datamatters24/research-document-archive huggingface dataset:
‘‘(9) The rules of the exchange prohibit the list-
ing of any security issued in a limited partnership
rollup transaction (as such term is defined in para-
graphs (4) and (5) of section 14(h)), unless such
transaction was conducted in accordance with proce-
dures designed to protect the rights of limited part-
ners, including—
‘‘(A) the right of dissenting limited part-
ners to the following: (i) an appraisal and com-
pensation, or (ii) if the exchange finds that
granting the rights under clause (i) of this sub-
paragraph would be infeasible or not in the fi-
nancial interest of the dissenting limited part-
ners, other rights designed to protect dissenting
limited partners;
‘‘(B) the right not to have their voting
power unfairly reduced or abridged;
‘‘(C) the right not to bear an unfair por-
tion of the costs of a proposed rollup trans-
action that is rejected; and
‘‘(D) restrictions on the conversion of con-
tingent interests or fees into non-contingent in-
terests or fees and restrictions on the receipt of
a non-contingent equity interest in exchange for
fees for services which have not yet been pro-
vided.
As used in this paragraph, the term ‘dissenting lim-
ited partner’ means a holder of a beneficial interest
in a limited partnership that is the subject of a lim-
ited partnership transaction who casts a vote against
the transaction and complies with procedures estab-
lished by the exchange, except that for purposes of
an exchange or tender offer, such term means any
person who files an objection in writing under the
rules of the exchange during the period in which the
offer is outstanding.’’.
(c) STANDARDS FOR AUTOMATED QUOTATION SYS-
TEMS.—Section 15A(b) of the Securities Exchange Act of
1934 (15 U.S.C. 78o-3(b)) is amended by adding at the
end the following new paragraph:
‘‘(13) The rules of the association prohibit the
authorization for quotation on an automated
interdealer quotation system sponsored by the asso-
ciation of any security designated by the Commis-
sion as a national market system security resulting
from a limited partnership rollup transaction (as
such term is defined in paragraphs (4) and (5) of
section 14(h)), unless such transaction was con-
ducted in accordance with procedures designed to
protect the rights of limited partners, including—
‘‘(A) the right of dissenting limited part-
ners to the following: (i) an appraisal and com-
pensation, or (ii) if the association finds that
granting the rights under clause (i) of this sub-
paragraph would be infeasible or not in the fi-
nancial interest of the dissenting limited part-
ners, other rights designed to protect dissenting
limited partners;
‘‘(B) the right not to have their voting
power unfairly reduced or abridged;
‘‘(C) the right not to bear an unfair por-
tion of the costs of a proposed rollup trans-
action that is rejected; and
‘‘(D) restrictions on the conversion of con-
tingent interests or fees into non-contingent in-
terests or fees and restrictions on the receipt of
a non-contingent equity interest in exchange for
fees for services which have not yet been pro-
vided.
As used in this paragraph, the term ‘dissenting lim-
ited partner’ means a holder of a beneficial interest
in a limited partnership that is the subject of a lim-
ited partnership transaction who casts a vote against
the transaction and complies with procedures estab-
lished by the association, except that for purposes of
an exchange or tender offer such term means any
person who files an objection in writing under the
rules of the association during the period during
which the offer is outstanding.’’.
(d) EFFECT ON EXISTING AUTHORITY.—The amend-
ments made by this section shall not limit the authority
of the Securities and Exchange Commission, a registered
securities association, or a national securities exchange
under any provision of the Securities Exchange Act of
1934, or preclude the Commission or such association or
exchange from imposing, under any other such provision,
a remedy or procedure required to be imposed under such
amendments.
(e) EFFECTIVE DATE.—The amendments made by
this section shall become effective 18 months after the
date of enactment of this Act and shall apply to any secu-
rity resulting from a partnership rollup transaction (as
such term is defined in section 14(h)(4) of the Securities
Exchange Act of 1934) that is issued on or after the date
of enactment of this Act.
Æ
HR 617 IH——2
IIA
103D CONGRESS
1ST SESSION
H. R. 617
IN THE SENATE OF THE UNITED STATES
MARCH 3, 1993
Received; read twice and referred to the Committee on Banking, Housing, and
Urban Affairs
AN ACT
To amend the Securities Exchange Act of 1934 to protect
investors in limited partnerships in rollup transactions,
and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Limited Partnership
Rollup Reform Act of 1993’’.
