank Holding Company Act of 1956 (12 U.S.C. 1841), not 
        later than 120 days after the last day of its first 
        fiscal year ended after the effective date of this 
        subsection, on which the issuer has total assets 
        exceeding $10,000,000 and a class of equity security 
        (other than an exempted security) held of record by 
        2,000 or more persons,

           *       *       *       *       *       *       *

  (4) Registration of any class of security pursuant to this 
subsection shall be terminated ninety days, or such shorter 
period as the Commission may determine, after the issuer files 
a certification with the Commission that the number of holders 
of record of such class of security is reduced to less than 300 
persons, or, in the case of a bank, a savings and loan holding 
company (as defined in section 10 of the Home Owners' Loan 
Act), or a bank holding company, as such term is defined in 
section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 
1841), 1,200 persons persons. The Commission shall after notice 
and opportunity for hearing deny termination of registration if 
it finds that the certification is untrue. Termination of 
registration shall be deferred pending final determination on 
the question of denial.

           *       *       *       *       *       *       *


           REGISTRATION AND REGULATION OF BROKERS AND DEALERS

  Sec. 15. (a) * * *

           *       *       *       *       *       *       *

  (d) Supplementary and Periodic Information.--
          (1) In general.--Each issuer which has filed a 
        registration statement containing an undertaking which 
        is or becomes operative under this subsection as in 
        effect prior to the date of enactment of the Securities 
        Acts Amendments of 1964, and each issuer which shall 
        after such date file a registration statement which has 
        become effective pursuant to the Securities Act of 
        1933, as amended, shall file 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, 
        such supplementary and periodic information, documents, 
        and reports as may be required pursuant to section 13 
        of this title in respect of a security registered 
        pursuant to section 12 of this title. The duty to file 
        under this subsection shall be automatically suspended 
        if and so long as any issue of securities of such 
        issuer is registered pursuant to section 12 of this 
        title. The duty to file under this subsection shall 
        also be automatically suspended as to any fiscal year, 
        other than the fiscal year within which such 
        registration statement became effective, if, at the 
        beginning of such fiscal year, the securities of each 
        class, other than any class of asset-backed securities, 
        to which the registration statement relates are held of 
        record by less than 300 persons, or, in the [case of 
        bank] case of a bank, a savings and loan holding 
        company (as defined in section 10 of the Home Owners' 
        Loan Act), or a bank holding company, as such term is 
        defined in section 2 of the Bank Holding Company Act of 
        1956 (12 U.S.C. 1841), 1,200 persons persons. For the 
        purposes of this subsection, the term ``class'' shall 
        be construed to include all securities of an issuer 
        which are of substantially similar character and the 
        holders of which enjoy substantially similar rights and 
        privileges. The Commission may, for the purpose of this 
        subsection, define by rules and regulations the term 
        ``held of record'' as it deems necessary or appropriate 
        in the public interest or for the protection of 
        investors in order to prevent circumvention of the 
        provisions of this subsection. Nothing in this 
        subsection shall apply to securities issued by a 
        foreign government or political subdivision thereof.

           *       *       *       *       *       *       *