105TH CONGRESS

2D SESSION S. 1260

AMENDMENT
In the House of Representatives, U. S.,

July 22, 1998.

Resolved, That the bill from the Senate (S. 1260) entitled ‘‘An Act to amend the Securities Act of 1933 and the

Securities Exchange Act of 1934 to limit the conduct of securities class actions under State law, and for other purposes’’,

do pass with the following

AMENDMENT:

Strike out all after the enacting clause and insert:

1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Securities Litigation

3 Uniform Standards Act of 1998’’.

4 TITLE I—SECURITIES LITIGA5 TION UNIFORM STANDARDS

6 SEC. 101. LIMITATION ON REMEDIES.

7 (a) AMENDMENTS TO THE SECURITIES ACT OF

8 1933.—

9 (1) AMENDMENT.—Section 16 of the Securities

10 Act of 1933 (15 U.S.C. 77p) is amended to read as

11 follows:
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1 ‘‘SEC. 16. ADDITIONAL REMEDIES; LIMITATION ON REM2 EDIES.

3 ‘‘(a) REMEDIES ADDITIONAL.—Except as provided in

4 subsection (b), the rights and remedies provided by this title

5 shall be in addition to any and all other rights and rem6 edies that may exist at law or in equity.

7 ‘‘(b) CLASS ACTION LIMITATIONS.—No covered class

8 action based upon the statutory or common law of any

9 State or subdivision thereof may be maintained in any

10 State or Federal court by any private party alleging—

11 ‘‘(1) an untrue statement or omission of a mate12 rial fact in connection with the purchase or sale of a

13 covered security; or

14 ‘‘(2) that the defendant used or employed any

15 manipulative or deceptive device or contrivance in

16 connection with the purchase or sale of a covered secu17 rity.

18 ‘‘(c) REMOVAL OF COVERED CLASS ACTIONS.—Any

19 covered class action brought in any State court involving

20 a covered security, as set forth in subsection (b), shall be

21 removable to the Federal district court for the district in

22 which the action is pending, and shall be subject to sub23 section (b).

24 ‘‘(d) PRESERVATION OF CERTAIN ACTIONS.—

25 ‘‘(1) ACTIONS UNDER STATE LAW OF STATE OF

26 INCORPORATION.—
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1 ‘‘(A) ACTIONS PRESERVED.—Notwithstand2 ing subsection (b) or (c), a covered class action

3 described in subparagraph (B) of this paragraph

4 that is based upon the statutory or common law

5 of the State in which the issuer is incorporated

6 (in the case of a corporation) or organized (in

7 the case of any other entity) may be maintained

8 in a State or Federal court by a private party.

9 ‘‘(B) PERMISSIBLE ACTIONS.—A covered

10 class action is described in this subparagraph if

11 it involves—

12 ‘‘(i) the purchase or sale of securities

13 by the issuer or an affiliate of the issuer ex14 clusively from or to holders of equity securi15 ties of the issuer; or

16 ‘‘(ii) any recommendation, position, or

17 other communication with respect to the

18 sale of securities of the issuer that—

19 ‘‘(I) is made by or on behalf of the

20 issuer or an affiliate of the issuer to

21 holders of equity securities of the

22 issuer; and

23 ‘‘(II) concerns decisions of those

24 equity holders with respect to voting

25 their securities, acting in response to a
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1 tender or exchange offer, or exercising

2 dissenters’ or appraisal rights.

3 ‘‘(2) STATE ACTIONS.—

4 ‘‘(A) IN GENERAL.—Notwithstanding any

5 other provision of this section, nothing in this

6 section may be construed to preclude a State or

7 political subdivision thereof or a State pension

8 plan from bringing an action involving a cov9 ered security on its own behalf, or as a member

10 of a class comprised solely of other States, politi11 cal subdivisions, or State pension plans that are

12 named plaintiffs, and that have authorized par13 ticipation, in such action.