SEC. 2. REVISION OF PROXY SOLICITATION RULES WITH
RESPECT TO LIMITED PARTNERSHIP ROLLUP
TRANSACTIONS.
(a) AMENDMENT.—Section 14 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78n) is amended by adding
at the end the following new subsection:
‘‘(h) PROXY SOLICITATIONS AND TENDER OFFERS
IN CONNECTION WITH LIMITED PARTNERSHIP ROLLUP
TRANSACTIONS.—
‘‘(1) PROXY RULES TO CONTAIN SPECIAL PRO-
VISIONS.—It shall be unlawful for any person to so-
licit any proxy, consent, or authorization concerning
a limited partnership rollup transaction, or to make
any tender offer in furtherance of a limited partner-
ship rollup transaction, unless such transaction is
conducted in accordance with rules prescribed by the
Commission under subsections (a) and (d) as re-
quired by this subsection. Such rules shall—
‘‘(A) permit any holder of a security that
is the subject of the proposed limited partner-
ship rollup transaction to engage in preliminary
communications for the purposes of determining
whether to solicit proxies, consents, or author-
izations in opposition to the proposed trans-
action, without regard to whether any such
communication would otherwise be considered a
solicitation of proxies, and without being re-
quired to file soliciting material with the Com-
mission prior to making that determination, ex-
cept that nothing in this subparagraph shall be
construed to limit the application of any provi-
sion of this title prohibiting, or reasonably de-
signed to prevent, fraudulent, deceptive, or ma-
nipulative acts or practices under this title;
‘‘(B) require the issuer to provide to hold-
ers of the securities that are the subject of the
transaction such list of the holders of the issu-
er’s securities as the Commission may deter-
mine in such form and subject to such terms
and conditions as the Commission may specify;
‘‘(C) prohibit compensating any person so-
liciting proxies, consents, or authorizations di-
rectly from security holders concerning such a
transaction—
‘‘(i) on the basis of whether the solic-
ited proxies, consents, or authorizations ei-
ther approve or disapprove the proposed
transaction; or
‘‘(ii) contingent on the transaction’s
approval, disapproval, or completion;
‘‘(D) the right not to bear an unfair por-
tion of the costs of a proposed rollup trans-
action that is rejected; and
‘‘(E) restrictions on the conversion of con-
tingent interests or fees into non-contingent in-
terests or fees and restrictions on the receipt of
a non-contingent equity interest in exchange for
fees for services which have not yet been pro-
vided.
As used in this paragraph, the term ‘dissenting lim-
ited partner’ means a holder of a beneficial interest
in a limited partnership that is the subject of a lim-
ited partnership rollup transaction who casts a vote
against the transaction and complies with proce-
dures established by the association, except that for
purposes of an exchange or tender offer, such term
means any person who files an objection in writing
under the rules of the association during the period
in which the offer is outstanding and complies with
such other procedures established by the associa-
tion.’’.
(b) LISTING STANDARDS OF NATIONAL SECURITIES
EXCHANGES.—Section 6(b) of the Securities Exchange
Act of 1934 (15 U.S.C. 78f(b)) is amended by adding at
the end the following:
‘‘(9) The rules of the exchange prohibit the list-
ing of any security issued in a limited partnership
rollup transaction (as such term is defined in para-
graphs (4) and (5) of section 14(h)), unless such
transaction was conducted in accordance with proce-
dures designed to protect the rights of limited part-
ners, including—
‘‘(A) the right of dissenting limited part-
ners to the following: (i) an appraisal and com-
pensation, or (ii) if the exchange finds that
granting the rights under clause (i) of this sub-
paragraph would be infeasible or not in the fi-
nancial interest of the dissenting limited part-
ners, other comparable rights designed to pro-
tect dissenting limited partners, which may in-
clude the rights set forth in subparagraph (B);
‘‘(B) when the exchange determines it to
be necessary to the protection of such rights,
the use of a committee that is independent, as
determined in accordance with rules prescribed
by the exchange, of the general partner or spon-
sor and that would have the authority to pro-
tect the interest of limited partners, including
(but not limited to) the authority (but not the
obligation) to hire independent advisors to rep-
resent all limited partners at the partnership’s
expense, to negotiate the proposed transaction
with the general partner or sponsor on behalf of
the limited partners, and to make a rec-
ommendation to the limited partners with re-
spect to the proposed transaction, but not the
authority to provide consents or authorizations
to the proposed transaction on behalf of limited
partners;
‘‘(C) the right not to have their voting
power unfairly reduced or abridged;
‘‘(D) the right not to bear an unfair por-
tion of the costs of a proposed rollup trans-
action that is rejected; and
‘‘(E) restrictions on the conversion of con-
tingent interests or fees into non-contingent in-
terests or fees and restrictions on the receipt of
a non-contingent equity interest in exchange for
fees for services which have not yet been pro-
vided.
