I 

115TH CONGRESS 

2D SESSION H. R. 5877 

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

of venture exchanges, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 18, 2018 

Mr. EMMER introduced the following bill; which was referred to the Committee 

on Financial Services 

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) REGISTRATION.— 

2 ‘‘(A) IN GENERAL.—A national securities 

3 exchange may elect to be treated (or for a list4 ing tier of such exchange to be treated) as a 

5 venture exchange— 

6 ‘‘(i) by notifying the Commission of 

7 such election at the time the exchange ap8 plies to be registered as a national securi9 ties exchange; or 

10 ‘‘(ii) after registering as a national se11 curities exchange, by submitting such elec12 tion as a proposed rule change, as de13 scribed under section 19(b). 

14 ‘‘(B) DETERMINATION TIME PERIOD.— 

15 With respect to a securities exchange electing to 

16 be treated (or for a listing tier of such exchange 

17 to be treated) as a venture exchange— 

18 ‘‘(i) at the time the exchange applies 

19 to be registered as a national securities ex20 change, such application and election shall 

21 be deemed to have been approved by the 

22 Commission unless the Commission denies 

23 such application before the end of the 6- 

24 month period beginning on the date the 

25 Commission received such application; and 


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1 ‘‘(ii) after registering as a national se2 curities exchange, such election shall be 

3 deemed to have been approved by the Com4 mission unless the Commission denies such 

5 approval before the end of the 6-month pe6 riod beginning on the date the Commission 

7 received notification of such election. 

8 ‘‘(2) POWERS AND RESTRICTIONS.—A venture 

9 exchange— 

10 ‘‘(A) may only constitute, maintain, or pro11 vide a market place or facilities for bringing to12 gether purchasers and sellers of venture securi13 ties; 

14 ‘‘(B) may determine the increment to be 

15 used for quoting and trading venture securities 

16 on the exchange; 

17 ‘‘(C) may choose to carry out periodic auc18 tions for the sale of a venture security instead 

19 of providing continuous trading of the venture 

20 security; and 

21 ‘‘(D) may not extend unlisted trading 

22 privileges to any venture security. 

23 ‘‘(3) TREATMENT OF CERTAIN EXEMPTED SE24 CURITIES.—A security that is exempt from registra25 tion pursuant to section 3(b) of the Securities Act 


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1 of 1933 shall be exempt from section 12(a) of this 

2 title to the extent such securities are traded on a 

3 venture exchange, if the issuer of such security is in 

4 compliance with all disclosure obligations of such 

5 section 3(b) and the regulations issued under such 

6 section. 

7 ‘‘(4) VENTURE SECURITIES TRADED ON VEN8 TURE EXCHANGES MAY NOT TRADE ON NON-VEN9 TURE EXCHANGES.—A venture security may not be 

10 traded on a national securities exchange that is not 

11 a venture exchange during any period in which the 

12 venture security is being traded on a venture ex13 change. 

14 ‘‘(5) RULE OF CONSTRUCTION.—Nothing in 

15 this subsection may be construed as requiring trans16 actions in venture securities to be effected on a na17 tional securities exchange. 

18 ‘‘(6) DEFINITIONS.—For purposes of this sub19 section: 

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

21 ‘‘(i) IN GENERAL.—The term ‘early22 stage, growth company’ means an issuer— 

23 ‘‘(I) that has not made any reg24 istered initial public offering of any 

25 securities of the issuer; and 


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1 ‘‘(II) with a public float of less 

2 than or equal to the value of public 

3 float required to qualify as a large ac4 celerated filer under section 240.12b– 

5 2 of title 17, Code of Federal Regula6 tions. 

7 ‘‘(ii) TREATMENT WHEN PUBLIC

8 FLOAT EXCEEDS THRESHOLD.—An issuer 

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

10 company by reason of the public float of 

11 such issuer exceeding the threshold speci12 fied in clause (i)(II) until the later of the 

13 following: 

14 ‘‘(I) The end of the period of 24 

15 consecutive months during which the 

16 public float of the issuer exceeds 

17 $2,000,000,000 (as such amount is 

18 indexed for inflation every 5 years by 

19 the Commission to reflect the change 

20 in the Consumer Price Index for All 

21 Urban Consumers published by the 

22 Bureau of Labor Statistics, setting 

23 the threshold to the nearest 

24 $1,000,000). 