14 ‘‘(B) STATE PENSION PLAN DEFINED.—For

15 purposes of this paragraph, the term ‘State pen16 sion plan’ means a pension plan established and

17 maintained for its employees by the government

18 of the State or political subdivision thereof, or by

19 any agency or instrumentality thereof.

20 ‘‘(3) ACTIONS UNDER CONTRACTUAL AGREE21 MENTS BETWEEN ISSUERS AND INDENTURE TRUST22 EES.—Notwithstanding subsection (b) or (c), a cov23 ered class action that seeks to enforce a contractual

24 agreement between an issuer and an indenture trustee
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1 may be maintained in a State or Federal court by a

2 party to the agreement or a successor to such party.

3 ‘‘(4) REMAND OF REMOVED ACTIONS.—In an ac4 tion that has been removed from a State court pursu5 ant to subsection (c), if the Federal court determines

6 that the action may be maintained in State court

7 pursuant to this subsection, the Federal court shall re8 mand such action to such State court.

9 ‘‘(e) PRESERVATION OF STATE JURISDICTION.—The

10 securities commission (or any agency or office performing

11 like functions) of any State shall retain jurisdiction under

12 the laws of such State to investigate and bring enforcement

13 actions.

14 ‘‘(f) DEFINITIONS.—For purposes of this section, the

15 following definitions shall apply:

16 ‘‘(1) AFFILIATE OF THE ISSUER.—The term ‘af17 filiate of the issuer’ means a person that directly or

18 indirectly, through one or more intermediaries, con19 trols or is controlled by or is under common control

20 with, the issuer.

21 ‘‘(2) COVERED CLASS ACTION.—

22 ‘‘(A) IN GENERAL.—The term ‘covered class

23 action’ means—

24 ‘‘(i) any single lawsuit in which—
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1 ‘‘(I) damages are sought on behalf

2 of more than 50 persons or prospective

3 class members, and questions of law or

4 fact common to those persons or mem5 bers of the prospective class, without

6 reference to issues of individualized re7 liance on an alleged misstatement or

8 omission, predominate over any ques9 tions affecting only individual persons

10 or members; or

11 ‘‘(II) one or more named parties

12 seek to recover damages on a represent13 ative basis on behalf of themselves and

14 other unnamed parties similarly situ15 ated, and questions of law or fact com16 mon to those persons or members of the

17 prospective class predominate over any

18 questions affecting only individual per19 sons or members; or

20 ‘‘(ii) any group of lawsuits filed in or

21 pending in the same court and involving

22 common questions of law or fact, in

23 which—

24 ‘‘(I) damages are sought on behalf

25 of more than 50 persons; and
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1 ‘‘(II) the lawsuits are joined, con2 solidated, or otherwise proceed as a

3 single action for any purpose.

4 ‘‘(B) EXCEPTION FOR DERIVATIVE AC5 TIONS.—Notwithstanding subparagraph (A), the

6 term ‘covered class action’ does not include an

7 exclusively derivative action brought by one or

8 more shareholders on behalf of a corporation.

9 ‘‘(C) COUNTING OF CERTAIN CLASS MEM10 BERS.—For purposes of this paragraph, a cor11 poration, investment company, pension plan,

12 partnership, or other entity, shall be treated as

13 one person or prospective class member, but only

14 if the entity is not established for the purpose of

15 participating in the action.

16 ‘‘(D) RULE OF CONSTRUCTION.—Nothing in

17 this paragraph shall be construed to affect the

18 discretion of a State court in determining wheth19 er actions filed in such court should be joined,

20 consolidated, or otherwise allowed to proceed as

21 a single action.

22 ‘‘(3) COVERED SECURITY.—The term ‘covered se23 curity’ means a security that satisfies the standards

24 for a covered security specified in section 18(b)(1) at

25 the time during which it is alleged that the misrepre-
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1 sentation, omission, or manipulative or deceptive con2 duct occurred, except that such term shall not include

3 any debt security that is exempt from registration

4 under this title pursuant to rules issued by the Com5 mission under section 4(2) of this title.’’.

