quoted without regard to the minimum in-
crements established under this paragraph. 
‘‘(II) AT IPO.—If a covered emerging 
growth company makes an initial public of-
fering after the day described in subclause 
(I) and the first share of the securities of 
such company is offered to the public at a 
price below $1, the securities of such com-
pany shall be quoted using the increment 
at which such securities would be quoted 
without regard to the minimum increments 
established under this paragraph. 
‘‘(ii) AVERAGE TRADING PRICE.—If the av-
erage trading price of the securities of a cov-
ered emerging growth company falls below $1 
for any 90-day period beginning on or after the 
day before the date of the enactment of the 
Small Cap Liquidity Reform Act of 2014, the 
securities of such company shall, after the end 
of such period, be quoted using the increment 
at which such securities would be quoted with-
out regard to the minimum increments estab-
lished under this paragraph. 
‘‘(G) FRAUD OR MANIPULATION.—If the Com-
mission determines that a covered emerging growth
company has violated any provision of the securities 
laws prohibiting fraudulent, manipulative, or decep-
tive acts or practices, the securities of such company 
shall, after the date of the determination, be quoted 
using the increment at which such securities would 
be quoted without regard to the minimum incre-
ments established under this paragraph. 
‘‘(H) INELIGIBILITY FOR INCREASED MINIMUM 
INCREMENT
PERMANENT.—The securities of an 
issuer may not be quoted at a minimum increment 
of $0.05 or $0.10 under this paragraph at any time 
after— 
‘‘(i) such issuer makes an election under 
subparagraph (A)(ii)(II); 
‘‘(ii) such issuer makes an election under 
subparagraph (C)(i)(I), except during the pe-
riod before such election takes effect; or 
‘‘(iii) the securities of such issuer are re-
quired by this paragraph to be quoted using the 
increment at which such securities would be 
quoted without regard to the minimum incre-
ments established under this paragraph. 
‘‘(I) 
ADDITIONAL
REPORTS
AND
DISCLO-
SURES.—The Commission shall require a covered 
emerging growth company the securities of which
are quoted at a minimum increment of $0.05 or 
$0.10 under this paragraph to make such reports 
and disclosures as the Commission considers nec-
essary or appropriate in the public interest or for 
the protection of investors. 
‘‘(J) LIMITATION OF LIABILITY.—An issuer (or 
any officer, director, manager, or other agent of 
such issuer) shall not be liable to any person (other 
than such issuer) under any law or regulation of the 
United States, any constitution, law, or regulation of 
any State or political subdivision thereof, or any con-
tract or other legally enforceable agreement (includ-
ing any arbitration agreement) for any losses caused 
solely by the quoting of the securities of such issuer 
at a minimum increment of $0.05 or $0.10, by the 
trading of such securities at the increment deter-
mined by the Commission under subparagraph (B), 
or by both such quoting and trading, as provided in 
this paragraph. 
‘‘(K) REPORT TO CONGRESS.—Not later than 6 
months after the date of the enactment of the Small 
Cap Liquidity Reform Act of 2014, and every 6 
months thereafter, the Commission, in coordination 
with each exchange on which the securities of cov-
ered emerging growth companies are quoted or trad-
ed, shall submit to Congress a report on the quoting 
and trading of securities in increments permitted by 
this paragraph and the extent to which such quoting 
and trading are increasing liquidity and active trad-
ing by incentivizing capital commitment, research 
coverage, and brokerage support, together with any 
legislative recommendations the Commission may 
have. 
‘‘(L) DEFINITIONS.—In this paragraph: 
‘‘(i) COVERED
EMERGING
GROWTH
COM-
PANY.—The term ‘covered emerging growth 
company’ means an emerging growth company, 
as defined in the first paragraph (80) of section 
3(a), except that— 
‘‘(I) such paragraph shall be applied 
by 
substituting 
‘$750,000,000’ 
for 
‘$1,000,000,000’ each place it appears; 
and 
‘‘(II) subparagraphs (B), (C), and (D) 
of such paragraph do not apply. 
‘‘(ii) 
SECURITY.—The 
term 
‘security’ 
means an equity security. 
‘‘(M) SAVINGS
PROVISION.—Notwithstanding 
any other provision of this paragraph, the Commis-
sion may—
‘‘(i) make such adjustments to the pilot 
program specified in this paragraph as the 
Commission considers necessary or appropriate 
to ensure that such program can provide statis-
tically meaningful or reliable results, including 
adjustments to eliminate selection bias among 
participants, expand the number of participants 
eligible to participate in such program, and 
change the duration of such program for one or 
more participants; and 
‘‘(ii) conduct any other study or pilot pro-
gram, in conjunction with or separate from the 
pilot program specified in this paragraph (as 
such program may be adjusted pursuant to 
clause (i)), to evaluate quoting or trading in 
various minimum increments.’’. 
(b) SUNSET.—Effective on the date that is 5 years 
after the date of the enactment of this Act, section 
11A(c)(6) of the Securities Exchange Act of 1934 (15 
U.S.C. 78k–1(c)(6)) is repealed. 
Passed the House of Representatives February 11, 
2014. 
Attest: 
Clerk.