US Codex
Pub. L.
Notes

Title V — Encouraging Capital Formation

115th Congress · Approved May 24, 2018 · 132 Stat. 1296

TITLE V Encouraging Capital Formation

SEC. 501. National Securities Exchange Regulatory Parity.

Section 18(b)(1) of the Securities Act of 1933 (15 U.S.C. 77r(b)(1)) is amended—
(1)
by striking subparagraph (A);
(2)
in subparagraph (B)—
(A)
by inserting “ a security designated as qualified for trading in the national market system pursuant to section 11A(a)(2) of the Securities Exchange Act of 1934 (15 U.S.C. 78k–1(a)(2)) that is” before “ listed”; and
(B)
by striking “ that has listing standards that the Commission determines by rule (on its own initiative or on the basis of a petition) are substantially similar to the listing standards applicable to securities described in subparagraph (A)”;
(3)
in subparagraph (C), by striking “ or (B)”; and
(4)
by redesignating subparagraphs (B) and (C) as subparagraphs (A) and (B), respectively.

SEC. 502. Sec Study on Algorithmic Trading.

(a)
In General.— Not later than 18 months after the date of enactment of this Act, the staff of the Securities and Exchange Commission shall submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report on the risks and benefits of algorithmic trading in capital markets in the United States.
(b)
Matters Required To Be Included.— The matters covered by the report required by subsection (a) shall include the following:
(1)
An assessment of the effect of algorithmic trading in equity and debt markets in the United States on the provision of liquidity in stressed and normal market conditions.
(2)
An assessment of the benefits and risks to equity and debt markets in the United States by algorithmic trading.
(3)
An analysis of whether the activity of algorithmic trading and entities that engage in algorithmic trading are subject to appropriate Federal supervision and regulation.
(4)
A recommendation of whether—
(A)
based on the analysis described in paragraphs (1), (2), and (3), any changes should be made to regulations; and
(B)
the Securities and Exchange Commission needs additional legal authorities or resources to effect the changes described in subparagraph (A).

SEC. 503. Annual Review of Government-Business Forum on Capital Formation.

Section 503 of the Small Business Investment Incentive Act of 1980 (15 U.S.C. 80c–1) is amended by adding at the end the following:

“(e) The Commission shall—

“(1) review the findings and recommendations of the forum; and

“(2) each time the forum submits a finding or recommendation to the Commission, promptly issue a public statement—

“(A) assessing the finding or recommendation of the forum; and

“(B) disclosing the action, if any, the Commission intends to take with respect to the finding or recommendation.”

SEC. 504. Supporting America’s Innovators.

Section 3(c)(1) of the Investment Company Act of 1940 (15 U.S.C. 80a–3(c)(1)) is amended—
(1)
in the matter preceding subparagraph (A), by inserting “ (or, in the case of a qualifying venture capital fund, 250 persons)” after “ one hundred persons”; and
(2)
by adding at the end the following:

“(C)

(i) The term ‘qualifying venture capital fund’ means a venture capital fund that has not more than $10,000,000 in aggregate capital contributions and uncalled committed capital, with such dollar amount to be indexed for inflation once every 5 years by the Commission, beginning from a measurement made by the Commission on a date selected by the Commission, rounded to the nearest $1,000,000.

“(ii) The term ‘venture capital fund’ has the meaning given the term in section 275.203(l)–1 of title 17, Code of Federal Regulations, or any successor regulation.”

SEC. 505. Securities and Exchange Commission Overpayment Credit.

(a)
Definitions.— In this section—
(1)
the term “Commission” means the Securities and Exchange Commission;
(2)
the term “national securities association” means an association that is registered under section 15A of the Securities Exchange Act of 1934 (15 U.S.C. 78o–3); and
(3)
the term “national securities exchange” means an exchange that is registered as a national securities exchange under section 6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f).
(b)
Credit for Overpayment of Fees.— Notwithstanding section 31(j) of the Securities Exchange Act of 1934 (15 U.S.C. 78ee(j)), and subject to subsection (c) of this section, if a national securities exchange or a national securities association has paid fees and assessments to the Commission in an amount that is more than the amount that the exchange or association was required to pay under section 31 of the Securities Exchange Act of 1934 (15 U.S.C. 78ee) and, not later than 10 years after the date of such payment, the exchange or association informs the Commission about the payment of such excess amount, the Commission shall offset future fees and assessments due by that exchange or association in an amount that is equal to the difference between the amount that the exchange or association paid and the amount that the exchange or association was required to pay under such section 31.
(c)
Applicability.— Subsection (b) shall apply only to fees and assessments that a national securities exchange or a national securities association was required to pay to the Commission before the date of enactment of this Act.

