I 

116TH CONGRESS 

1ST SESSION H. R. 2899 

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

of venture exchanges, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 22, 2019 

Mr. EMMER (for himself and Mr. GONZALEZ of Texas) 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 registration of venture exchanges, 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: 

10 ‘‘(m) VENTURE EXCHANGE.— 


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1 ‘‘(1) REGISTRATION.— 

2 ‘‘(A) IN GENERAL.—A person may register 

3 themself (and a national securities exchange 

4 may register a listing tier of such exchange) as 

5 a national securities exchange solely for the 

6 purposes of trading venture securities by filing 

7 an application with the Commission pursuant to 

8 subsection (a) and the rules and regulations 

9 thereunder. 

10 ‘‘(B) PUBLICATION OF NOTICE.—The 

11 Commission shall, upon the filing of an applica12 tion under subparagraph (A), publish notice of 

13 such filing and afford interested persons an op14 portunity to submit written data, views, and ar15 guments concerning such application. 

16 ‘‘(C) APPROVAL OR DENIAL.— 

17 ‘‘(i) IN GENERAL.—Within 90 days of 

18 the date of publication of a notice under 

19 subparagraph (B) (or within such longer 

20 period as to which the applicant consents), 

21 the Commission shall— 

22 ‘‘(I) by order grant such registra23 tion; or 


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1 ‘‘(II) institute a denial pro2 ceeding under clause (ii) to determine 

3 whether registration should be denied. 

4 ‘‘(ii) DENIAL PROCEEDING.—A pro5 ceeding under clause (i)(II) shall include 

6 notice of the grounds for denial under con7 sideration and opportunity for hearing and 

8 shall be concluded within 180 days of the 

9 date of the publication of a notice under 

10 subparagraph (B). At the conclusion of 

11 such proceeding the Commission, by order, 

12 shall grant or deny such registration. The 

13 Commission may extend the time for con14 clusion of such proceeding for up to 90 

15 days if the Commission finds good cause 

16 for such extension and publishes the Com17 mission’s reasons for so finding or for such 

18 longer period as to which the applicant 

19 consents. 

20 ‘‘(iii) CRITERIA FOR APPROVAL OR

21 DENIAL.—The Commission shall grant a 

22 registration under this paragraph if the 

23 Commission finds that the requirements of 

24 this title and the rules and regulations 

25 thereunder with respect to the applicant 


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1 are satisfied. The Commission shall deny 

2 such registration if it does not make such 

3 finding. 

4 ‘‘(2) POWERS AND RESTRICTIONS.—In addition 

5 to the powers and restrictions otherwise applicable 

6 to a national securities exchange, a venture ex7 change— 

8 ‘‘(A) may only constitute, maintain, or pro9 vide a market place or facilities for bringing to10 gether purchasers and sellers of venture securi11 ties; 

12 ‘‘(B) may not extend unlisted trading 

13 privileges to any venture security; 

14 ‘‘(C) may only, if the venture exchange is 

15 a listing tier of another national securities ex16 change, allow trading in securities that are reg17 istered under section 12(b) on a national securi18 ties exchange other than a venture exchange; 

19 and 

20 ‘‘(D) may, subject to the rule filing process 

21 under section 19(b)— 

22 ‘‘(i) determine the increment to be 

23 used for quoting and trading venture secu24 rities on the exchange; and 


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1 ‘‘(ii) choose to carry out periodic auc2 tions for the sale of a venture security in3 stead of providing continuous trading of 

4 the venture security. 

5 ‘‘(3) TREATMENT OF CERTAIN EXEMPTED SE6 CURITIES.—A security that is exempt from registra7 tion pursuant to section 3(b) of the Securities Act 

8 of 1933 shall be exempt from section 12(a) of this 

9 title to the extent such securities are traded on a 

10 venture exchange, if the issuer of such security is in 

11 compliance with— 

12 ‘‘(A) all disclosure obligations of such sec13 tion 3(b) and the regulations issued under such 

14 section; and 

15 ‘‘(B) ongoing disclosure obligations of the 

16 applicable venture exchange that are similar to 

17 those provided by an issuer under tier 2 of Reg18 ulation A (17 CFR 230.251 et seq.). 

19 ‘‘(4) VENTURE SECURITIES TRADED ON VEN20 TURE EXCHANGES MAY NOT TRADE ON NON-VEN21 TURE EXCHANGES.—A venture security may not be 

22 traded on a national securities exchange that is not 

23 a venture exchange during any period in which the 

24 venture security is being traded on a venture ex25 change. 


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1 ‘‘(5) RULE OF CONSTRUCTION.—Nothing in 

2 this subsection may be construed as requiring trans3 actions in venture securities to be effected on a na4 tional securities exchange. 

5 ‘‘(6) COMMISSION AUTHORITY TO LIMIT CER6 TAIN TRADING.—The Commission may limit trans7 actions in venture securities that are not effected on 

8 a national securities exchange as appropriate to pro9 mote efficiency, competition, capital formation, and 

10 to protect investors. 

11 ‘‘(7) DISCLOSURES TO INVESTORS.—The Com12 mission shall issue regulations to ensure that per13 sons selling or purchasing venture securities on a 

14 venture exchange are provided disclosures sufficient 

15 to understand— 

16 ‘‘(A) the characteristics unique to venture 

17 securities; and 

18 ‘‘(B) in the case of a venture exchange 

19 that is a listing tier of another national securi20 ties exchange, that the venture exchange is dis21 tinct from the other national securities ex22 change. 

