IIB 

116TH CONGRESS 

2D SESSION H. R. 4335 

IN THE SENATE OF THE UNITED STATES 

JANUARY 14, 2020 

Received; read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

AN ACT 

To amend the Securities Exchange Act of 1934 to require 

the Securities and Exchange Commission to issue rules 

that prohibit officers and directors of certain companies 

from trading securities in anticipation of a current report, 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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘8–K Trading Gap Act 

3 of 2019’’. 

4 SEC. 2. PROHIBITION ON CERTAIN TRADING IN ANTICIPA5 TION OF A CURRENT REPORT. 

6 The Securities Exchange Act of 1934 (15 U.S.C. 78a 

7 et seq.) is amended by inserting after section 10D the fol8 lowing: 

9 ‘‘SEC. 10E. PROHIBITION ON CERTAIN TRADING IN ANTICI10 PATION OF A CURRENT REPORT. 

11 ‘‘(a) PROHIBITION.—Not later than 1 year after the 

12 date of enactment of this section, the Commission shall 

13 issue rules that require each issuer that is subject to re14 porting requirements under section 13(a) or 15(d) to es15 tablish and maintain policies, controls, and procedures 

16 that are reasonably designed to prohibit executive officers 

17 and directors of the issuer from purchasing, selling, or 

18 otherwise transferring any equity security of the issuer, 

19 directly or indirectly— 

20 ‘‘(1) with respect to an event described in sec21 tions 1 through 6 of Form 8–K, between— 

22 ‘‘(A) the occurrence of such event; and 

23 ‘‘(B) the filing or furnishing of a current 

24 report on Form 8–K with respect to such event; 

25 and 


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1 ‘‘(2) with respect to an event described in sec2 tion 7 or 8 of Form 8–K, between— 

3 ‘‘(A) the date on which the issuer deter4 mines that it will disclose such event; and 

5 ‘‘(B) the filing or furnishing of a current 

6 report on Form 8–K with respect to such event. 

7 ‘‘(b) PERMISSIBLE TRANSACTIONS.—In issuing rules 

8 under subsection (a), the Commission— 

9 ‘‘(1) may exempt certain transactions that the 

10 Commission determines is appropriate, including 

11 those that— 

12 ‘‘(A) occur automatically; 

13 ‘‘(B) are made pursuant to an advance 

14 election; or 

15 ‘‘(C) except as provided in paragraph (2), 

16 involve a purchase or sale of equity securities 

17 that satisfies the conditions under section 

18 240.10b5–1(c) of title 17, Code of Federal Reg19 ulations; 

20 ‘‘(2) may not exempt from those rules a trans21 action made by an executive officer or director of an 

22 issuer under a plan that— 

23 ‘‘(A) is described in section 240.10b5– 

24 1(c)(1)(i)(A)(3) of title 17, Code of Federal 

25 Regulations; and 


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1 ‘‘(B) was adopted— 

2 ‘‘(i) with respect to an event described 

3 in sections 1 through 6 of Form 8–K, be4 tween— 

5 ‘‘(I) the occurrence of such event; 

6 and 

7 ‘‘(II) the filing or furnishing of a 

8 current report on Form 8–K with re9 spect to such event; and 

10 ‘‘(ii) with respect to an event de11 scribed in section 7 or 8 of Form 8–K, be12 tween— 

13 ‘‘(I) the date on which the issuer 

14 determines that it will disclose such 

15 event; and 

16 ‘‘(II) the filing or furnishing of a 

17 current report on Form 8–K with re18 spect to such event; and 

19 ‘‘(3) shall exempt from those rules— 

20 ‘‘(A) issuers required to adopt and admin21 ister a code of ethics pursuant section 270.17j– 

22 1 of title 17, Code of Federal Regulations, and 

23 any other issuers registered under the Invest24 ment Company Act of 1940 whose investment 

25 advisers are required to adopt and administer a 


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1 code of ethics pursuant to section 275.204A–1 

2 of title 17, Code of Federal Regulations; and 

3 ‘‘(B) any event where such event is de4 scribed in sections 1 through 6 of Form 8–K 

5 and the issuer has announced such event in a 

6 press release or other method of dissemination 

7 that complies with the requirements of section 

8 101(e)(2) of Regulation FD (17 CFR Part 

9 243.101(e)(2)).’’. 

Passed the House of Representatives January 13, 

2020. 

Attest: CHERYL L. JOHNSON, 

Clerk. 


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