the Commission under section 11A;
and
‘‘(II) the investors receive new
securities or securities in another en-
tity that are reported under a trans-
action reporting plan declared effec-
tive before January 1, 1991, by the
Commission under section 11A.
‘‘(ii) involving only issuers that are
not required to register or report under
section 12 both before and after the trans-
action;
‘‘(iii) in which the securities to be is-
sued or exchanged are not required to be
and are not registered under the Securities
Act of 1933;
‘‘(iv) which will result in no signifi-
cant adverse change to investors in any of
the limited partnerships with respect to
voting rights, the term of existence of the
entity, management compensation, or in-
vestment objectives; or
‘‘(v) where each investor is provided
an option to receive or retain a security
under substantially the same terms and
conditions as the original issue; or
‘‘(B) the reorganization of a single limited
partnership in which some or all investors in
the limited partnership receive new securities or
securities in another entity, and—
‘‘(i) transactions in the security issued
are reported under a transaction reporting
plan declared effective before January 1,
1991, by the Commission under section
11A;
‘‘(ii) the investors’ limited partnership
securities are not reported under a trans-
action reporting plan declared effective be-
fore January 1, 1991, by the Commission
under section 11A;
‘‘(iii) the issuer is required to register
or report under section 12, both before and
after the transaction, or the securities to
be issued or exchanged are required to be
or are registered under the Securities Act
of 1933;
‘‘(iv) there are significant adverse
changes to security holders in voting
rights, the term of existence of the entity,
management compensation, or investment
objectives; and
‘‘(v) investors are not provided an op-
tion to receive or retain a security under
substantially the same terms and condi-
tions as the original issue.
‘‘(5) EXCLUSION FROM DEFINITION.—As used
in this subsection, the term ‘limited partnership roll-
up transaction’ does not include a transaction that
involves only a limited partnership or partnerships
having an operating policy or practice of retaining
cash available for distribution and reinvesting pro-
ceeds from the sale, financing, or refinancing of as-
sets in accordance with such criteria as the Commis-
sion determines appropriate.’’.
(b) SCHEDULE FOR REGULATIONS.—The Securities
and Exchange Commission shall, not later than 12 months
after the date of enactment of this Act, conduct rule-
making proceedings and prescribe final regulations under
the Securities Act of 1933 and the Securities Exchange
Act of 1934 to implement the requirements of section
14(h) of the Securities Exchange Act of 1934, as amended
by subsection (a).
SEC. 3. RULES OF FAIR PRACTICE IN ROLLUP TRANS-
ACTIONS.
(a) REGISTERED SECURITIES ASSOCIATION RULE.—
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:
‘‘(12) The rules of the association to promote
just and equitable principles of trade, as required by
paragraph (6), include rules to prevent members of
the association from participating in any limited
partnership rollup transaction (as such term is de-
fined in paragraphs (4) and (5) of section 14(h)) un-
less such transaction was conducted 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 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: