I 

114TH CONGRESS 

2D SESSION H. R. 4638 

To amend the Securities Exchange Act of 1934 to allow for the creation 

of venture exchanges to promote liquidity of venture securities, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 26, 2016 

Mr. GARRETT (for himself and Mr. CHABOT) introduced the following bill; 

which was referred to the Committee on Financial Services 

A BILL 

To amend the Securities Exchange Act of 1934 to allow 

for the creation of venture exchanges to promote liquidity 

of venture securities, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Main Street Growth 

5 Act’’. 

6 SEC. 2. VENTURE EXCHANGES. 

7 (a) SECURITIES EXCHANGE ACT OF 1934.—Section 

8 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f) 

9 is amended by adding at the end the following: 


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1 ‘‘(m) VENTURE EXCHANGE.— 

2 ‘‘(1) REGISTRATION.— 

3 ‘‘(A) IN GENERAL.—A national securities 

4 exchange may elect to be treated (or for a list5 ing tier of such exchange to be treated) as a 

6 venture exchange by notifying the Commission 

7 of such election, either at the time the exchange 

8 applies to be registered as a national securities 

9 exchange or after registering as a national secu10 rities exchange. 

11 ‘‘(B) DETERMINATION TIME PERIOD.— 

12 With respect to a securities exchange electing to 

13 be treated (or for a listing tier of such exchange 

14 to be treated) as a venture exchange at the time 

15 the exchange applies to be registered as a na16 tional securities exchange, such application 

17 shall be deemed to have been approved by the 

18 Commission unless the Commission denies such 

19 application before the end of the 6-month pe20 riod beginning on the date the Commission re21 ceived such application. 

22 ‘‘(2) POWERS AND RESTRICTIONS.—A venture 

23 exchange— 

24 ‘‘(A) may only constitute, maintain, or pro25 vide a market place or facilities for bringing toVerDate Sep 11 2014 03:49 Feb 27, 2016 Jkt 059200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4638.IH H4638

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1 gether purchasers and sellers of venture securi2 ties; 

3 ‘‘(B) may determine the increment to be 

4 used for quoting and trading venture securities 

5 on the exchange; 

6 ‘‘(C) shall disseminate last sale and 

7 quotation information on terms that are fair 

8 and reasonable and not unreasonably discrimi9 natory; 

10 ‘‘(D) may choose to carry out periodic auc11 tions for the sale of a venture security instead 

12 of providing continuous trading of the venture 

13 security; and 

14 ‘‘(E) may not extend unlisted trading 

15 privileges to any venture security. 

16 ‘‘(3) EXEMPTIONS FROM CERTAIN NATIONAL

17 SECURITY EXCHANGE REGULATIONS.—A venture ex18 change shall not be required to— 

19 ‘‘(A) comply with Rule NMS (sections 

20 242.600 through 242.612 of title 17, Code of 

21 Federal Regulations); 

22 ‘‘(B) comply with Rule ATS (sections 

23 242.300 through 242.303 of title 17, Code of 

24 Federal Regulations); 


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1 ‘‘(C) submit any data to a securities infor2 mation processor; or 

3 ‘‘(D) use decimal pricing. 

4 ‘‘(4) DEFINITIONS.—For purposes of this sub5 section: 

6 ‘‘(A) EARLY-STAGE, GROWTH COMPANY.— 

7 ‘‘(i) IN GENERAL.—The term ‘early8 stage, growth company’ means an issuer— 

9 ‘‘(I) that has not made an initial 

10 public offering of any securities of the 

11 issuer; and 

12 ‘‘(II) with a market capitalization 

13 of $1,000,000,000 or less. 

14 ‘‘(ii) TREATMENT WHEN MARKET

15 CAPITALIZATION EXCEEDS THRESHOLD.— 

16 In the case of an issuer that is an early17 stage, growth company the securities of 

18 which are traded on a venture exchange, 

19 such issuer shall not cease to be an early20 stage, growth company by reason of the 

21 market capitalization of such issuer ex22 ceeding the threshold specified in clause 

23 (i)(II) until the end of the period of 12 

24 consecutive months during which the marVerDate Sep 11 2014 03:49 Feb 27, 2016 Jkt 059200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4638.IH H4638

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1 ket capitalization of such issuer exceeds 

2 $1,500,000,000. 

3 ‘‘(B) VENTURE SECURITY.—The term 

4 ‘venture security’ means— 

5 ‘‘(i) securities of an early-stage, 

6 growth company that are exempt from reg7 istration pursuant to section 3(b) of the 

8 Securities Act of 1933; and 

9 ‘‘(ii) securities of an emerging growth 

10 company.’’. 

11 (b) SECURITIES ACT OF 1933.—Section 18(b)(1) of 

12 the Securities Act of 1933 (15 U.S.C. 77r(b)(1)) is 

13 amended— 

14 (1) in subparagraph (B), by striking ‘‘or’’ at 

15 the end; 

16 (2) in subparagraph (C), by striking the period 

17 and inserting ‘‘; or’’; and 

18 (3) by adding at the end the following: 

19 ‘‘(D) a venture security, as defined under 

20 section 6(m)(4) of the Securities Exchange Act 

21 of 1934.’’. 

22 (c) SENSE OF CONGRESS.—It is the sense of the Con23 gress that the Securities and Exchange Commission 

24 should— 


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1 (1) when necessary or appropriate in the public 

2 interest and consistent with the protection of inves3 tors, make use of the Commission’s general exemp4 tive authority under section 36 of the Securities Ex5 change Act of 1934 (15 U.S.C. 78mm) with respect 

6 to the provisions added by this section; and 

7 (2) if the Commission determines appropriate, 

8 create an Office of Venture Exchanges within the 

9 Commission’s Division of Trading and Markets. 

10 (d) RULE OF CONSTRUCTION.—Nothing in this sec11 tion or the amendments made by this section shall be con12 strued to impair or limit the construction of the antifraud 

13 provisions of the securities laws (as defined in section 3(a) 

14 of the Securities Exchange Act of 1934 (15 U.S.C. 

15 78c(a))) or the authority of the Securities and Exchange 

16 Commission under those provisions. 

17 (e) EFFECTIVE DATE FOR TIERS OF EXISTING NA18 TIONAL SECURITIES EXCHANGES.—In the case of a secu19 rities exchange that is registered as a national securities 

20 exchange under section 6 of the Securities Exchange Act 

21 of 1934 (15 U.S.C. 78f) on the date of the enactment of 

22 this Act, any election for a listing tier of such exchange 

23 to be treated as a venture exchange under subsection (m) 


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1 of such section shall not take effect before the date that 

2 is 180 days after such date of enactment. 

Æ 


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