H.R. 6623

[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6623 Introduced in House (IH)]

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118th CONGRESS
1st Session
H. R. 6623

To amend the Securities Exchange Act of 1934 to allow for the 
registration of venture exchanges, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

December 6, 2023

Mr. Emmer (for himself, Mr. Donalds, and Mr. Fitzgerald) introduced the 
following bill; which was referred to the Committee on Financial 
Services

_______________________________________________________________________

A BILL

To amend the Securities Exchange Act of 1934 to allow for the 
registration of venture exchanges, and for other purposes.

Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Main Street Growth Act''.

SEC. 2. VENTURE EXCHANGES.

(a) Securities Exchange Act of 1934.--Section 6 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78f) is amended by adding at the end 
the following:
``(m) Venture Exchange.--
``(1) Registration.--
``(A) In general.--A person may register themself 
(and a national securities exchange may register a 
listing tier of such exchange) as a national securities 
exchange solely for the purposes of trading venture 
securities by filing an application with the Commission 
pursuant to subsection (a) and the rules and 
regulations thereunder.
``(B) Publication of notice.--The Commission shall, 
upon the filing of an application under subparagraph 
(A), publish notice of such filing and afford 
interested persons an opportunity to submit written 
data, views, and arguments concerning such application.
``(C) Approval or denial.--
``(i) In general.--Within 90 days of the 
date of publication of a notice under 
subparagraph (B) (or within such longer period 
as to which the applicant consents), the 
Commission shall--
``(I) by order grant such 
registration; or
``(II) institute a denial 
proceeding under clause (ii) to 
determine whether registration should 
be denied.
``(ii) Denial proceeding.--A proceeding 
under clause (i)(II) shall include notice of 
the grounds for denial under consideration and 
opportunity for hearing and shall be concluded 
within 180 days of the date of the publication 
of a notice under subparagraph (B). At the 
conclusion of such proceeding the Commission, 
by order, shall grant or deny such 
registration. The Commission may extend the 
time for conclusion of such proceeding for up 
to 90 days if the Commission finds good cause 
for such extension and publishes the 
Commission's reasons for so finding or for such 
longer period as to which the applicant 
consents.
``(iii) Criteria for approval or denial.--
The Commission shall grant a registration under 
this paragraph if the Commission finds that the 
requirements of this title and the rules and 
regulations thereunder with respect to the 
applicant are satisfied. The Commission shall 
deny such registration if it does not make such 
finding.
``(2) Powers and restrictions.--In addition to the powers 
and restrictions otherwise applicable to a national securities 
exchange, a venture exchange--
``(A) may only constitute, maintain, or provide a 
market place or facilities for bringing together 
purchasers and sellers of venture securities;
``(B) may not extend unlisted trading privileges to 
any venture security;
``(C) may only, if the venture exchange is a 
listing tier of another national securities exchange, 
allow trading in securities that are registered under 
section 12(b) on a national securities exchange other 
than a venture exchange; and
``(D) may, subject to the rule filing process under 
section 19(b)--
``(i) determine the increment to be used 
for quoting and trading venture securities on 
the exchange; and
``(ii) choose to carry out periodic 
auctions for the sale of a venture security 
instead of providing continuous trading of the 
venture security.
``(3) Treatment of certain exempted securities.--A security 
that is exempt from registration pursuant to section 3(b) of 
the Securities Act of 1933 shall be exempt from section 12(a) 
of this title to the extent such securities are traded on a 
venture exchange, if the issuer of such security is in 
compliance with--
``(A) all disclosure obligations of such section 
3(b) and the regulations issued under such section; and
``(B) ongoing disclosure obligations of the 
applicable venture exchange that are similar to those 
provided by an issuer under tier 2 of Regulation A (17 
CFR 230.251 et seq.).
``(4) Venture securities traded on venture exchanges may 
not trade on non-venture exchanges.--A venture security may not 
be traded on a national securities exchange that is not a 
venture exchange during any period in which the venture 
security is being traded on a venture exchange.
``(5) Rule of construction.--Nothing in this subsection may 
be construed as requiring transactions in venture securities to 
be effected on a national securities exchange.
``(6) Commission authority to limit certain trading.--The 
Commission may limit transactions in venture securities that 
are not effected on a national securities exchange as 
appropriate to promote efficiency, competition, capital 
formation, and to protect investors.
``(7) Disclosures to investors.--The Commission shall issue 
regulations to ensure that persons selling or purchasing 
venture securities on a venture exchange are provided 