As used in this paragraph, the term ‘dissenting lim-
ited partner’ means a holder of a beneficial interest
in a limited partnership that is the subject of a lim-
ited partnership transaction who casts a vote against
the transaction and complies with procedures estab-
lished by the exchange, except that for purposes of
an exchange or tender offer, such term means any
person who files an objection in writing under the
rules of the exchange during the period in which the
offer is outstanding.’’.
(c) STANDARDS FOR AUTOMATED QUOTATION SYS-
TEMS.—Section 15A(b) of the Securities Exchange Act of
1934 (15 U.S.C. 78o–3(b)) is amended by adding at the
end the following new paragraph:
‘‘(13) The rules of the association prohibit the
authorization for quotation on an automated
interdealer quotation system sponsored by the asso-
ciation of any security designated by the Commis-
sion as a national market system security resulting
from a limited partnership rollup transaction (as
such term is defined in paragraphs (4) and (5) of
section 14(h)), unless such transaction was con-
ducted in accordance with procedures designed to
protect the rights of limited partners, including—
‘‘(A) the right of dissenting limited part-
ners to the following: (i) an appraisal and com-
pensation, or (ii) if the association finds that
granting the rights under clause (i) of this sub-
paragraph would be infeasible or not in the fi-
nancial interest of the dissenting limited part-
tions in opposition to the proposed transaction,
without regard to whether any such communica-
tion would otherwise be considered a solicitation
of proxies, and without being required to file so-
liciting material with the Commission prior to
making that determination, except that nothing
in this subparagraph shall be construed to limit
the application of any provision of this title pro-
hibiting, or reasonably designed to prevent,
fraudulent, deceptive, or manipulative acts or
practices under this title;
‘‘(B) require the issuer to provide to holders
of the securities that are the subject of the trans-
action such list of the holders of the issuer’s secu-
rities as the Commission may determine in such
form and subject to such terms and conditions as
the Commission may specify;
‘‘(C) prohibit compensating any person so-
liciting proxies, consents, or authorizations di-
rectly from security holders concerning such a
transaction—
‘‘(i) on the basis of whether the solic-
ited proxies, consents, or authorizations ei-
ther approve or disapprove the proposed
transaction; or
transaction was conducted in accordance with proce-
dures designed to protect the rights of limited part-
ners, including—
‘‘(A) the right of dissenting limited partners
to the following: (i) an appraisal and compensa-
tion, or (ii) if the exchange finds that granting
the rights under clause (i) of this subparagraph
would be infeasible or not in the financial inter-
est of the dissenting limited partners, other com-
parable rights designed to protect dissenting lim-
ited partners, which may include the rights set
forth in subparagraph (B);
‘‘(B) when the exchange determines it to be
necessary to the protection of such rights, the use
of a committee that is independent, as deter-
mined in accordance with rules prescribed by the
exchange, of the general partner or sponsor and
that would have the authority to protect the in-
terest of limited partners, including (but not
limited to) the authority (but not the obligation)
to hire independent advisors to represent all lim-
ited partners at the partnership’s expense, to ne-
gotiate the proposed transaction with the general
partner or sponsor on behalf of the limited part-
ners, and to make a recommendation to the lim-
ited partners with respect to the proposed trans-
action, but not the authority to provide consents
or authorizations to the proposed transaction on
behalf of limited partners;
‘‘(C) the right not to have their voting
power unfairly reduced or abridged;
‘‘(D) the right not to bear an unfair portion
of the costs of a proposed rollup transaction that
is rejected; and
‘‘(E) restrictions on the conversion of con-
tingent interests or fees into non-contingent in-
terests or fees and restrictions on the receipt of
a non-contingent equity interest in exchange for
fees for services which have not yet been pro-
vided.
