II 

116TH CONGRESS 

1ST SESSION S. 2488 

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. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 17, 2019 

Mr. VAN HOLLEN 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 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, 

3 SECTION 1. SHORT TITLE. 

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

5 of 2019’’. 


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•S 2488 IS

1 SEC. 2. PROHIBITION ON CERTAIN TRADING IN ANTICIPA2 TION OF A CURRENT REPORT. 

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

4 et seq.) is amended by inserting after section 10D (15 

5 U.S.C. 78j–4) the following: 

6 ‘‘SEC. 10E. PROHIBITION ON CERTAIN TRADING IN ANTICI7 PATION OF A CURRENT REPORT. 

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

9 date of enactment of this section, the Commission shall 

10 issue rules that require each issuer that is subject to re11 porting requirements under section 13(a) or 15(d) to es12 tablish and maintain policies, controls, and procedures 

13 that are reasonably designed to prohibit executive officers 

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

15 otherwise transferring any equity security of the issuer, 

16 directly or indirectly— 

17 ‘‘(1) subject to subsection (b)(3)(C), with re18 spect to an event described in any of sections 1 

19 through 6 of Form 8–K, during the period beginning 

20 on the date on which the event occurs and ending 

21 on the date on which the issuer files or furnishes a 

22 current report on Form 8–K with respect to the 

23 event; and 

24 ‘‘(2) with respect to an event described in sec25 tion 7 or 8 of Form 8–K, during the period begin26 ning on the date on which the issuer determines that 


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1 the issuer will disclose the event and ending on the 

2 date on which the issuer files or furnishes a current 

3 report on Form 8–K with respect to the event. 

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

5 under subsection (a), the Commission— 

6 ‘‘(1) may exempt from those rules certain 

7 transactions as the Commission determines to be ap8 propriate, including those transactions that— 

9 ‘‘(A) occur automatically; 

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

11 election; or 

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

13 involve a purchase or sale of equity securities 

14 that satisfies the conditions under section 

15 240.10b5–1(c) of title 17, Code of Federal Reg16 ulations, or any successor regulation; 

17 ‘‘(2) may not exempt from those rules a trans18 action made by an executive officer or director of an 

19 issuer under a plan that— 

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

21 1(c)(1)(i)(A)(3) of title 17, Code of Federal 

22 Regulations, or any successor regulation; and 

23 ‘‘(B) was adopted— 

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

25 in sections 1 through 6 of Form 8–K, durVerDate Sep 11 2014 18:22 Sep 19, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2488.IS S2488

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1 ing the period beginning on the date on 

2 which the event occurred and ending on 

3 the date on which the issuer files or fur4 nishes a current report on Form 8–K with 

5 respect to the event; and 

6 ‘‘(ii) with respect to an event de7 scribed in section 7 or 8 of Form 8–K, 

8 during the period beginning on the date on 

9 which the issuer determines that the issuer 

10 will disclose the event and ending on the 

11 date on which the issuer files or furnishes 

12 a current report on Form 8–K with respect 

13 to the event; and 

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

15 ‘‘(A) issuers that are required to adopt and 

16 administer a code of ethics under section 

17 270.17j–1 of title 17, Code of Federal Regula18 tions, or any successor regulation; 

19 ‘‘(B) any other issuer that is registered 

20 under the Investment Company Act of 1940 

21 (15 U.S.C. 80a–1 et seq.) and the investment 

22 advisers of which are required to adopt and ad23 minister a code of ethics under section 

24 275.204A–1 of title 17, Code of Federal Regu25 lations, or any successor regulation; and 


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1 ‘‘(C) any event— 

2 ‘‘(i) that is described in any of sec3 tions 1 through 6 of Form 8–K; and 

4 ‘‘(ii) with respect to which the issuer 

5 has announced the event in a press release 

6 or other method of dissemination that com7 plies with the method of public disclosure 

8 described in section 243.101(e)(2) of title 

9 17, Code of Federal Regulations, or any 

10 successor regulation. 

11 ‘‘(c) RULE OF CONSTRUCTION.—Any reference in 

12 this section to a section of Form 8–K shall be construed 

13 to refer to that section of Form 8–K as in effect on the 

14 date of enactment of this section.’’. 

Æ 


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