disclosures sufficient to understand--
``(A) the characteristics unique to venture 
securities; and
``(B) in the case of a venture exchange that is a 
listing tier of another national securities exchange, 
that the venture exchange is distinct from the other 
national securities exchange.
``(8) Definitions.--For purposes of this subsection:
``(A) Early-stage, growth company.--
``(i) In general.--The term `early-stage, 
growth company' means an issuer--
``(I) that has not made any 
registered initial public offering of 
any securities of the issuer; and
``(II) with a public float of less 
than or equal to the value of public 
float required to qualify as a large 
accelerated filer under section 
240.12b-2 of title 17, Code of Federal 
Regulations.
``(ii) Treatment when public float exceeds 
threshold.--An issuer shall not cease to be an 
early-stage, growth company by reason of the 
public float of such issuer exceeding the 
threshold specified in clause (i)(II) until the 
later of the following:
``(I) The end of the period of 24 
consecutive months during which the 
public float of the issuer exceeds 
$2,000,000,000 (as such amount is 
indexed for inflation every 5 years by 
the Commission to reflect the change in 
the Consumer Price Index for All Urban 
Consumers published by the Bureau of 
Labor Statistics, setting the threshold 
to the nearest $1,000,000).
``(II) The end of the 1-year period 
following the end of the 24-month 
period described under subclause (I), 
if the issuer requests such 1-year 
extension from a venture exchange and 
the venture exchange elects to provide 
such extension.
``(B) Public float.--With respect to an issuer, the 
term `public float' means the aggregate worldwide 
market value of the voting and non-voting common equity 
of the issuer held by non-affiliates.
``(C) Venture security.--
``(i) In general.--The term `venture 
security' means--
``(I) securities of an early-stage, 
growth company that are exempt from 
registration pursuant to section 3(b) 
of the Securities Act of 1933;
``(II) securities of an emerging 
growth company; or
``(III) securities registered under 
section 12(b) and listed on a venture 
exchange (or, prior to listing on a 
venture exchange, listed on a national 
securities exchange) where--
``(aa) the issuer of such 
securities has a public float 
less than or equal to the value 
of public float required to 
qualify as a large accelerated 
filer under section 240.12b-2 
of title 17, Code of Federal 
Regulations; or
``(bb) the average daily 
trade volume is 75,000 shares 
or less during a continuous 60-
day period.
``(ii) Treatment when public float exceeds 
threshold.--Securities shall not cease to be 
venture securities by reason of the public 
float of the issuer of such securities 
exceeding the threshold specified in clause 
(i)(III)(aa) until the later of the following:
``(I) The end of the period of 24 
consecutive months beginning on the 
date--
``(aa) the public float of 
such issuer exceeds 
$2,000,000,000; and
``(bb) the average daily 
trade volume of such securities 
is 100,000 shares or more 
during a continuous 60-day 
period.
``(II) The end of the 1-year period 
following the end of the 24-month 
period described under subclause (I), 
if the issuer of such securities 
requests such 1-year extension from a 
venture exchange and the venture 
exchange elects to provide such 
extension.''.
(b) Securities Act of 1933.--Section 18 of the Securities Act of 
1933 (15 U.S.C. 77r) is amended--
(1) by redesignating subsection (d) as subsection (e); and
(2) by inserting after subsection (c) the following:
``(d) Treatment of Securities Listed on a Venture Exchange.--
Notwithstanding subsection (b), a security is not a covered security 
pursuant to subsection (b)(1)(A) if the security is only listed, or 
authorized for listing, on a venture exchange (as defined under section 
6(m) of the Securities Exchange Act of 1934).''.
(c) Sense of Congress.--It is the sense of the Congress that the 
Securities and Exchange Commission should--
(1) when necessary or appropriate in the public interest 
and consistent with the protection of investors, make use of 
the Commission's general exemptive authority under section 36 
of the Securities Exchange Act of 1934 (15 U.S.C. 78mm) with 
respect to the provisions added by this section; and
(2) if the Commission determines appropriate, create an 
Office of Venture Exchanges within the Commission's Division of 
Trading and Markets.
(d) Rule of Construction.--Nothing in this section or the 
amendments made by this section shall be construed to impair or limit 
the construction of the antifraud provisions of the securities laws (as 
defined in section 3(a) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a))) or the authority of the Securities and Exchange 
Commission under those provisions.
(e) Effective Date for Tiers of Existing National Securities 
Exchanges.--In the case of a securities exchange that is registered as 
a national securities exchange under section 6 of the Securities 
Exchange Act of 1934 (15 U.S.C. 78f) on the date of the enactment of 
this Act, any election for a listing tier of such exchange to be 
treated as a venture exchange under subsection (m) of such section 
shall not take effect before the date that is 180 days after such date 
of enactment.
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