‘‘(B) PERMISSIBLE ACTIONS.—A class ac-
tion is described in this subparagraph if it in-
volves—
‘‘(i) the purchase or sale of securities
by the issuer or an affiliate of the issuer ex-
clusively from or to holders of equity securi-
ties of the issuer; or
‘‘(ii) any recommendation, position, or
other communication with respect to the
sale of securities of the issuer that—
‘‘(I) is made by or on behalf of the
issuer or an affiliate of the issuer to
holders of equity securities of the
issuer; and
‘‘(II) concerns decisions of those
equity holders with respect to voting
their securities, acting in response to a
tender or exchange offer, or exercising
dissenters’ or appraisal rights.
‘‘(2) STATE ACTIONS.—
‘‘(A) IN
GENERAL.—Notwithstanding any
other provision of this section, nothing in this
section may be construed to preclude a State or
political subdivision thereof or a State pension
plan from bringing an action involving a cov-
ered security on its own behalf, or as a member
of a class comprised solely of other States, politi-
cal subdivisions, or State pension plans that are
named plaintiffs, and that have authorized par-
ticipation, in such action.
‘‘(B) STATE PENSION PLAN DEFINED.—For
purposes of this paragraph, the term ‘State pen-
sion plan’ means a pension plan established and
maintained for its employees by the government
of the State or political subdivision thereof, or by
any agency or instrumentality thereof.
‘‘(3) ACTIONS
UNDER
CONTRACTUAL
AGREE-
MENTS BETWEEN ISSUERS AND INDENTURE TRUST-
EES.—Notwithstanding subsection (b) or (c), a class
action that seeks to enforce a contractual agreement
between an issuer and an indenture trustee may be
maintained in a State or Federal court by a party
to the agreement or a successor to such party.
‘‘(4) REMAND OF REMOVED ACTIONS.—In an ac-
tion that has been removed from a State court pursu-
ant to subsection (c), if the Federal court determines
that the action may be maintained in State court
pursuant to this subsection, the Federal court shall re-
mand such action to such State court.
‘‘(e) PRESERVATION OF STATE JURISDICTION.—The
securities commission (or any agency or office performing
like functions) of any State shall retain jurisdiction under
the laws of such State to investigate and bring enforcement
actions.
‘‘(f) DEFINITIONS.—For purposes of this section, the
following definitions shall apply:
‘‘(1) AFFILIATE OF THE ISSUER.—The term ‘af-
filiate of the issuer’ means a person that directly or
indirectly, through 1 or more intermediaries, controls
or is controlled by or is under common control with,
the issuer.
‘‘(2) CLASS ACTION.—
‘‘(A) IN GENERAL.—The term ‘class action’
means—
‘‘(i) any single lawsuit in which—
‘‘(I) damages are sought on behalf
of more than 50 persons or prospective
class members, and questions of law or
fact common to those persons or mem-
bers of the prospective class, without
reference to issues of individualized re-
liance on an alleged misstatement or
omission, predominate over any ques-
tions affecting only individual persons
or members; or
‘‘(II) 1 or more named parties
seek to recover damages on a represent-
ative basis on behalf of themselves and
other unnamed parties similarly situ-
ated, and questions of law or fact com-
mon to those persons or members of the
prospective class predominate over any
questions affecting only individual per-
sons or members; or
‘‘(ii) any group of lawsuits filed in or
pending in the same court and involving
common questions of law or fact, in
which—
‘‘(I) damages are sought on behalf
of more than 50 persons; and
‘‘(II) the lawsuits are joined, con-
solidated, or otherwise proceed as a
single action for any purpose.
‘‘(B) EXCEPTION
FOR
DERIVATIVE
AC-
TIONS.—Notwithstanding subparagraph (A), the
term ‘class action’ does not include an exclu-
sively derivative action brought by 1 or more
shareholders on behalf of a corporation.
‘‘(C) COUNTING OF CERTAIN CLASS MEM-
BERS.—For purposes of this paragraph, a cor-
poration, investment company, pension plan,
partnership, or other entity, shall be treated as
1 person or prospective class member, but only if
the entity is not established for the purpose of
participating in the action.