6 (2) CIRCUMVENTION OF STAY OF DISCOVERY.—

7 Section 27(b) of the Securities Act of 1933 (15 U.S.C.

8 77z–1(b)) is amended by inserting after paragraph

9 (3) the following new paragraph:

10 ‘‘(4) CIRCUMVENTION OF STAY OF DISCOVERY.—

11 Upon a proper showing, a court may stay discovery

12 proceedings in any private action in a State court as

13 necessary in aid of its jurisdiction, or to protect or

14 effectuate its judgments, in an action subject to a stay

15 of discovery pursuant to this subsection.’’.

16 (3) CONFORMING AMENDMENTS.—Section 22(a)

17 of the Securities Act of 1933 (15 U.S.C. 77v(a)) is

18 amended—

19 (A) by inserting ‘‘except as provided in sec20 tion 16 with respect to covered class actions,’’

21 after ‘‘Territorial courts,’’; and

22 (B) by striking ‘‘No case’’ and inserting

23 ‘‘Except as provided in section 16(c), no case’’.

24 (b) AMENDMENTS TO THE SECURITIES EXCHANGE

25 ACT OF 1934.—
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1 (1) AMENDMENT.—Section 28 of the Securities

2 Exchange Act of 1934 (15 U.S.C. 78bb) is amended—

3 (A) in subsection (a), by striking ‘‘The

4 rights and remedies’’ and inserting ‘‘Except as

5 provided in subsection (f), the rights and rem6 edies’’; and

7 (B) by adding at the end the following new

8 subsection:

9 ‘‘(f) LIMITATIONS ON REMEDIES.—

10 ‘‘(1) CLASS ACTION LIMITATIONS.—No covered

11 class action based upon the statutory or common law

12 of any State or subdivision thereof may be main13 tained in any State or Federal court by any private

14 party alleging—

15 ‘‘(A) a misrepresentation or omission of a

16 material fact in connection with the purchase or

17 sale of a covered security; or

18 ‘‘(B) that the defendant used or employed

19 any manipulative or deceptive device or contriv20 ance in connection with the purchase or sale of

21 a covered security.

22 ‘‘(2) REMOVAL OF COVERED CLASS ACTIONS.—

23 Any covered class action brought in any State court

24 involving a covered security, as set forth in para25 graph (1), shall be removable to the Federal district
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1 court for the district in which the action is pending,

2 and shall be subject to paragraph (1).

3 ‘‘(3) PRESERVATION OF CERTAIN ACTIONS.—

4 ‘‘(A) ACTIONS UNDER STATE LAW OF STATE

5 OF INCORPORATION.—

6 ‘‘(i) ACTIONS PRESERVED.—Notwith7 standing paragraph (1) or (2), a covered

8 class action described in clause (ii) of this

9 subparagraph that is based upon the statu10 tory or common law of the State in which

11 the issuer is incorporated (in the case of a

12 corporation) or organized (in the case of

13 any other entity) may be maintained in a

14 State or Federal court by a private party.

15 ‘‘(ii) PERMISSIBLE ACTIONS.—A cov16 ered class action is described in this clause

17 if it involves—

18 ‘‘(I) the purchase or sale of securi19 ties by the issuer or an affiliate of the

20 issuer exclusively from or to holders of

21 equity securities of the issuer; or

22 ‘‘(II) any recommendation, posi23 tion, or other communication with re24 spect to the sale of securities of an

25 issuer that—
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1 ‘‘(aa) is made by or on behalf

2 of the issuer or an affiliate of the

3 issuer to holders of equity securi4 ties of the issuer; and

5 ‘‘(bb) concerns decisions of

6 such equity holders with respect to

7 voting their securities, acting in

8 response to a tender or exchange

9 offer, or exercising dissenters’ or

10 appraisal rights.

