SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Unlisted Trading Privileges Act of 
1994''.
SEC. 2. AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.
    (a) Unlisted Trading Privileges.--Section 12(f) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78l(f)) is amended by striking 
paragraphs (1) and (2) and inserting the following:
    ``(f)(1)(A) Notwithstanding the preceding subsections of this 
section, any national securities exchange, in accordance with the 
requirements of this subsection and the rules hereunder, may extend 
unlisted trading privileges to--
        ``(i) any security that is listed and registered on a national 
    securities exchange, subject to subparagraph (B); and
        ``(ii) any security that is otherwise registered pursuant to 
    this section, or that would be required to be so registered except 
    for the exemption from registration provided in subparagraph (B) or 
    (G) of subsection (g)(2), subject to subparagraph (E) of this 
    paragraph.
    ``(B) A national securities exchange may not extend unlisted 
trading privileges to a security described in subparagraph (A)(i) 
during such interval, if any, after the commencement of an initial 
public offering of such security, as is or may be required pursuant to 
subparagraph (C).
    ``(C) Not later than 180 days after the date of enactment of the 
Unlisted Trading Privileges Act of 1994, the Commission shall 
prescribe, by rule or regulation, the duration of the interval referred 
to in subparagraph (B), if any, as the Commission determines to be 
necessary or appropriate for the maintenance of fair and orderly 
markets, the protection of investors and the public interest, or 
otherwise in furtherance of the purposes of this title. Until the 
earlier of the effective date of such rule or regulation or 240 days 
after such date of enactment, such interval shall begin at the opening 
of trading on the day on which such security commences trading on the 
national securities exchange with which such security is registered and 
end at the conclusion of the next day of trading.
    ``(D) The Commission may prescribe, by rule or regulation such 
additional procedures or requirements for extending unlisted trading 
privileges to any security as the Commission deems necessary or 
appropriate for the maintenance of fair and orderly markets, the 
protection of investors and the public interest, or otherwise in 
furtherance of the purposes of this title.
    ``(E) No extension of unlisted trading privileges to securities 
described in subparagraph (A)(ii) may occur except pursuant to a rule, 
regulation, or order of the Commission approving such extension or 
extensions. In promulgating such rule or regulation or in issuing such 
order, the Commission--
        ``(i) shall find that such extension or extensions of unlisted 
    trading privileges is consistent with the maintenance of fair and 
    orderly markets, the protection of investors and the public 
    interest, and otherwise in furtherance of the purposes of this 
    title;
        ``(ii) shall take account of the public trading activity in 
    such securities, the character of such trading, the impact of such 
    extension on the existing markets for such securities, and the 
    desirability of removing impediments to and the progress that has 
    been made toward the development of a national market system; and
        ``(iii) shall not permit a national securities exchange to 
    extend unlisted trading privileges to such securities if any rule 
    of such national securities exchange would unreasonably impair the 
    ability of a dealer to solicit or effect transactions in such 
    securities for its own account, or would unreasonably restrict 
    competition among dealers in such securities or between such 
    dealers acting in the capacity of market makers who are specialists 
    and such dealers who are not specialists.
    ``(F) An exchange may continue to extend unlisted trading 
privileges in accordance with this paragraph only if the exchange and 
the subject security continue to satisfy the requirements for 
eligibility under this paragraph, including any rules and regulations 
issued by the Commission pursuant to this paragraph, except that 
unlisted trading privileges may continue with regard to securities 
which had been admitted on such exchange prior to July 1, 1964, 
notwithstanding the failure to satisfy such requirements. If unlisted 
trading privileges in a security are discontinued pursuant to this 
subparagraph, the exchange shall cease trading in that security, unless 
the exchange and the subject security thereafter satisfy the 
requirements of this paragraph and the rules issued hereunder.
    ``(G) For purposes of this paragraph--
        ``(i) a security is the subject of an initial public offering 
    if--
            ``(I) the offering of the subject security is registered 
        under the Securities Act of 1933; and
            ``(II) the issuer of the security, immediately prior to 
        filing the registration statement with respect to the offering, 
        was not subject to the reporting requirements of section 13 or 
        15(d) of this title; and
        ``(ii) an initial public offering of such security commences at 
    the opening of trading on the day on which such security commences 
    trading on the national securities exchange with which such 
    security is registered.
    ``(2)(A) At any time within 60 days of commencement of trading on 
an exchange of a security pursuant to unlisted trading privileges, the 
Commission may summarily suspend such unlisted trading privileges on 
the exchange. Such suspension shall not be reviewable under section 25 
of this title and shall not be deemed to be a final agency action for 
purposes of section 704 of title 5, United States Code. Upon such 
suspension--
        ``(i) the exchange shall cease trading in the security by the 
    close of business on the date of such suspension, or at such time 
    as the Commission may prescribe by rule or order for the 
    maintenance of fair and orderly markets, the protection of 
    investors and the public interest, or otherwise in furtherance of 
    the purposes of this title; and
        ``(ii) if the exchange seeks to extend unlisted trading 
    privileges to the security, the exchange shall file an application 
    to reinstate its ability to do so with the Commission pursuant to 
    such procedures as the Commission may prescribe by rule or order 
    for the maintenance of fair and orderly markets, the protection of 
    investors and the public interest, or otherwise in furtherance of 
    the purposes of this title.
    ``(B) A suspension under subparagraph (A) shall remain in effect 
until the Commission, by order, grants approval of an application to 
reinstate, as described in subparagraph (A)(ii).
    ``(C) A suspension under subparagraph (A) shall not affect the 
validity or force of an extension of unlisted trading privileges in 
effect prior to such suspension.
    ``(D) The Commission shall not approve an application by a national 
securities exchange to reinstate its ability to extend unlisted trading 
privileges to a security unless the Commission finds, after notice and 
opportunity for hearing, that the extension of unlisted trading 
privileges pursuant to such application is consistent with the 
maintenance of fair and orderly markets, the protection of investors 
and the public interest, and otherwise in furtherance of the purposes 
of this title. If the application is made to reinstate unlisted trading 
privileges to a security described in paragraph (1)(A)(ii), the 
Commission--
        ``(i) shall take account of the public trading activity in such 
    security, the character of such trading, the impact of such 
    extension on the existing markets for such a security, and the 
    desirability of removing impediments to and the progress that has 
    been made toward the development of a national market system; and
        ``(ii) shall not grant any such application if any rule of the 
    national securities exchange making application under this 
    subsection would unreasonably impair the ability of a dealer to 
    solicit or effect transactions in such security for its own 
    account, or would unreasonably restrict competition among dealers 
    in such security or between such dealers acting in the capacity of 
    marketmakers who are specialists and such dealers who are not 
    specialists.''.
    (b) Conforming Amendment.--Section 12(f)(3) of the Securities 
Exchange Act of 1934 (15 U.S.C. 78l(f)(3)) is amended by striking ``The 
Commission'' and inserting ``Notwithstanding paragraph (2), the 
Commission''.







                               Speaker of the House of Representatives.







                            Vice President of the United States and    
                                               President of the Senate.
Unlisted Trading Privileges Act of 1994 - Amends the Securities Exchange Act of 1934 to modify the guidelines under which a national securities exchange may extend unlisted trading privileges for corporate securities. 
Directs the Securities and Exchange Commission to prescribe, as necessary, the time period after commencement of an initial public offering during which a national securities exchange is prohibited from extending unlisted trading privileges. 
Subjects the extension of unlisted trading privileges by a national securities exchange to Commission rules and/or approval.  Provides for suspension and reinstatement of such privileges.
Unlisted Trading Privileges Act of 1994