II 

116TH CONGRESS 

1ST SESSION S. 2306 

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

of venture exchanges, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 29, 2019 

Mr. KENNEDY introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

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) DEFINITIONS.—In this subsection: 

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

3 ‘‘(i) IN GENERAL.—The term ‘early4 stage, growth company’ means an issuer— 

5 ‘‘(I) that has not made any reg6 istered initial public offering of any 

7 securities of the issuer; and 

8 ‘‘(II) with a public float of not 

9 more than the value of public float re10 quired to qualify as a large acceler11 ated filer under section 240.12b–2 of 

12 title 17, Code of Federal Regulations, 

13 or any successor regulation. 

14 ‘‘(ii) TREATMENT WHEN PUBLIC

15 FLOAT EXCEEDS THRESHOLD.—An issuer 

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

17 company by reason of the public float of 

18 the issuer exceeding the threshold specified 

19 in clause (i)(II) until the later of— 

20 ‘‘(I) the end of the period of 24 

21 consecutive months during which the 

22 public float of the issuer exceeds 

23 $2,000,000,000 (as such amount is 

24 indexed for inflation every 5 years by 

25 the Commission to reflect the change 


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1 in the Consumer Price Index for All 

2 Urban Consumers published by the 

3 Bureau of Labor Statistics, setting 

4 the threshold to the nearest 

5 $1,000,000); and 

6 ‘‘(II) the end of the 1-year period 

7 following the end of the 24-month pe8 riod described in subclause (I), if the 

9 issuer requests the 1-year extension 

10 from a venture exchange and the ven11 ture exchange elects to provide that 

12 extension. 

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

14 issuer, the term ‘public float’ means the aggre15 gate worldwide market value of the voting and 

16 non-voting common equity of the issuer held by 

17 non-affiliates. 

18 ‘‘(C) VENTURE SECURITY.— 

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

20 security’ means— 

21 ‘‘(I) a security of an early-stage, 

22 growth company that is exempt from 

23 registration pursuant to section 3(b) 

24 of the Securities Act of 1933 (15 

25 U.S.C. 77c(b)); 


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1 ‘‘(II) a security of an emerging 

2 growth company; or 

3 ‘‘(III) a security registered under 

4 section 12(b) and listed on a venture 

5 exchange (or, prior to listing on a ven6 ture exchange, listed on a national se7 curities exchange) where— 

8 ‘‘(aa) the issuer of the secu9 rity has a public float that is not 

10 more than the value of public 

11 float required to qualify as a 

12 large accelerated filer under sec13 tion 240.12b–2 of title 17, Code 

14 of Federal Regulations, or any 

15 successor regulation; or 

16 ‘‘(bb) the average daily 

17 trade volume is not more than 

18 75,000 shares during a contin19 uous 60-day period. 

20 ‘‘(ii) TREATMENT WHEN PUBLIC

21 FLOAT EXCEEDS THRESHOLD.—A security 

22 shall not cease to be a venture security by 

23 reason of the public float of the issuer of 

24 the security exceeding the threshold speciVerDate Sep 11 2014 04:19 Aug 07, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2306.IS S2306

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1 fied in clause (i)(III)(aa) until the later 

2 of— 

3 ‘‘(I) the end of the period of 24 

4 consecutive months beginning on the 

5 date on which— 

6 ‘‘(aa) the public float of the 

7 issuer exceeds $2,000,000,000; 

8 and 

9 ‘‘(bb) the average daily 

10 trade volume of the security is 

11 not less than 100,000 shares 

12 during a continuous 60-day pe13 riod; and 

14 ‘‘(II) the end of the 1-year period 

15 following the end of the 24-month pe16 riod described in subclause (I), if the 

17 issuer of the security requests the 1- 

18 year extension from a venture ex19 change and the venture exchange 

20 elects to provide that extension. 

21 ‘‘(2) REGISTRATION.— 

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

23 (and a national securities exchange may reg24 ister a listing tier of the exchange) as a na25 tional securities exchange solely for the purpose 


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1 of trading venture securities by filing an appli2 cation with the Commission pursuant to sub3 section (a) and the rules and regulations there4 under. 

5 ‘‘(B) PUBLICATION OF NOTICE.—The 

6 Commission shall, upon the filing of an applica7 tion under subparagraph (A), publish notice of 

8 the filing and afford interested persons an op9 portunity to submit written data, views, and ar10 guments concerning the application. 

11 ‘‘(C) APPROVAL OR DENIAL.— 

12 ‘‘(i) IN GENERAL.—Not later than 90 

13 days after the date on which a notice is 

14 published under subparagraph (B), or 

15 within such longer period as to which the 

16 applicant consents, the Commission shall— 

17 ‘‘(I) by order grant the registra18 tion; or 

19 ‘‘(II) institute a denial pro20 ceeding under clause (ii) to determine 

21 whether registration should be denied. 

22 ‘‘(ii) DENIAL PROCEEDING.— 

23 ‘‘(I) IN GENERAL.—A proceeding 

24 under clause (i)(II) shall— 


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1 ‘‘(aa) include notice of the 

2 grounds for denial under consid3 eration and opportunity for hear4 ing; and 

5 ‘‘(bb) be concluded not later 

6 than 180 days after the date on 

7 which the notice is published 

8 under subparagraph (B). 

9 ‘‘(II) ORDER.—At the conclusion 

10 of a proceeding under clause (i)(II), 

11 the Commission shall by order grant 

12 or deny the registration. 

13 ‘‘(III) EXTENSION.—The Com14 mission may extend the time for con15 clusion of a proceeding under clause 

16 (i)(II) for a period of not more than 

17 90 days if the Commission— 

18 ‘‘(aa) finds good cause for 

19 the extension; and 

20 ‘‘(bb) publishes the reasons 

21 for the finding described in item 

22 (aa) or for such longer period as 

23 to which the applicant consents. 