23 ‘‘(8) DEFINITIONS.—For purposes of this sub24 section: 

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


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1 ‘‘(i) IN GENERAL.—The term ‘early2 stage, growth company’ means an issuer— 

3 ‘‘(I) that has not made any reg4 istered initial public offering of any 

5 securities of the issuer; and 

6 ‘‘(II) with a public float of less 

7 than or equal to the value of public 

8 float required to qualify as a large ac9 celerated filer under section 240.12b– 

10 2 of title 17, Code of Federal Regula11 tions. 

12 ‘‘(ii) TREATMENT WHEN PUBLIC

13 FLOAT EXCEEDS THRESHOLD.—An issuer 

14 shall not cease to be an early-stage, growth 

15 company by reason of the public float of 

16 such issuer exceeding the threshold speci17 fied in clause (i)(II) until the later of the 

18 following: 

19 ‘‘(I) The end of the period of 24 

20 consecutive months during which the 

21 public float of the issuer exceeds 

22 $2,000,000,000 (as such amount is 

23 indexed for inflation every 5 years by 

24 the Commission to reflect the change 

25 in the Consumer Price Index for All 


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1 Urban Consumers published by the 

2 Bureau of Labor Statistics, setting 

3 the threshold to the nearest 

4 $1,000,000). 

5 ‘‘(II) The end of the 1-year pe6 riod following the end of the 24- 

7 month period described under sub8 clause (I), if the issuer requests such 

9 1-year extension from a venture ex10 change and the venture exchange 

11 elects to provide such extension. 

12 ‘‘(B) PUBLIC FLOAT.—With respect to an 

13 issuer, the term ‘public float’ means the aggre14 gate worldwide market value of the voting and 

15 non-voting common equity of the issuer held by 

16 non-affiliates. 

17 ‘‘(C) VENTURE SECURITY.— 

18 ‘‘(i) IN GENERAL.—The term ‘venture 

19 security’ means— 

20 ‘‘(I) securities of an early-stage, 

21 growth company that are exempt from 

22 registration pursuant to section 3(b) 

23 of the Securities Act of 1933; 

24 ‘‘(II) securities of an emerging 

25 growth company; or 


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1 ‘‘(III) securities registered under 

2 section 12(b) and listed on a venture 

3 exchange (or, prior to listing on a ven4 ture exchange, listed on a national se5 curities exchange) where— 

6 ‘‘(aa) the issuer of such se7 curities has a public float less 

8 than or equal to the value of pub9 lic float required to qualify as a 

10 large accelerated filer under sec11 tion 240.12b–2 of title 17, Code 

12 of Federal Regulations; or 

13 ‘‘(bb) the average daily 

14 trade volume is 75,000 shares or 

15 less during a continuous 60-day 

16 period. 

17 ‘‘(ii) TREATMENT WHEN PUBLIC

18 FLOAT EXCEEDS THRESHOLD.—Securities 

19 shall not cease to be venture securities by 

20 reason of the public float of the issuer of 

21 such securities exceeding the threshold 

22 specified in clause (i)(III)(aa) until the 

23 later of the following: 


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1 ‘‘(I) The end of the period of 24 

2 consecutive months beginning on the 

3 date— 

4 ‘‘(aa) the public float of 

5 such issuer exceeds 

6 $2,000,000,000; and 

7 ‘‘(bb) the average daily 

8 trade volume of such securities is 

9 100,000 shares or more during a 

10 continuous 60-day period. 

11 ‘‘(II) The end of the 1-year pe12 riod following the end of the 24- 

13 month period described under sub14 clause (I), if the issuer of such securi15 ties requests such 1-year extension 

16 from a venture exchange and the ven17 ture exchange elects to provide such 

18 extension.’’. 

19 (b) SECURITIES ACT OF 1933.—Section 18 of the Se20 curities Act of 1933 (15 U.S.C. 77r) is amended— 

21 (1) by redesignating subsection (d) as sub22 section (e); and 

23 (2) by inserting after subsection (c) the fol24 lowing: 


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1 ‘‘(d) TREATMENT OF SECURITIES LISTED ON A VEN2 TURE EXCHANGE.—Notwithstanding subsection (b), a se3 curity is not a covered security pursuant to subsection 

4 (b)(1)(A) if the security is only listed, or authorized for 

5 listing, on a venture exchange (as defined under section 

6 6(m) of the Securities Exchange Act of 1934).’’. 

7 (c) SENSE OF CONGRESS.—It is the sense of the Con8 gress that the Securities and Exchange Commission 

9 should— 

10 (1) when necessary or appropriate in the public 

11 interest and consistent with the protection of inves12 tors, make use of the Commission’s general exemp13 tive authority under section 36 of the Securities Ex14 change Act of 1934 (15 U.S.C. 78mm) with respect 

15 to the provisions added by this section; and 

16 (2) if the Commission determines appropriate, 

17 create an Office of Venture Exchanges within the 

18 Commission’s Division of Trading and Markets. 

19 (d) RULE OF CONSTRUCTION.—Nothing in this sec20 tion or the amendments made by this section shall be con21 strued to impair or limit the construction of the antifraud 

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

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

24 78c(a))) or the authority of the Securities and Exchange 

25 Commission under those provisions. 


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1 (e) EFFECTIVE DATE FOR TIERS OF EXISTING NA2 TIONAL SECURITIES EXCHANGES.—In the case of a secu3 rities exchange that is registered as a national securities 

4 exchange under section 6 of the Securities Exchange Act 

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

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

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

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

9 is 180 days after such date of enactment. 

Æ 


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