As used in this paragraph, the term ‘dissenting lim-
ited partner’ means a holder of a beneficial interest
in a limited partnership that is the subject of a lim-
ited partnership transaction who casts a vote against
the transaction and complies with procedures estab-
lished by the exchange, except that for purposes of an
exchange or tender offer, such term means any person
who files an objection in writing under the rules of
the exchange during the period in which the offer is
outstanding.’’.
(c) STANDARDS FOR AUTOMATED QUOTATION SYS-
TEMS.—Section 15A(b) of the Securities Exchange Act of
1934 (15 U.S.C. 78o–3(b)) is amended by adding at the
end the following new paragraph:
‘‘(13) The rules of the association prohibit the
authorization 
for 
quotation 
on 
an 
automated
interdealer quotation system sponsored by the associa-
tion of any security designated by the Commission as
a national market system security resulting from a
limited partnership rollup transaction (as such term
is defined in paragraphs (4) and (5) of section 14(h)),
unless such transaction was conducted in accordance
with procedures designed to protect the rights of lim-
ited partners, including—
‘‘(A) the right of dissenting limited partners
to the following: (i) an appraisal and compensa-
tion, or (ii) if the association finds that granting
the rights under clause (i) of this subparagraph
would be infeasible or not in the financial inter-
est of the dissenting limited partners, other com-
parable rights designed to protect dissenting lim-
ited partners, which may include the rights set
forth in subparagraph (B);
‘‘(B) when the association determines it to
be necessary to the protection of such rights, the
use of a committee that is independent, as deter-
mined in accordance with rules prescribed by the
association, of the general partner or sponsor
and that would have the authority to protect the
interest of limited partners, including (but not
limited to) the authority (but not the obligation)
to hire independent advisors to represent all lim-
ited partners at the partnership’s expense, to ne-
gotiate the proposed transaction with the general
partner or sponsor on behalf of the limited part-
ners, and to make a recommendation to the lim-
ited partners with respect to the proposed trans-
action, but not the authority to provide consents
or authorizations to the proposed transaction on
behalf of limited partners;
‘‘(C) the right not to have their voting
power unfairly reduced or abridged;
‘‘(D) the right not to bear an unfair portion
of the costs of a proposed rollup transaction that
is rejected; and
‘‘(E) restrictions on the conversion of con-
tingent interests or fees into non-contingent in-
terests or fees and restrictions on the receipt of
a non-contingent equity interest in exchange for
fees for services which have not yet been pro-
vided.
As used in this paragraph, the term ‘dissenting lim-
ited partner’ means a holder of a beneficial interest
in a limited partnership that is the subject of a lim-
ited partnership transaction who casts a vote against
the transaction and complies with procedures estab-
lished by the association, except that for purposes of
an exchange or tender offer such term means any per-
son who files an objection in writing under the rules
of the association during the period during which the
offer is outstanding.’’.
(d) EFFECT ON EXISTING AUTHORITY.—The amend-
ments made by this section shall not limit the authority
of the Securities and Exchange Commission, a registered
securities association, or a national securities exchange
under any provision of the Securities Exchange Act of 1934,
or preclude the Commission or such association or exchange
from imposing, under any other such provision, a remedy
or procedure required to be imposed under such amend-
ments.
(e) EFFECTIVE DATE.—The amendments made by this
section shall become effective 18 months after the date of
enactment of this Act and shall apply to any security re-
sulting from a partnership rollup transaction (as such term
nished under this subsection as frequently as nec-
essary for particular inquiries or investigations. The
Commission shall, where feasible, avoid requiring
any information to be furnished under this sub-
section that the Commission may obtain from the
Federal Reserve Bank of New York.
‘‘(5) CONSULTATION REQUIREMENT.—In mak-
ing rules under this subsection applicable to govern-
ment securities brokers and government securities
dealers for which a Federal banking agency is the
appropriate regulatory agency, the Commission shall
consult with and consider the views of each such ap-
propriate regulatory agency. If a Federal banking
agency comments in writing on a proposed rule
under this subsection that has been published for
comment, the Commission shall respond in writing
to such written comment before adopting the pro-
posed rule. The Commission shall, at the request of
the Federal banking agency, publish such comment
and response in the Federal Register at the time of
publishing the adopted rule. For purposes of this
paragraph, the term ‘Federal banking agency’ has
the meaning provided in subsection (h)(3)(G).