11 ‘‘(B) STATE ACTIONS.—

12 ‘‘(i) IN GENERAL.—Notwithstanding

13 any other provision of this subsection, noth14 ing in this subsection may be construed to

15 preclude a State or political subdivision

16 thereof or a State pension plan from bring17 ing an action involving a covered security

18 on its own behalf, or as a member of a class

19 comprised solely of other States, political

20 subdivisions, or State pension plans that

21 are named plaintiffs, and that have author22 ized participation, in such action.

23 ‘‘(ii) STATE PENSION PLAN DE24 FINED.—For purposes of this subparagraph,

25 the term ‘State pension plan’ means a pen-
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1 sion plan established and maintained for its

2 employees by the government of a State or

3 political subdivision thereof, or by any

4 agency or instrumentality thereof.

5 ‘‘(C) ACTIONS UNDER CONTRACTUAL

6 AGREEMENTS BETWEEN ISSUERS AND INDEN7 TURE TRUSTEES.—Notwithstanding paragraph

8 (1) or (2), a covered class action that seeks to en9 force a contractual agreement between an issuer

10 and an indenture trustee may be maintained in

11 a State or Federal court by a party to the agree12 ment or a successor to such party.

13 ‘‘(D) REMAND OF REMOVED ACTIONS.—In

14 an action that has been removed from a State

15 court pursuant to paragraph (2), if the Federal

16 court determines that the action may be main17 tained in State court pursuant to this subsection,

18 the Federal court shall remand such action to

19 such State court.

20 ‘‘(4) PRESERVATION OF STATE JURISDICTION.—

21 The securities commission (or any agency or office

22 performing like functions) of any State shall retain

23 jurisdiction under the laws of such State to inves24 tigate and bring enforcement actions.
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1 ‘‘(5) DEFINITIONS.—For purposes of this sub2 section, the following definitions shall apply:

3 ‘‘(A) AFFILIATE OF THE ISSUER.—The term

4 ‘affiliate of the issuer’ means a person that di5 rectly or indirectly, through one or more inter6 mediaries, controls or is controlled by or is

7 under common control with, the issuer.

8 ‘‘(B) COVERED CLASS ACTION.—The term

9 ‘covered class action’ means—

10 ‘‘(i) any single lawsuit in which—

11 ‘‘(I) damages are sought on behalf

12 of more than 50 persons or prospective

13 class members, and questions of law or

14 fact common to those persons or mem15 bers of the prospective class, without

16 reference to issues of individualized re17 liance on an alleged misstatement or

18 omission, predominate over any ques19 tions affecting only individual persons

20 or members; or

21 ‘‘(II) one or more named parties

22 seek to recover damages on a represent23 ative basis on behalf of themselves and

24 other unnamed parties similarly situ25 ated, and questions of law or fact com-
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1 mon to those persons or members of the

2 prospective class predominate over any

3 questions affecting only individual per4 sons or members; or

5 ‘‘(ii) any group of lawsuits filed in or

6 pending in the same court and involving

7 common questions of law or fact, in

8 which—

9 ‘‘(I) damages are sought on behalf

10 of more than 50 persons; and

11 ‘‘(II) the lawsuits are joined, con12 solidated, or otherwise proceed as a

13 single action for any purpose.

14 ‘‘(C) EXCEPTION FOR DERIVATIVE AC15 TIONS.—Notwithstanding subparagraph (B), the

16 term ‘covered class action’ does not include an

17 exclusively derivative action brought by one or

18 more shareholders on behalf of a corporation.

19 ‘‘(D) COUNTING OF CERTAIN CLASS MEM20 BERS.—For purposes of this paragraph, a cor21 poration, investment company, pension plan,

22 partnership, or other entity, shall be treated as

23 one person or prospective class member, but only

24 if the entity is not established for the purpose of

25 participating in the action.
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1 ‘‘(E) COVERED SECURITY.—The term ‘cov2 ered security’ means a security that satisfies the

3 standards for a covered security specified in sec4 tion 18(b)(1) of the Securities Act of 1933, at the

5 time during which it is alleged that the mis6 representation, omission, or manipulative or de7 ceptive conduct occurred, except that such term

8 shall not include any debt security that is ex9 empt from registration under the Securities Act

10 of 1933 pursuant to rules issued by the Commis11 sion under section 4(2) of such Act.

