I

106TH CONGRESS

1ST SESSION H. R. 1400

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.

IN THE HOUSE OF REPRESENTATIVES

APRIL 14, 1999

Mr. BLILEY (for himself, Mr. OXLEY, Mr. DINGELL, Mr. TAUZIN, Mr.

TOWNS, Mr. GILLMOR, Mr. MARKEY, Mr. GREENWOOD, Mr. HALL of

Texas, Mr. COX, Mr. PALLONE, Mr. LARGENT, Mr. DEUTSCH, Mr.

BILBRAY, Mr. STUPAK, Mr. GANSKE, Mr. ENGEL, Mr. LAZIO, Ms.

DEGETTE, Mr. SHIMKUS, Mr. BARRETT of Wisconsin, Mrs. WILSON, Mr.

LUTHER, Mr. SHADEGG, Mrs. CAPPS, Mr. FOSSELLA, Mr. BLUNT, and

Mr. EHRLICH) introduced the following bill; which was referred to the

Committee on Commerce

A BILL

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,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Bond Price Competi5 tion Improvement Act of 1999’’.
2

•HR 1400 IH

1 SEC. 2. EXTENSION OF TRANSACTION REPORTING TO DEBT

2 SECURITIES.

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

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

5 1(d)) is amended to read as follows:

6 ‘‘(d) MINIMUM REQUIREMENTS FOR TRANSACTION

7 INFORMATION ON DEBT SECURITIES.—

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

9 shall adopt such rules and take such other actions

10 under this section as may be necessary or appro11 priate, having due regard for the public interest, the

12 protection of investors, and the maintenance of fair

13 and orderly markets to assure the prompt, accurate,

14 reliable, and fair collection, processing, distribution,

15 and publication of transaction information, including

16 last sale data, with respect to covered debt securities

17 so that such information is available to all exchange

18 members, brokers, dealers, securities information

19 processors, and all other persons. In determining the

20 rules or other actions to take under this subsection,

21 the Commission shall take into consideration, among

22 other factors, private sector systems for the collec23 tion and distribution of transaction information on

24 corporate debt securities.

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

26 in this subsection limits or otherwise alters the Com-
3

•HR 1400 IH

1 mission’s authority under the other provisions of this

2 section or any other provision of this title.

3 ‘‘(3) DEFINITIONS.—For purposes of this sub4 section:

5 ‘‘(A) COVERED DEBT SECURITIES.—The

6 term ‘covered debt securities’ means bonds, de7 bentures, or other debt instruments of an

8 issuer, other than—

9 ‘‘(i) exempted securities; and

10 ‘‘(ii) securities that the Commission

11 determines by rule to except from the re12 quirements of this subsection.

13 ‘‘(B) TRANSACTION INFORMATION.—The

14 term ‘transaction information’ means informa15 tion concerning such price, volume, and yield

16 information associated with a transaction in17 volving the purchase or sale of a covered debt

18 security as may be prescribed by the Commis19 sion by rule for purposes of this subsection.

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

21 In prescribing rules pursuant to this paragraph,

22 the Commission shall take into consideration

23 the extent to which a security is actively traded,

24 market liquidity, competition, the protection of
4

•HR 1400 IH

1 investors and the public interest, and other rel2 evant factors.’’.

3 (b) CONFORMING AMENDMENT.—Section

4 11A(a)(3)(A) of such Act is amended by striking ‘‘(which

5 shall be in addition to the National Market Advisory

6 Board established pursuant to subsection (d) of this sec7 tion)’’.

8 (c) DEADLINE FOR ACTION.—The Securities and Ex9 change Commission shall take action to implement the re10 quirements of section 11A(d) of the Securities Exchange

11 Act of 1934 (15 U.S.C. 78k–1(d)), as amended by sub12 section (a) of this section, within 12 months after the date

13 of enactment of this Act.

14 SEC. 3. TECHNICAL AMENDMENT.

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

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

17 at the end the following new clause:

18 ‘‘(ii) Notwithstanding subparagraph (A)(i) of

19 this paragraph, securities described in subpara20 graphs (B) and (C) of paragraph (42) of this sub21 section shall not be deemed to be exempted securi22 ties for purposes of section 11A of this title.’’.

23 SEC. 4. STUDIES.

24 (a) STUDIES REQUIRED.—The Comptroller General

25 shall conduct a study of measures needed in the public
5

•HR 1400 IH

1 interest and for the protection of investors to improve the

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

3 distribution, and publication of information concerning

4 transactions—

5 (1) in debt securities as to which transaction in6 formation is collected but not disseminated pursuant

7 to section 11A(d) of the Securities Exchange Act of

8 1934, as amended by this Act (15 U.S.C. 78k–1(d));

9 and

10 (2) in municipal securities (as such term is de11 fined in section 3(a)(29) of such Act (15 U.S.C.

12 78c(a)(29)).

13 (b) COMMISSION AND MSRB PARTICIPATION.—The

14 Comptroller General shall conduct the study required by

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

16 Exchange Commission, and the study required by sub17 section (a)(2) in consultation with the Securities and Ex18 change Commission and the Municipal Securities Rule19 making Board.

20 (c) SUBMISSION OF REPORTS.—The Comptroller

21 General shall submit to the Congress a report on the stud22 ies required by subsection (a) within one year after the

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

24 an identification of the measures needed to improve the

25 prompt, accurate, reliable, and fair collection, processing,
6

•HR 1400 IH

1 distribution, and publication of information concerning

2 transactions in the debt securities and municipal securities

3 described in such subsection, including measures requiring

4 legislative or regulatory action.

Æ