Enhancing Multi-Class Share Disclosures Act

Subjects: Finance and Financial Sector, Consumer affairs, Corporate finance and management, Financial services and investments, Securities

Summary:  <p><b>Enhancing Multi-Class Share Disclosures Act </b></p> <p>This bill requires issuers of securities with multi-class share structures to disclose certain information in any proxy solicitation or consent solicitation material. A multi-class share structure occurs when a company issues two or more classes of shares that have different voting rights. For example, a company may issue one class of shares with no or few voting rights for the public, and another class with more voting rights for company founders and executives. </p> <p>Under the bill, the issuer must disclose certain information about each director, director nominee, named executive officer, and each beneficial owner of securities with 5% or more of the total combined voting power of all classes of securities entitled to vote in the election of directors. Specifically, the issuer must disclose (1) the number of shares of all classes of securities entitled to vote in the election of directors beneficially owned by such person, and (2) the amount of voting power held by such person.</p> </p>

<html><body><pre>[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2795 Introduced in House (IH)]

&lt;DOC&gt;






118th CONGRESS
  1st Session
                                H. R. 2795

To amend the Securities Exchange Act of 1934 to require issuers with a 
multi-class stock structure to make certain disclosures in any proxy or 
         consent solicitation material, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 24, 2023

  Mr. Meeks introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
To amend the Securities Exchange Act of 1934 to require issuers with a 
multi-class stock structure to make certain disclosures in any proxy or 
         consent solicitation material, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Enhancing Multi-Class Share 
Disclosures Act''.

SEC. 2. DISCLOSURE RELATING TO MULTI-CLASS SHARE STRUCTURES.

    Section 14 of the Securities Exchange Act of 1934 (15 U.S.C. 78n) 
is amended by adding at the end the following:
    ``(l) Disclosure for Issuers With Multi-Class Share Structures.--
            ``(1) Disclosure.--The Commission shall, by rule, require 
        each issuer with a multi-class share structure to disclose the 
        information described in paragraph (2) in any proxy or consent 
        solicitation material for an annual meeting of the shareholders 
        of the issuer, or any other filing as the Commission determines 
        appropriate.
            ``(2) Content.--A disclosure made under paragraph (1) shall 
        include, with respect to each person who is a director, 
        director nominee, or named executive officer of the issuer, or 
        who is the beneficial owner of securities with 5 percent or 
        more of the total combined voting power of all classes of 
        securities entitled to vote in the election of directors--
                    ``(A) the number of shares of all classes of 
                securities entitled to vote in the election of 
                directors beneficially owned by such person, expressed 
                as a percentage of the total number of the outstanding 
                securities of the issuer entitled to vote in the 
                election of directors; and
                    ``(B) the amount of voting power held by such 
                person, expressed as a percentage of the total combined 
                voting power of all classes of the securities of the 
                issuer entitled to vote in the election of directors.
            ``(3) Multi-class share structure.--In this subsection, the 
        term `multi-class share structure' means a capitalization 
        structure that contains 2 or more classes of securities that 
        have differing amounts of voting rights in the election of 
        directors.''.
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