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113th Congress Report
} HOUSE OF REPRESENTATIVES {
2d Session } { 113-325
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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.
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\2\See generally H.R. Rep. No. 112-406.
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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.
* * * * * * *