‘‘(D) RULE OF CONSTRUCTION.—Nothing in
this paragraph shall be construed to affect the
discretion of a State court in determining wheth-
er actions filed in such court should be joined,
consolidated, or otherwise allowed to proceed as
a single action.
‘‘(3) COVERED SECURITY.—The term ‘covered se-
curity’ means a security that satisfies the standards
for a covered security specified in section 18(b)(1) at
the time during which it is alleged that the misrepre-
sentation, omission, or manipulative or deceptive con-
duct occurred, except that such term shall not include
any debt security that is exempt from registration
under this title pursuant to rules issued by the Com-
mission under section 4(2) of this title.’’.
(2) CIRCUMVENTION OF STAY OF DISCOVERY.—
Section 27(b) of the Securities Act of 1933 (15 U.S.C.
77z–1(b)) is amended by inserting after paragraph
(3) the following new paragraph:
‘‘(4) CIRCUMVENTION OF STAY OF DISCOVERY.—
Upon a proper showing, a court may stay discovery
proceedings in any private action in a State court as
necessary in aid of its jurisdiction, or to protect or
effectuate its judgments, in an action subject to a stay
of discovery pursuant to this subsection.’’.
(3) CONFORMING AMENDMENTS.—Section 22(a)
of the Securities Act of 1933 (15 U.S.C. 77v(a)) is
amended—
(A) by inserting ‘‘except as provided in sec-
tion 16 with respect to class actions,’’ after ‘‘Ter-
ritorial courts,’’; and
(B) by striking ‘‘No case’’ and inserting
‘‘Except as provided in section 16(c), no case’’.
(b) AMENDMENTS
TO
THE SECURITIES EXCHANGE
ACT OF 1934.—
(1) AMENDMENT.—Section 28 of the Securities
Exchange Act of 1934 (15 U.S.C. 78bb) is amended—
(A) in subsection (a), by striking ‘‘The
rights and remedies’’ and inserting ‘‘Except as
provided in subsection (f), the rights and rem-
edies’’; and
‘‘(bb) concerns decisions of
such equity holders with respect to
voting their securities, acting in
response to a tender or exchange
offer, or exercising dissenters’ or
appraisal rights.
‘‘(B) STATE ACTIONS.—
‘‘(i) IN
GENERAL.—Notwithstanding
any other provision of this subsection, noth-
ing in this subsection may be construed to
preclude a State or political subdivision
thereof or a State pension plan from bring-
ing an action involving a covered security
on its own behalf, or as a member of a class
comprised solely of other States, political
subdivisions, or State pension plans that
are named plaintiffs, and that have author-
ized participation, in such action.
‘‘(ii) 
STATE
PENSION
PLAN
DE-
FINED.—For purposes of this subparagraph,
the term ‘State pension plan’ means a pen-
sion plan established and maintained for its
employees by the government of a State or
political subdivision thereof, or by any
agency or instrumentality thereof.
‘‘(C) 
ACTIONS
UNDER
CONTRACTUAL
AGREEMENTS
BETWEEN
ISSUERS
AND
INDEN-
TURE
TRUSTEES.—Notwithstanding paragraph
(1) or (2), a class action that seeks to enforce a
contractual agreement between an issuer and an
indenture trustee may be maintained in a State
or Federal court by a party to the agreement or
a successor to such party.
‘‘(D) REMAND OF REMOVED ACTIONS.—In
an action that has been removed from a State
court pursuant to paragraph (2), if the Federal
court determines that the action may be main-
tained in State court pursuant to this subsection,
the Federal court shall remand such action to
such State court.
‘‘(4) PRESERVATION OF STATE JURISDICTION.—
The securities commission (or any agency or office
performing like functions) of any State shall retain
jurisdiction under the laws of such State to inves-
tigate and bring enforcement actions.
