IIB

106TH CONGRESS

1ST SESSION H. R. 1400

IN THE SENATE OF THE UNITED STATES

JUNE 15, 1999

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 improve

collection and dissemination of information concerning

bond prices and to improve price competition in bond

markets, 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 ‘‘Bond Price Competi3 tion Improvement Act of 1999’’.

4 SEC. 2. EXTENSION OF TRANSACTION REPORTING TO DEBT

5 SECURITIES.

6 (a) AMENDMENT.—Subsection (d) of section 11A of

7 the Securities Exchange Act of 1934 (15 U.S.C. 78k–

8 1(d)) is amended to read as follows:

9 ‘‘(d) MINIMUM REQUIREMENTS FOR TRANSACTION

10 INFORMATION ON DEBT SECURITIES.—

11 ‘‘(1) ACTION REQUIRED.—The Commission

12 shall adopt such rules and take such other actions

13 under this section as may be necessary or appro14 priate, having due regard for the public interest, the

15 protection of investors, and the maintenance of fair

16 and orderly markets to assure the prompt, accurate,

17 reliable, and fair collection, processing, distribution,

18 and publication of transaction information, including

19 last sale data, with respect to covered debt securities

20 so that such information is available to all exchange

21 members, brokers, dealers, securities information

22 processors, and all other persons. In determining the

23 rules or other actions to take under this subsection,

24 the Commission shall take into consideration, among

25 other factors, private sector systems for the collec-
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1 tion and distribution of transaction information on

2 corporate debt securities.

3 ‘‘(2) EFFECT ON OTHER AUTHORITY.—Nothing

4 in this subsection limits or otherwise alters the Com5 mission’s authority under the other provisions of this

6 section or any other provision of this title.

7 ‘‘(3) DEFINITIONS.—For purposes of this sub8 section:

9 ‘‘(A) COVERED DEBT SECURITIES.—The

10 term ‘covered debt securities’ means bonds, de11 bentures, or other debt instruments of an

12 issuer, other than—

13 ‘‘(i) exempted securities; and

14 ‘‘(ii) securities that the Commission

15 determines by rule to except from the re16 quirements of this subsection.

17 ‘‘(B) TRANSACTION INFORMATION.—The

18 term ‘transaction information’ means informa19 tion concerning such price, volume, and yield

20 information associated with a transaction in21 volving the purchase or sale of a covered debt

22 security as may be prescribed by the Commis23 sion by rule for purposes of this subsection.

24 ‘‘(C) FACTORS IN DEFINITIONAL RULES.—

25 In prescribing rules pursuant to this paragraph,
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1 the Commission shall take into consideration

2 the extent to which a security is actively traded,

3 market liquidity, competition, the protection of

4 investors and the public interest, and other rel5 evant factors.’’.

6 (b) CONFORMING AMENDMENT.—Section

7 11A(a)(3)(A) of such Act is amended by striking ‘‘(which

8 shall be in addition to the National Market Advisory

9 Board established pursuant to subsection (d) of this sec10 tion)’’.

11 (c) DEADLINE FOR ACTION.—The Securities and Ex12 change Commission shall take action to implement the re13 quirements of section 11A(d) of the Securities Exchange

14 Act of 1934 (15 U.S.C. 78k–1(d)), as amended by sub15 section (a) of this section, within 12 months after the date

16 of enactment of this Act.

17 SEC. 3. EXCHANGE LISTING OF DEBT SECURITIES.

18 Section 12(a) of the Securities Exchange Act of 1934

19 (15 U.S.C. 78l(a)) is amended by striking the period at

20 the end thereof and inserting the following: ‘‘, except that

21 a registration is not required to be effective for trading

22 on an exchange of a class of debt securities of an issuer

23 that has another class of securities for which a registration

24 is effective for such exchange. Such a class of debt securi25 ties shall, for purposes of any provision of this title or the
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1 rules or regulations thereunder, be treated as a class of

2 securities registered under this section upon approval of

3 the listing of such class of debt securities by the ex4 change.’’.

5 SEC. 4. TECHNICAL AMENDMENT.

6 Section 3(a)(12)(B) of the Securities Exchange Act

7 of 1934 (15 U.S.C. 78c(a)(12)(B)) is amended by adding

8 at the end the following new clause:

9 ‘‘(iii) Notwithstanding subparagraph (A)(i) of

10 this paragraph, securities, other than equity securi11 ties, that are described in subparagraphs (B) and

12 (C) of paragraph (42) of this subsection shall not be

13 deemed to be exempted securities for purposes of

14 section 11A of this title.’’.

15 SEC. 5. STUDIES.

16 (a) STUDIES REQUIRED.—The Comptroller General

17 shall conduct a study of measures needed in the public

18 interest and for the protection of investors to improve the

19 prompt, accurate, reliable, and fair collection, processing,

20 distribution, and publication of information concerning

21 transactions—

22 (1) in debt securities as to which transaction in23 formation is collected but not disseminated pursuant

24 to section 11A(d) of the Securities Exchange Act of
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1 1934, as amended by this Act (15 U.S.C. 78k–1(d));

2 and

3 (2) in municipal securities (as such term is de4 fined in section 3(a)(29) of such Act (15 U.S.C.

5 78c(a)(29)).

6 (b) COMMISSION AND MSRB PARTICIPATION.—The

7 Comptroller General shall conduct the study required by

8 subsection (a)(1) in consultation with the Securities and

9 Exchange Commission, and the study required by sub10 section (a)(2) in consultation with the Securities and Ex11 change Commission and the Municipal Securities Rule12 making Board.

13 (c) SUBMISSION OF REPORTS.—The Comptroller

14 General shall submit to the Congress a report on the stud15 ies required by subsection (a) within one year after the

16 date of enactment of this Act. Such reports shall include

17 an identification of the measures needed to improve the

18 prompt, accurate, reliable, and fair collection, processing,

19 distribution, and publication of information concerning

20 transactions in the debt securities and municipal securities

21 described in such subsection, including measures requiring

22 legislative or regulatory action.

Passed the House of Representatives June 14, 1999.

Attest: JEFF TRANDAHL,

Clerk.