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1 ‘‘(II) The end of the 1-year pe2 riod following the end of the 24- 

3 month period described under sub4 clause (I), if the issuer requests such 

5 1-year extension from a venture ex6 change and the venture exchange 

7 elects to provide such extension. 

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

9 issuer, the term ‘public float’ means the aggre10 gate worldwide market value of the voting and 

11 non-voting common equity of the issuer held by 

12 non-affiliates. 

13 ‘‘(C) VENTURE SECURITY.— 

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

15 security’ means— 

16 ‘‘(I) securities of an early-stage, 

17 growth company that are exempt from 

18 registration pursuant to section 3(b) 

19 of the Securities Act of 1933; 

20 ‘‘(II) securities of an emerging 

21 growth company; or 

22 ‘‘(III) securities registered under 

23 section 12(b) and listed on a venture 

24 exchange (or, prior to listing on a venVerDate Sep 11 2014 23:04 May 31, 2018 Jkt 079200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5877.IH H5877

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1 ture exchange, listed on a national se2 curities exchange) where— 

3 ‘‘(aa) the issuer of such se4 curities has a public float less 

5 than or equal to the value of pub6 lic float required to qualify as a 

7 large accelerated filer under sec8 tion 240.12b–2 of title 17, Code 

9 of Federal Regulations; or 

10 ‘‘(bb) the average daily 

11 trade volume is 75,000 shares or 

12 less during a continuous 60-day 

13 period. 

14 ‘‘(ii) TREATMENT WHEN PUBLIC

15 FLOAT EXCEEDS THRESHOLD.—Securities 

16 shall not cease to be venture securities by 

17 reason of the public float of the issuer of 

18 such securities exceeding the threshold 

19 specified in clause (i)(III)(aa) until the 

20 later of the following: 

21 ‘‘(I) The end of the period of 24 

22 consecutive months beginning on the 

23 date— 


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1 ‘‘(aa) the public float of 

2 such issuer exceeds 

3 $2,000,000,000; and 

4 ‘‘(bb) the average daily 

5 trade volume of such securities is 

6 100,000 shares or more during a 

7 continuous 60-day period. 

8 ‘‘(II) The end of the 1-year pe9 riod following the end of the 24- 

10 month period described under sub11 clause (I), if the issuer of such securi12 ties requests such 1-year extension 

13 from a venture exchange and the ven14 ture exchange elects to provide such 

15 extension.’’. 

16 (b) SECURITIES ACT OF 1933.—Section 18(b)(1) of 

17 the Securities Act of 1933 (15 U.S.C. 77r(b)(1)) is 

18 amended— 

19 (1) in subparagraph (B), by striking ‘‘or’’ at 

20 the end; 

21 (2) in subparagraph (C), by striking the period 

22 and inserting ‘‘; or’’; and 

23 (3) by adding at the end the following: 

24 ‘‘(D) a venture security listed on a venture 

25 exchange, other than those of an early-stage 


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1 growth company (as such terms are defined, re2 spectively, under section 6(m) of the Securities 

3 Exchange Act of 1934).’’. 

4 (c) SENSE OF CONGRESS.—It is the sense of the Con5 gress that the Securities and Exchange Commission 

6 should— 

7 (1) when necessary or appropriate in the public 

8 interest and consistent with the protection of inves9 tors, make use of the Commission’s general exemp10 tive authority under section 36 of the Securities Ex11 change Act of 1934 (15 U.S.C. 78mm) with respect 

12 to the provisions added by this section; and 

13 (2) if the Commission determines appropriate, 

14 create an Office of Venture Exchanges within the 

15 Commission’s Division of Trading and Markets. 

16 (d) RULE OF CONSTRUCTION.—Nothing in this sec17 tion or the amendments made by this section shall be con18 strued to impair or limit the construction of the antifraud 

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

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

21 78c(a))) or the authority of the Securities and Exchange 

22 Commission under those provisions. 

23 (e) EFFECTIVE DATE FOR TIERS OF EXISTING NA24 TIONAL SECURITIES EXCHANGES.—In the case of a secu25 rities exchange that is registered as a national securities 


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1 exchange under section 6 of the Securities Exchange Act 

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

3 this Act, any election for a listing tier of such exchange 

4 to be treated as a venture exchange under subsection (m) 

5 of such section shall not take effect before the date that 

6 is 180 days after such date of enactment. 

Æ 


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