‘‘(5) DEFINITIONS.—For purposes of this sub-
section, the following definitions shall apply:
‘‘(A) AFFILIATE OF THE ISSUER.—The term
‘affiliate of the issuer’ means a person that di-
rectly or indirectly, through 1 or more inter-
mediaries, controls or is controlled by or is
under common control with, the issuer.
‘‘(B) CLASS ACTION.—The term ‘class ac-
tion’ means—
‘‘(i) any single lawsuit in which—
‘‘(I) damages are sought on behalf
of more than 50 persons or prospective
class members, and questions of law or
fact common to those persons or mem-
bers of the prospective class, without
reference to issues of individualized re-
liance on an alleged misstatement or
omission, predominate over any ques-
tions affecting only individual persons
or members; or
‘‘(II) 1 or more named parties
seek to recover damages on a represent-
ative basis on behalf of themselves and
other unnamed parties similarly situ-
ated, and questions of law or fact com-
mon to those persons or members of the
prospective class predominate over any
questions affecting only individual per-
sons or members; or
‘‘(ii) any group of lawsuits filed in or
pending in the same court and involving
common questions of law or fact, in
which—
‘‘(I) damages are sought on behalf
of more than 50 persons; and
‘‘(II) the lawsuits are joined, con-
solidated, or otherwise proceed as a
single action for any purpose.
‘‘(C) EXCEPTION
FOR
DERIVATIVE
AC-
TIONS.—Notwithstanding subparagraph (B), the
term ‘class action’ does not include an exclu-
sively derivative action brought by 1 or more
shareholders on behalf of a corporation.
‘‘(D) COUNTING OF CERTAIN CLASS MEM-
BERS.—For purposes of this paragraph, a cor-
poration, investment company, pension plan,
partnership, or other entity, shall be treated as
1 person or prospective class member, but only if
the entity is not established for the purpose of
participating in the action.
‘‘(E) COVERED SECURITY.—The term ‘cov-
ered security’ means a security that satisfies the
standards for a covered security specified in sec-
tion 18(b)(1) of the Securities Act of 1933, at the
time during which it is alleged that the mis-
representation, omission, or manipulative or de-
ceptive conduct occurred, except that such term
shall not include any debt security that is ex-
empt from registration under the Securities Act
of 1933 pursuant to rules issued by the Commis-
sion under section 4(2) of such Act.
‘‘(F) RULE OF CONSTRUCTION.—Nothing in
this paragraph shall be construed to affect the
discretion of a State court in determining wheth-
er actions filed in such court should be joined,
consolidated, or otherwise allowed to proceed as
a single action.’’.
(2) CIRCUMVENTION OF STAY OF DISCOVERY.—
Section 21D(b)(3) of the Securities Exchange Act of
1934 (15 U.S.C. 78u–4(b)(3)) is amended by insert-
ing after subparagraph (C) the following new sub-
paragraph:
‘‘(D) CIRCUMVENTION OF STAY OF DISCOV-
ERY.—Upon a proper showing, a court may stay
discovery proceedings in any private action in a
State court as necessary in aid of its jurisdic-
tion, or to protect or effectuate its judgments, in
an action subject to a stay of discovery pursuant
to this paragraph.’’.
(c) APPLICABILITY.—The amendments made by this
section shall not affect or apply to any action commenced
before and pending on the date of enactment of this Act.
SEC. 102. ISSUANCE OF SUBPOENAS IN JUDICIAL ACTIONS.
(a) SECURITIES ACT.—Section 22(a) of the Securities
Act of 1933 (15 U.S.C. 77v(a)) is amended by inserting
after the second sentence the following: ‘‘In any action or
proceeding instituted by the Commission under this title in
the district court of the United States for any judicial dis-
trict, subpoenas issued by such court to compel the attend-
ance of witnesses may be served in any other district.’’.
(b) SECURITIES EXCHANGE ACT.—Section 27 of the
Securities Act of 1934 (15 U.S.C. 78aa) is amended by in-
serting after the third sentence the following: ‘‘In any action
or proceeding instituted by the Commission under this title
in the district court of the United States for any judicial
district, subpoenas issued by such court to compel the at-
tendance of witnesses may be served in any other district.’’.