‘‘(6) AUTHORITY OF THE COMMISSION TO LIMIT
DISCLOSURE
OF
INFORMATION.—Notwithstanding
any other provision of law, the Commission and the
appropriate regulatory agencies shall not be com-
pelled to disclose any information required under
this subsection. Nothing in this subsection shall au-
thorize the Commission or any appropriate regu-
latory agency to withhold information from Con-
gress, or prevent the Commission or any appropriate
regulatory agency from complying with a request for
information from any other Federal department or
agency requesting information for purposes within
the scope of its jurisdiction, or complying with an
order of a court of the United States in an action
brought by the United States, the Commission, or
the appropriate regulatory agency. For purposes of
section 552 of title 5, United States Code, this sub-
section shall be considered a statute described in
subsection (b)(3)(B) of such section 552.’’.
SEC. 4. LARGE POSITION REPORTING.
(a) AMENDMENT.—Section 15C of the Securities Ex-
change Act of 1934 (15 U.S.C. 78o–5) is amended—
(1) by redesignating subsections (f) and (g) as
subsections (g) and (h); and
(2) by inserting after subsection (e) the follow-
ing new subsection:
‘‘(f) LARGE POSITION REPORTING.—
‘‘(1) REPORTING
REQUIREMENTS.—The Sec-
retary may adopt rules to require specified persons
holding, maintaining, or controlling large positions
in to-be-issued or recently issued Treasury securities
to file such reports regarding such positions as the
Secretary determines to be necessary or appropriate
for the purpose of monitoring the impact in the
Treasury securities market of concentrations of posi-
tions in Treasury securities and for the purpose of
otherwise assisting the Commission in the enforce-
ment of this title. Reports required under this sub-
section shall be filed with the Federal Reserve Bank
of New York, acting as agent for the Secretary, and
shall be provided by that Federal Reserve Bank to
the Commission on a timely basis.
‘‘(2) LIMITATION ON REQUIRING CERTAIN RE-
PORTS.—The Secretary may not require under this
subsection—
‘‘(A) reports from persons that are not
government securities brokers or government
securities dealers, or
‘‘(B) reports from government securities
brokers and government securities dealers that
identify particular customers and customer po-
sitions,
except when the Secretary determines, after con-
sultation with the Commission and the Board of
Governors of the Federal Reserve System, that mar-
ket conditions exist that require such information be
obtained to carry out the purposes of this sub-
section.
‘‘(3) ADDITIONAL CONSIDERATIONS.—In mak-
ing determinations under paragraphs (1) and (2),
the Secretary shall take into account any impact on
the efficiency and liquidity of the Treasury securities
market and on the cost to the taxpayers of funding
the Federal debt.
‘‘(4) RECORDKEEPING REQUIREMENTS.—Rules
under this subsection may require persons holding,
maintaining, or controlling large positions in Treas-
ury securities to make and keep for prescribed peri-
ods such records as the Secretary determines are
necessary or appropriate to ensure that such persons
can comply with reporting requirements under this
subsection.
‘‘(5) AGGREGATION RULES.—Rules under this
subsection—
‘‘(A) may prescribe the manner in which
positions and accounts shall be aggregated for
the purpose of this subsection, including aggre-
gation on the basis of common ownership or
control; and
‘‘(B) may define which persons (individ-
ually or as a group) hold, maintain, or control
large positions.
‘‘(6) DEFINITIONAL
AUTHORITY; DETERMINA-
TION OF REPORTING THRESHOLD.—
‘‘(A) In prescribing rules under this sub-
section, the Secretary may, consistent with the
purpose of this subsection, define terms used in
this subsection that are not otherwise defined in
section 3 of this title.
‘‘(B) Rules under this subsection shall
specify—
‘‘(i) the minimum size of positions
subject to reporting under this subsection,
taking into account the purposes of this
subsection and the potential for price dis-
tortions or other anomalies resulting from
large positions;
‘‘(ii) the types of positions (which may
include financing arrangements) to be re-
ported;
‘‘(iii) the securities to be covered; and