12 ‘‘(F) RULE OF CONSTRUCTION.—Nothing in

13 this paragraph shall be construed to affect the

14 discretion of a State court in determining wheth15 er actions filed in such court should be joined,

16 consolidated, or otherwise allowed to proceed as

17 a single action.’’.

18 (2) CIRCUMVENTION OF STAY OF DISCOVERY.—

19 Section 21D(b)(3) of the Securities Exchange Act of

20 1934 (15 U.S.C. 78u–4(b)(3)) is amended by insert21 ing after subparagraph (C) the following new sub22 paragraph:

23 ‘‘(D) CIRCUMVENTION OF STAY OF DISCOV24 ERY.—Upon a proper showing, a court may stay

25 discovery proceedings in any private action in a
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1 State court as necessary in aid of its jurisdic2 tion, or to protect or effectuate its judgments, in

3 an action subject to a stay of discovery pursuant

4 to this paragraph.’’.

5 (c) APPLICABILITY.—The amendments made by this

6 section shall not affect or apply to any action commenced

7 before and pending on the date of enactment of this Act.

8 SEC. 102. PROMOTION OF RECIPROCAL SUBPOENA EN9 FORCEMENT.

10 (a) COMMISSION ACTION.—The Securities and Ex11 change Commission, in consultation with State securities

12 commissions, shall seek to encourage the adoption of State

13 laws providing for reciprocal enforcement by State securi14 ties commissions of subpoenas issued by another State secu15 rities commission seeking to compel persons to attend, tes16 tify in, or produce documents or records in connection with

17 an action or investigation by a State securities commission

18 of an alleged violation of State securities laws.

19 (b) REPORT.—Within 24 months after the date of en20 actment of this Act, the Commission shall submit a report

21 to the Congress—

22 (1) identifying the States that have adopted laws

23 described in subsection (a);
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1 (2) describing the actions undertaken by the

2 Commission and State securities commissions to pro3 mote the adoption of such laws; and

4 (3) identifying any further actions the Commis5 sion recommends for such purposes.

6 SEC. 103. REPORT ON CONSEQUENCES.

7 The Securities and Exchange Commission shall in8 clude in each of its first three annual reports submitted

9 after the date of enactment of this Act a report regarding—

10 (1) the nature and the extent of the class action

11 cases that are preempted by, or removed pursuant to,

12 the amendments made by section 101 of this title;

13 (2) the extent to which that preemption or re14 moval either promotes or adversely affects the protec15 tion of securities investors or the public interest; and

16 (3) if adverse effects are found, alternatives to, or

17 revisions of, such preemption or removal that—

18 (A) would not have such adverse effects;

19 (B) would further promote the protection of

20 investors and the public interest; and

21 (C) would still substantially reduce the risk

22 of abusive securities litigation.
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1 TITLE II—REAUTHORIZATION OF

2 THE SECURITIES AND EX3 CHANGE COMMISSION

4 SEC. 201. AUTHORIZATION OF APPROPRIATIONS.

5 Section 35 of the Securities Exchange Act of 1934 (15

6 U.S.C. 78kk) is amended to read as follows:

7 ‘‘SEC. 35. AUTHORIZATION OF APPROPRIATIONS.

8 ‘‘(a) IN GENERAL.—In addition to any other funds au9 thorized to be appropriated to the Commission, there are

10 authorized to be appropriated to carry out the functions,

11 powers, and duties of the Commission $351,280,000 for fis12 cal year 1999.