(c) INVESTMENT COMPANY ACT.—Section 44 of the In-
vestment Company Act of 1940 (15 U.S.C. 80a–43) is
amended by inserting after the fourth sentence the following:
‘‘In any action or proceeding instituted by the Commission
under this title in the district court of the United States
for any judicial district, subpoenas issued by such court to
(3) if adverse effects are found, alternatives to, or
revisions of, such preemption or removal that—
(A) would not have such adverse effects;
(B) would further promote the protection of
investors and the public interest; and
(C) would still substantially reduce the risk
of abusive securities litigation.
TITLE II—REAUTHORIZATION OF
THE 
SECURITIES 
AND 
EX-
CHANGE COMMISSION
SEC. 201. AUTHORIZATION OF APPROPRIATIONS.
Section 35 of the Securities Exchange Act of 1934 (15
U.S.C. 78kk) is amended to read as follows:
‘‘SEC. 35. AUTHORIZATION OF APPROPRIATIONS.
‘‘(a) IN GENERAL.—In addition to any other funds au-
thorized to be appropriated to the Commission, there are
authorized to be appropriated to carry out the functions,
powers, and duties of the Commission $351,280,000 for fis-
cal year 1999.
‘‘(b) MISCELLANEOUS
EXPENSES.—Funds appro-
priated pursuant to this section are authorized to be ex-
pended—
‘‘(1) not to exceed $3,000 per fiscal year, for offi-
cial reception and representation expenses;
‘‘(2) not to exceed $10,000 per fiscal year, for
funding a permanent secretariat for the International
Organization of Securities Commissions; and
‘‘(3) not to exceed $100,000 per fiscal year, for
expenses for consultations and meetings hosted by the
Commission with foreign governmental and other reg-
ulatory officials, members of their delegations, appro-
priate representatives, and staff to exchange views
concerning developments relating to securities mat-
ters, for development and implementation of coopera-
tion agreements concerning securities matters and
provision of technical assistance for the development
of foreign securities markets, such expenses to include
necessary logistic and administrative expenses and
the expenses of Commission staff and foreign invitees
in attendance at such consultations and meetings, in-
cluding—
‘‘(A) such incidental expenses as meals
taken in the course of such attendance;
‘‘(B) any travel or transportation to or
from such meetings; and
‘‘(C) any other related lodging or subsist-
ence.’’.
TITLE III—CLERICAL AND
TECHNICAL AMENDMENTS
SEC. 301. CLERICAL AND TECHNICAL AMENDMENTS.
(a) SECURITIES ACT OF 1933.—The Securities Act of
1933 (15 U.S.C. 77 et seq.) is amended as follows:
(1) Section 2(a)(15)(i) (15 U.S.C. 77b(a)(15)(i))
is amended by striking ‘‘section 2(13) of the Act’’ and
inserting ‘‘paragraph (13) of this subsection’’.
(2) Section 11(f)(2)(A) (15 U.S.C. 77k(f)(2)(A))
is amended by striking ‘‘section 38’’ and inserting
‘‘section 21D(f)’’.
(3) Section 13 (15 U.S.C. 77m) is amended—
(A) by striking ‘‘section 12(2)’’ each place it
appears and inserting ‘‘section 12(a)(2)’’; and
(B) by striking ‘‘section 12(1)’’ each place it
appears and inserting ‘‘section 12(a)(1)’’.
(4) Section 18 (15 U.S.C. 77r) is amended—
(A) in subsection (b)(1)(A), by inserting ‘‘,
or authorized for listing,’’ after ‘‘Exchange, or
listed’’;
(B) in subsection (c)(2)(B)(i), by striking
‘‘Capital Markets Efficiency Act of 1996’’ and
inserting ‘‘National Securities Markets Improve-
ment Act of 1996’’;
(C) in subsection (c)(2)(C)(i), by striking
‘‘Market’’ and inserting ‘‘Markets’’;
(D) in subsection (d)(1)(A)—
(i) by striking ‘‘section 2(10)’’ and in-
serting ‘‘section 2(a)(10)’’; and
(ii) by striking ‘‘subparagraphs (A)
and (B)’’ and inserting ‘‘subparagraphs (a)
and (b)’’;
(E) in subsection (d)(2), by striking ‘‘Secu-
rities Amendments Act of 1996’’ and inserting
‘‘National Securities Markets Improvement Act
of 1996’’; and
(F) in subsection (d)(4), by striking ‘‘For
purposes of this paragraph, the’’ and inserting
‘‘The’’.