SEC. 506. U.s. Territories Investor Protection.

(a)
In General.— Section 6(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–6(a)) is amended—
(1)
by striking paragraph (1); and
(2)
by redesignating paragraphs (2) through (5) as paragraphs (1) through (4), respectively.
(b)
Effective Date and Safe Harbor.—
(1)
Effective date.— Except as provided in paragraph (2), the amendment made by subsection (a) shall take effect on the date of enactment of this Act.
(2)
Safe harbor.— With respect to a company that is exempt under section 6(a)(1) of the Investment Company Act of 1940 (15 U.S.C. 80a–6(a)(1)) on the day before the date of enactment of this Act, the amendment made by subsection (a) shall take effect on the date that is 3 years after the date of enactment of this Act.
(3)
Extension of safe harbor.— The Securities and Exchange Commission, by rule or regulation upon its own motion, or by order upon application, may conditionally or unconditionally, under section 6(c) of the Investment Company Act of 1940 (15 U.S.C. 80a–6(c)), further delay the effective date for a company described in paragraph (2) for a maximum of 3 years following the initial 3-year period if, before the end of the initial 3-year period, the Commission determines that such a rule, regulation, motion, or order is necessary or appropriate in the public interest and for the protection of investors.

SEC. 507. Encouraging Employee Ownership.

Not later than 60 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise section 230.701(e) of title 17, Code of Federal Regulations, so as to increase from $5,000,000 to $10,000,000 the aggregate sales price or amount of securities sold during any consecutive 12-month period in excess of which the issuer is required under such section to deliver an additional disclosure to investors. The Commission shall index for inflation such aggregate sales price or amount every 5 years to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, rounding to the nearest $1,000,000.

SEC. 508. Improving Access to Capital.

The Securities and Exchange Commission shall amend—
(1)
section 230.251 of title 17, Code of Federal Regulations, to remove the requirement that the issuer not be subject to section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) immediately before the offering; and
(2)
section 230.257 of title 17, Code of Federal Regulations, with respect to an offering described in section 230.251(a)(2) of title 17, Code of Federal Regulations, to deem any issuer that is subject to section 13 or 15(d) of the Securities Exchange Act of 1934 as having met the periodic and current reporting requirements of section 230.257 of title 17, Code of Federal Regulations, if such issuer meets the reporting requirements of section 13 of the Securities Exchange Act of 1934.

SEC. 509. Parity for Closed-End Companies Regarding Offering and Proxy Rules.

(a)
Revision to Rules.— Not later than the end of the 1-year period beginning on the date of enactment of this Act, the Securities and Exchange Commission shall propose and, not later than 2 years after the date of enactment of this Act, the Securities and Exchange Commission shall finalize any rules, as appropriate, to allow any closed-end company, as defined in section 5(a)(2) of the Investment Company Act of 1940 (15 U.S.C. 80a–5), that is registered as an investment company under such Act, and is listed on a national securities exchange or that makes periodic repurchase offers pursuant to section 270.23c–3 of title 17, Code of Federal Regulations, to use the securities offering and proxy rules, subject to conditions the Commission determines appropriate, that are available to other issuers that are required to file reports under section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m; 78o(d)). Any action that the Commission takes pursuant to this subsection shall consider the availability of information to investors, including what disclosures constitute adequate information to be designated as a “well-known seasoned issuer”.
(b)
Treatment if Revisions Not Completed in a Timely Manner.— If the Commission fails to complete the revisions required by subsection (a) by the time required by such subsection, any registered closed-end company that is listed on a national securities exchange or that makes periodic repurchase offers pursuant to section 270.23c–3 of title 17, Code of Federal Regulations, shall be deemed to be an eligible issuer under the final rule of the Commission titled “Securities Offering Reform” (70 Fed. Reg. 44722; published August 3, 2005).
(c)
Rules of Construction.—
(1)
No effect on rule 482.— Nothing in this section or the amendments made by this section shall be construed to impair or limit in any way a registered closed-end company from using section 230.482 of title 17, Code of Federal Regulations, to distribute sales material.
(2)
References.— Any reference in this section to a section of title 17, Code of Federal Regulations, or to any form or schedule means such rule, section, form, or schedule, or any successor to any such rule, section, form, or schedule.