13 ‘‘(b) MISCELLANEOUS EXPENSES.—Funds appro14 priated pursuant to this section are authorized to be ex15 pended—

16 ‘‘(1) not to exceed $3,000 per fiscal year, for offi17 cial reception and representation expenses;

18 ‘‘(2) not to exceed $10,000 per fiscal year, for

19 funding a permanent secretariat for the International

20 Organization of Securities Commissions; and

21 ‘‘(3) not to exceed $100,000 per fiscal year, for

22 expenses for consultations and meetings hosted by the

23 Commission with foreign governmental and other reg24 ulatory officials, members of their delegations, appro25 priate representatives, and staff to exchange views
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1 concerning developments relating to securities mat2 ters, for development and implementation of coopera3 tion agreements concerning securities matters and

4 provision of technical assistance for the development

5 of foreign securities markets, such expenses to include

6 necessary logistic and administrative expenses and

7 the expenses of Commission staff and foreign invitees

8 in attendance at such consultations and meetings, in9 cluding—

10 ‘‘(A) such incidental expenses as meals

11 taken in the course of such attendance;

12 ‘‘(B) any travel or transportation to or

13 from such meetings; and

14 ‘‘(C) any other related lodging or subsist15 ence.’’.

16 SEC. 202. REQUIREMENTS FOR THE EDGAR SYSTEM.

17 Section 35A of the Securities Exchange Act of 1934

18 (15 U.S.C. 78ll) is amended—

19 (1) by striking subsections (a), (b), (c), and (e);

20 and

21 (2) in subsection (d)—

22 (A) by striking the subsection designation;

23 (B) by striking ‘‘; and’’ at the end of para24 graph (2) and inserting a period; and

25 (C) by striking paragraph (3).
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1 TITLE III—CLERICAL AND

2 TECHNICAL AMENDMENTS

3 SEC. 301. CLERICAL AND TECHNICAL AMENDMENTS.

4 (a) SECURITIES ACT OF 1933.—The Securities Act of

5 1933 (15 U.S.C. 77 et seq.) is amended as follows:

6 (1) Section 2(a)(15)(i) (15 U.S.C. 77b(a)(15)(i))

7 is amended by striking ‘‘section 2(13) of the Act’’ and

8 inserting ‘‘paragraph (13) of this subsection’’.

9 (2) Section 11(f)(2)(A) (15 U.S.C. 77k(f)(2)(A))

10 is amended by striking ‘‘section 38’’ and inserting

11 ‘‘section 21D(f)’’.

12 (3) Section 13 (15 U.S.C. 77m) is amended—

13 (A) by striking ‘‘section 12(2)’’ each place it

14 appears and inserting ‘‘section 12(a)(2)’’; and

15 (B) by striking ‘‘section 12(1)’’ each place it

16 appears and inserting ‘‘section 12(a)(1)’’.

17 (4) Section 18 (15 U.S.C. 77r) is amended—

18 (A) in subsection (b)(1)(A), by inserting ‘‘,

19 or authorized for listing,’’ after ‘‘Exchange, or

20 listed’’;

21 (B) in subsection (c)(2)(B)(i), by striking

22 ‘‘Capital Markets Efficiency Act of 1996’’ and

23 inserting ‘‘National Securities Markets Improve24 ment Act of 1996’’;
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1 (C) in subsection (c)(2)(C)(i), by striking

2 ‘‘Market’’ and inserting ‘‘Markets’’;

3 (D) in subsection (d)(1)(A)—

4 (i) by striking ‘‘section 2(10)’’ and in5 serting ‘‘section 2(a)(10)’’; and

6 (ii) by striking ‘‘subparagraphs (A)

7 and (B)’’ and inserting ‘‘subparagraphs (a)

8 and (b)’’;

9 (E) in subsection (d)(2), by striking ‘‘Secu10 rities Amendments Act of 1996’’ and inserting

11 ‘‘National Securities Markets Improvement Act

12 of 1996’’; and

13 (F) in subsection (d)(4), by striking ‘‘For

14 purposes of this paragraph, the’’ and inserting

15 ‘‘The’’.

16 (5) Sections 27, 27A, and 28 (15 U.S.C. 77z–1,

17 77z–2, 77z–3) are transferred to appear after section

18 26.