(5) Sections 27, 27A, and 28 (15 U.S.C. 77z–1,
77z–2, 77z–3) are transferred to appear after section
26.
(6) Paragraph (28) of schedule A of such Act (15
U.S.C. 77aa(28)) is amended by striking ‘‘identic’’
and inserting ‘‘identical’’.
(b) SECURITIES EXCHANGE ACT OF 1934.—The Secu-
rities Exchange Act of 1934 (15 U.S.C. 78 et seq.) is amend-
ed as follows:
(1) Section 3(a)(10) (15 U.S.C. 78c(a)(10)) is
amended by striking ‘‘deposit, for’’ and inserting ‘‘de-
posit for’’.
(2) 
Section 
3(a)(12)(A) 
(15 
U.S.C.
78c(a)(12)(A)) is amended by moving clause (vi) two
em spaces to the left.
(3) 
Section 
3(a)(22)(A) 
(15 
U.S.C.
78c(a)(22)(A)) is amended—
(A) by striking ‘‘section 3(h)’’ and inserting
‘‘section 3’’; and
(B) by striking ‘‘section 3(t)’’ and inserting
‘‘such section 3’’.
(4) 
Section 
3(a)(39)(B)(i) 
(15 
U.S.C.
78c(a)(39)(B)(i)) is amended by striking ‘‘an order to
the Commission’’ and inserting ‘‘an order of the Com-
mission’’.
(5) The following sections are each amended by
striking ‘‘Federal Reserve Board’’ and inserting
‘‘Board of Governors of the Federal Reserve System’’:
subsections (a) and (b) of section 7 (15 U.S.C. 78g(a),
(b)); section 17(g) (15 U.S.C. 78q(g)); and section 26
(15 U.S.C. 78z).
(6) The heading of subsection (d) of section 7 (15
U.S.C. 78g(d)) is amended by striking ‘‘EXCEPTION’’
and inserting ‘‘EXCEPTIONS’’.
(7) Section 14(g)(4) (15 U.S.C. 78n(g)(4)) is
amended by striking ‘‘consolidation sale,’’ and insert-
ing ‘‘consolidation, sale,’’.
(8) Section 15 (15 U.S.C. 78o) is amended—
(A) in subsection (c), by moving paragraph
(8) two em spaces to the left;
(B) in subsection (h)(2), by striking ‘‘affect-
ing’’ and inserting ‘‘effecting’’;
(C) in subsection (h)(3)(A)(i)(II)(bb), by in-
serting ‘‘or’’ after the semicolon;
(D) in subsection (h)(3)(A)(ii)(I), by strik-
ing ‘‘maintains’’ and inserting ‘‘maintained’’;
(E) in subsection (h)(3)(B)(ii), by striking
‘‘association’’ and inserting ‘‘associated’’.
(9) Section 15B(c)(4) (15 U.S.C. 78o–4(c)(4)) is
amended by striking ‘‘convicted by any offense’’ and
inserting ‘‘convicted of any offense’’.
(10) Section 15C(f)(5) (15 U.S.C. 78o–5(f)(5)) is
amended by striking ‘‘any person or class or persons’’
and inserting ‘‘any person or class of persons’’.
(11) Section 19(c) (15 U.S.C. 78s(c)) is amended
by moving paragraph (5) two em spaces to the right.
(12) Section 20 (15 U.S.C. 78t) is amended by
redesignating subsection (f) as subsection (e).