24 ‘‘(iii) CRITERIA FOR APPROVAL OR

25 DENIAL.—The Commission shall— 


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1 ‘‘(I) grant a registration under 

2 this paragraph if the Commission 

3 finds that the requirements of this 

4 Act and the rules and regulations 

5 thereunder with respect to the appli6 cant are satisfied; and 

7 ‘‘(II) deny a registration under 

8 this paragraph if the Commission does 

9 not make the finding described in sub10 clause (I). 

11 ‘‘(3) POWERS AND RESTRICTIONS.—In addition 

12 to the powers and restrictions otherwise applicable 

13 to a national securities exchange, a venture ex14 change— 

15 ‘‘(A) may only constitute, maintain, or pro16 vide a market place or facilities for bringing to17 gether purchasers and sellers of venture securi18 ties; 

19 ‘‘(B) may not extend unlisted trading 

20 privileges to any venture security; 

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

22 a listing tier of another national securities ex23 change, allow trading in securities that are reg24 istered under section 12(b) on a national securiVerDate Sep 11 2014 04:19 Aug 07, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2306.IS S2306

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1 ties exchange other than a venture exchange; 

2 and 

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

4 under section 19(b)— 

5 ‘‘(i) determine the increment to be 

6 used for quoting and trading venture secu7 rities on the exchange; and 

8 ‘‘(ii) choose to carry out periodic auc9 tions for the sale of a venture security in10 stead of providing continuous trading of 

11 the venture security. 

12 ‘‘(4) TREATMENT OF CERTAIN EXEMPTED SE13 CURITIES.—A security that is exempt from registra14 tion pursuant to section 3(b) of the Securities Act 

15 of 1933 (15 U.S.C. 77c(b)) shall be exempt from 

16 section 12(a) of this Act to the extent the security 

17 is traded on a venture exchange, if the issuer of the 

18 security is in compliance with— 

19 ‘‘(A) all disclosure obligations of such sec20 tion 3(b) and the regulations issued under such 

21 section; and 

22 ‘‘(B) ongoing disclosure obligations of the 

23 applicable venture exchange that are similar to 

24 those provided by an issuer under tier 2, as de25 scribed in sections 230.251 through 230.263 of 


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1 title 17, Code of Federal Regulations, or any 

2 successor regulation. 

3 ‘‘(5) VENTURE SECURITIES TRADED ON VEN4 TURE EXCHANGES MAY NOT TRADE ON NON-VEN5 TURE EXCHANGES.—A venture security may not be 

6 traded on a national securities exchange that is not 

7 a venture exchange during any period in which the 

8 venture security is being traded on a venture ex9 change. 

10 ‘‘(6) COMMISSION AUTHORITY TO LIMIT CER11 TAIN TRADING.—The Commission may limit trans12 actions in venture securities that are not effected on 

13 a national securities exchange as appropriate to pro14 mote efficiency, competition, capital formation, and 

15 to protect investors. 

16 ‘‘(7) DISCLOSURES TO INVESTORS.—The Com17 mission shall issue regulations to ensure that per18 sons selling or purchasing venture securities on a 

19 venture exchange are provided disclosures sufficient 

20 to understand— 

21 ‘‘(A) the characteristics unique to venture 

22 securities; and 

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

24 that is a listing tier of another national securi25 ties exchange, that the venture exchange is disVerDate Sep 11 2014 04:19 Aug 07, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2306.IS S2306

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1 tinct from the other national securities ex2 change. 

3 ‘‘(8) RULE OF CONSTRUCTION.—Nothing in 

4 this subsection may be construed as requiring trans5 actions in venture securities to be effected on a na6 tional securities exchange.’’. 

7 (b) SECURITIES ACT OF 1933.—Section 18 of the Se8 curities Act of 1933 (15 U.S.C. 77r) is amended— 

9 (1) by redesignating subsection (d) as sub10 section (e); and 

11 (2) by inserting after subsection (c) the fol12 lowing: 

13 ‘‘(d) TREATMENT OF SECURITIES LISTED ON A VEN14 TURE EXCHANGE.—Notwithstanding subsection (b), a se15 curity is not a covered security pursuant to subsection 

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

17 listing, on a venture exchange, as defined in section 6(m) 

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

19 78f(m)).’’. 

20 (c) SENSE OF CONGRESS.—It is the sense of the Con21 gress that the Securities and Exchange Commission 

22 should— 

23 (1) when necessary or appropriate in the public 

24 interest and consistent with the protection of inves25 tors, make use of the general exemptive authority of 


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1 the Commission under section 36 of the Securities 

2 Exchange Act of 1934 (15 U.S.C. 78mm) with re3 spect to the provisions added by the amendments 

4 made by this section; and 

5 (2) if the Commission determines appropriate, 

6 create an Office of Venture Exchanges within the 

7 Division of Trading and Markets of the Commission. 

8 (d) RULE OF CONSTRUCTION.—Nothing in this sec9 tion or the amendments made by this section shall be con10 strued to impair or limit the construction of the anti-fraud 

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

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

13 78c(a)), or the authority of the Securities and Exchange 

14 Commission under those provisions. 

15 (e) EFFECTIVE DATE FOR TIERS OF EXISTING NA16 TIONAL SECURITIES EXCHANGES.—In the case of a secu17 rities exchange that is registered as a national securities 

18 exchange under section 6 of the Securities Exchange Act 

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

20 Act, any election for a listing tier of that exchange to be 

21 treated as a venture exchange under subsection (m) of 

22 such section shall not take effect before the date that is 

23 180 days after such date of enactment. 

Æ 


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