19 (6) Paragraph (28) of schedule A of such Act (15

20 U.S.C. 77aa(28)) is amended by striking ‘‘identic’’

21 and inserting ‘‘identical’’.

22 (b) SECURITIES EXCHANGE ACT OF 1934.—The Secu23 rities Exchange Act of 1934 (15 U.S.C. 78 et seq.) is amend24 ed as follows:
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1 (1) Section 3(a)(10) (15 U.S.C. 78c(a)(10)) is

2 amended by striking ‘‘deposit, for’’ and inserting ‘‘de3 posit for’’.

4 (2) Section 3(a)(12)(A) (15 U.S.C.

5 78c(a)(12)(A)) is amended by moving clause (vi) two

6 em spaces to the left.

7 (3) Section 3(a)(22)(A) (15 U.S.C.

8 78c(a)(22)(A)) is amended—

9 (A) by striking ‘‘section 3(h)’’ and inserting

10 ‘‘section 3’’; and

11 (B) by striking ‘‘section 3(t)’’ and inserting

12 ‘‘such section 3’’.

13 (4) Section 3(a)(39)(B)(i) (15 U.S.C.

14 78c(a)(39)(B)(i)) is amended by striking ‘‘an order to

15 the Commission’’ and inserting ‘‘an order of the Com16 mission’’.

17 (5) The following sections are each amended by

18 striking ‘‘Federal Reserve Board’’ and inserting

19 ‘‘Board of Governors of the Federal Reserve System’’:

20 subsections (a) and (b) of section 7 (15 U.S.C. 78g(a),

21 (b)); section 17(g) (15 U.S.C. 78q(g)); and section 26

22 (15 U.S.C. 78z).

23 (6) The heading of subsection (d) of section 7 (15

24 U.S.C. 78g(d)) is amended by striking ‘‘EXCEPTION’’

25 and inserting ‘‘EXCEPTIONS’’.
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1 (7) Section 14(g)(4) (15 U.S.C. 78n(g)(4)) is

2 amended by striking ‘‘consolidation sale,’’ and insert3 ing ‘‘consolidation, sale,’’.

4 (8) Section 15 (15 U.S.C. 78o) is amended—

5 (A) in subsection (c), by moving paragraph

6 (8) two em spaces to the left;

7 (B) in subsection (h)(2), by striking ‘‘affect8 ing’’ and inserting ‘‘effecting’’;

9 (C) in subsection (h)(3)(A)(i)(II)(bb), by in10 serting ‘‘or’’ after the semicolon;

11 (D) in subsection (h)(3)(A)(ii)(I), by strik12 ing ‘‘maintains’’ and inserting ‘‘maintained’’;

13 (E) in subsection (h)(3)(B)(ii), by striking

14 ‘‘association’’ and inserting ‘‘associated’’.

15 (9) Section 15B(c)(4) (15 U.S.C. 78o–4(c)(4)) is

16 amended by striking ‘‘convicted by any offense’’ and

17 inserting ‘‘convicted of any offense’’.

18 (10) Section 15C(f)(5) (15 U.S.C. 78o–5(f)(5)) is

19 amended by striking ‘‘any person or class or persons’’

20 and inserting ‘‘any person or class of persons’’.

21 (11) Section 19(c) (15 U.S.C. 78s(c)) is amended

22 by moving paragraph (5) two em spaces to the right.

23 (12) Section 20 (15 U.S.C. 78t) is amended by

24 redesignating subsection (f) as subsection (e).
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1 (13) Section 21D (15 U.S.C. 78u–4) is amend2 ed—

3 (A) by redesignating subsection (g) as sub4 section (f); and

5 (B) in paragraph (2)(B)(i) of such sub6 section, by striking ‘‘paragraph (1)’’ and insert7 ing ‘‘subparagraph (A)’’.

8 (14) Section 31(a) (15 U.S.C. 78ee(a)) is amend9 ed by striking ‘‘this subsection’’ and inserting ‘‘this

10 section’’.

