I 
112TH CONGRESS 
2D SESSION 
H. R. 6127 
To amend the Securities Exchange Act of 1934 to enable national securities 
exchanges to provide financial incentives to market-makers that adhere 
to objective standards that increase the liquidity and depth of the public 
capital markets and promote enhanced trading and price-discovery for 
smaller public companies. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 13, 2012 
Mr. MCHENRY (for himself and Mr. GARRETT) introduced the following bill; 
which was referred to the Committee on Financial Services 
A BILL 
To amend the Securities Exchange Act of 1934 to enable 
national securities exchanges to provide financial incen-
tives to market-makers that adhere to objective standards 
that increase the liquidity and depth of the public capital 
markets and promote enhanced trading and price-dis-
covery for smaller public companies. 
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 ‘‘Liquidity Enhance-
ment for Small Public Companies Act’’. 
VerDate Mar 15 2010 
23:07 Jul 13, 2012
Jkt 019200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H6127.IH
H6127
srobinson on DSK4SPTVN1PROD with BILLS
SEC. 2. MARKET QUALITY INCENTIVE PROGRAMS. 
(a) RULES OF EXCHANGES.—Section 11 of the Secu-
rities Exchange Act of 1934 (15 U.S.C. 78k) is amended 
by adding at the end the following: 
‘‘(e) MARKET QUALITY INCENTIVE PROGRAMS.— 
‘‘(1) IN GENERAL.—Notwithstanding any provi-
sion of this title or any other provision of law, the 
Commission shall not propose, adopt, maintain, or 
enforce any rule, regulation, policy, or procedure 
that directly or indirectly bars a national securities 
exchange from adopting and administering a pro-
gram pursuant to exchange rules under which the 
exchange, an entity that lists securities on a national 
securities exchange, an entity determined appro-
priate by the Commission, or any other entity deter-
mined appropriate by a national securities exchange, 
provides financial incentives to market makers that 
adhere to standards of market quality established by 
the rules of the exchange. 
‘‘(2) PROCEDURE.—The procedure by which a 
national securities exchange provides financial incen-
tives to market makers pursuant to paragraph (1) 
shall be set forth in the rules of the exchange and 
the exchange shall provide financial incentives only 
to those market makers that maintain specified mar-
VerDate Mar 15 2010 
23:07 Jul 13, 2012
Jkt 019200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H6127.IH
H6127
srobinson on DSK4SPTVN1PROD with BILLS
ket quality standards that include aggressive quoting 
requirements. 
‘‘(3) LIMITATION.—Any financial incentive pro-
vided to market makers described in paragraphs (1) 
and (2) shall be paid only by a national securities 
exchange and may not be paid directly to a market 
maker by an entity that lists securities on the ex-
change.’’. 
(b) RULES OF ASSOCIATIONS.—Section 15A of the 
Securities Exchange Act of 1934 (15 U.S.C. 78o–3) is 
amended by adding at the end the following: 
‘‘(n) MARKET QUALITY INCENTIVE PROGRAMS.—A 
national securities association registered under this sec-
tion may not adopt, maintain, or propose any rule, regula-
tion, policy, or procedure that directly or indirectly bars 
a national securities exchange from having a program 
under which the securities of an issuer determined appro-
priate by the Commission for listing on a national securi-
ties exchange provides financial incentives to market mak-
ers that adhere to standards of market quality established 
by the exchange.’’. 
Æ 
VerDate Mar 15 2010 
23:07 Jul 13, 2012
Jkt 019200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6301
E:\BILLS\H6127.IH
H6127
srobinson on DSK4SPTVN1PROD with BILLS