(13) Section 21D (15 U.S.C. 78u–4) is amend-
ed—
(A) by redesignating subsection (g) as sub-
section (f); and
(B) in paragraph (2)(B)(i) of such sub-
section, by striking ‘‘paragraph (1)’’ and insert-
ing ‘‘subparagraph (A)’’.
(14) Section 31(a) (15 U.S.C. 78ee(a)) is amend-
ed by striking ‘‘this subsection’’ and inserting ‘‘this
section’’.
(c) INVESTMENT COMPANY ACT OF 1940.—The Invest-
ment Company Act of 1940 (15 U.S.C. 80a–1 et seq.) is
amended as follows:
(1) Section 2(a)(8) (15 U.S.C. 80a–2(a)(8)) is
amended 
by 
striking 
‘‘Unitde’’ 
and 
inserting
‘‘United’’.
(2) Section 3(b) (15 U.S.C. 80a–3(b)) is amend-
ed by striking ‘‘paragraph (3) of subsection (a)’’ and
inserting ‘‘paragraph (1)(C) of subsection (a)’’.
(3) Section 12(d)(1)(G)(i)(III)(bb) (15 U.S.C.
80a–12(d)(1)(G)(i)(III)(bb)), by striking ‘‘the ac-
quired fund’’ and inserting ‘‘the acquired company’’.
(4) Section 18(e)(2) (15 U.S.C. 80a–18(e)(2)) is
amended by striking ‘‘subsection (e)(2)’’ and inserting
‘‘paragraph (1) of this subsection’’.
(5) Section 30 (15 U.S.C. 80a–29) is amended—
(A) by inserting ‘‘and’’ after the semicolon
at the end of subsection (b)(1);
(B) in subsection (e), by striking ‘‘semi-an-
nually’’ and inserting ‘‘semiannually’’; and
(C) by redesignating subsections (g) and (h)
as added by section 508(g) of the National Secu-
rities Markets Improvement Act of 1996 as sub-
sections (i) and (j), respectively.
(6) Section 31(f) (15 U.S.C. 80a–30(f)) is
amended by striking ‘‘subsection (c)’’ and inserting
‘‘subsection (e)’’.
(d) INVESTMENT ADVISERS ACT OF 1940.—The Invest-
ment Advisers Act of 1940 (15 U.S.C. 80b et seq.) is amend-
ed as follows:
(1) Section 203(e)(8)(B) (15 U.S.C. 80b–
3(e)(8)(B)) is amended by inserting ‘‘or’’ after the
semicolon.
(2) Section 222(b)(2) of (15 U.S.C. 80b–
18a(b)(2)) is amended by striking ‘‘principle’’ and
inserting ‘‘principal’’.
(e) TRUST INDENTURE ACT OF 1939.—The Trust In-
denture Act of 1939 (15 U.S.C. 77aaa et seq.) is amended
as follows:
(1) Section 303 (15 U.S.C. 77ccc) is amended by
striking ‘‘section 2’’ each place it appears in para-
graphs (2) and (3) and inserting ‘‘section 2(a)’’.
(2) 
Section 
304(a)(4)(A) 
(15 
U.S.C.
77ddd(a)(4)(A)) is amended by striking ‘‘(14) of sub-
section’’ and inserting ‘‘(13) of section’’.
(3) Section 313(a) (15 U.S.C. 77mmm(a)) is
amended—
(A) by inserting ‘‘any change to’’ after the
paragraph designation at the beginning of para-
graph (4); and
(B) by striking ‘‘any change to’’ in para-
graph (6).
(4) Section 319(b) (15 U.S.C. 77sss(b)) is
amended by striking ‘‘the Federal Register Act’’ and
inserting ‘‘chapter 15 of title 44, United States
Code,’’.
SEC. 302. EXEMPTION OF SECURITIES ISSUED IN CONNEC-
TION WITH CERTAIN STATE HEARINGS.
Section 18(b)(4)(C) of the Securities Act of 1933 (15
U.S.C. 77r(b)(4)(C)) is amended by striking ‘‘paragraph
(4) or (11)’’ and inserting ‘‘paragraph (4), (10), or (11)’’.