11 (c) INVESTMENT COMPANY ACT OF 1940.—The Invest12 ment Company Act of 1940 (15 U.S.C. 80a–1 et seq.) is

13 amended as follows:

14 (1) Section 2(a)(8) (15 U.S.C. 80a–2(a)(8)) is

15 amended by striking ‘‘Unitde’’ and inserting

16 ‘‘United’’.

17 (2) Section 3(b) (15 U.S.C. 80a–3(b)) is amend18 ed by striking ‘‘paragraph (3) of subsection (a)’’ and

19 inserting ‘‘paragraph (1)(C) of subsection (a)’’.

20 (3) Section 12(d)(1)(G)(i)(III)(bb) (15 U.S.C.

21 80a–12(d)(1)(G)(i)(III)(bb)), by striking ‘‘the ac22 quired fund’’ and inserting ‘‘the acquired company’’.

23 (4) Section 18(e)(2) (15 U.S.C. 80a–18(e)(2)) is

24 amended by striking ‘‘subsection (e)(2)’’ and inserting

25 ‘‘paragraph (1) of this subsection’’.
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1 (5) Section 30 (15 U.S.C. 80a–29) is amended—

2 (A) by inserting ‘‘and’’ after the semicolon

3 at the end of subsection (b)(1);

4 (B) in subsection (e), by striking ‘‘semi-an5 nually’’ and inserting ‘‘semiannually’’; and

6 (C) by redesignating subsections (g) and (h)

7 as added by section 508(g) of the National Secu8 rities Markets Improvement Act of 1996 as sub9 sections (i) and (j), respectively.

10 (6) Section 31(f) (15 U.S.C. 80a–30(f)) is

11 amended by striking ‘‘subsection (c)’’ and inserting

12 ‘‘subsection (e)’’.

13 (d) INVESTMENT ADVISERS ACT OF 1940.—The Invest14 ment Advisers Act of 1940 (15 U.S.C. 80b et seq.) is amend15 ed as follows:

16 (1) Section 203(e)(8)(B) (15 U.S.C. 80b–

17 3(e)(8)(B)) is amended by inserting ‘‘or’’ after the

18 semicolon.

19 (2) Section 222(b)(2) of (15 U.S.C. 80b–

20 18a(b)(2)) is amended by striking ‘‘principle’’ and

21 inserting ‘‘principal’’.

22 (e) TRUST INDENTURE ACT OF 1939.—The Trust In23 denture Act of 1939 (15 U.S.C. 77aaa et seq.) is amended

24 as follows:
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1 (1) Section 303 (15 U.S.C. 77ccc) is amended by

2 striking ‘‘section 2’’ each place it appears in para3 graphs (2) and (3) and inserting ‘‘section 2(a)’’.

4 (2) Section 304(a)(4)(A) (15 U.S.C.

5 77ddd(a)(4)(A)) is amended by striking ‘‘(14) of sub6 section’’ and inserting ‘‘(13) of section’’.

7 (3) Section 313(a) (15 U.S.C. 77mmm(a)) is

8 amended—

9 (A) by inserting ‘‘any change to’’ after the

10 paragraph designation at the beginning of para11 graph (4); and

12 (B) by striking ‘‘any change to’’ in para13 graph (6).

14 (4) Section 319(b) (15 U.S.C. 77sss(b)) is

15 amended by striking ‘‘the Federal Register Act’’ and

16 inserting ‘‘chapter 15 of title 44, United States

17 Code,’’.
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1 SEC. 302. EXEMPTION OF SECURITIES ISSUED IN CONNEC2 TION WITH CERTAIN STATE HEARINGS.

3 Section 18(b)(4)(C) of the Securities Act of 1933 (15

4 U.S.C. 77r(b)(4)(C)) is amended by striking ‘‘paragraph

5 (4) or (11)’’ and inserting ‘‘paragraph (4), (10), or (11)’’.

Attest:

Clerk.