H.R. 9709

[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9709 Introduced in House (IH)]

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118th CONGRESS
2d Session
H. R. 9709

To amend the Securities Exchange Act of 1934 to require the Securities 
and Exchange Commission to issue rules that prohibit officers and 
directors of certain companies from trading securities in anticipation 
of a current report, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

September 19, 2024

Mr. Sherman introduced the following bill; which was referred to the 
Committee on Financial Services

_______________________________________________________________________

A BILL

To amend the Securities Exchange Act of 1934 to require the Securities 
and Exchange Commission to issue rules that prohibit officers and 
directors of certain companies from trading securities in anticipation 
of a current report, 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 ``8-K Trading Gap Act of 2024''.

SEC. 2. PROHIBITION ON CERTAIN TRADING IN ANTICIPATION OF A CURRENT 
REPORT.

The Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) is 
amended by inserting after section 10D (15 U.S.C. 78j-4) the following:

``SEC. 10E. PROHIBITION ON CERTAIN TRADING IN ANTICIPATION OF A CURRENT 
REPORT.

``(a) Prohibition.--Not later than 1 year after the date of 
enactment of this section, the Commission shall issue rules that 
require each issuer that is subject to reporting requirements under 
section 13(a) or 15(d) to establish and maintain policies, controls, 
and procedures that are reasonably designed to prohibit executive 
officers and directors of the issuer from purchasing, selling, or 
otherwise transferring any equity security of the issuer or interest in 
an equity security of the issuer, directly or indirectly--
``(1) with respect to an event described in any of sections 
1 through 6 of the form described in section 249.308 of title 
17, Code of Federal Regulations (referred to in this section as 
`Form 8-K'), between--
``(A) the occurrence of that event; and
``(B) the filing or furnishing of a current report 
on Form 8-K with respect to that event; and
``(2) with respect to an event described in section 7 or 8 
of Form 8-K, between--
``(A) the date on which the issuer determines that 
the issuer will disclose that event; and
``(B) the filing or furnishing of a current report 
on Form 8-K with respect to that event.
``(b) Permissible Transactions.--In issuing rules under subsection 
(a), the Commission--
``(1) may exempt certain transactions that the Commission 
determines are appropriate, including those transactions that--
``(A) occur automatically;
``(B) are made pursuant to an advance election; or
``(C) except as provided in paragraph (2), involve 
a purchase or sale of equity securities that satisfies 
the conditions under section 240.10b5-1(c) of title 17, 
Code of Federal Regulations;
``(2) may not exempt from those rules a transaction made by 
an executive officer or director of an issuer under a plan 
that--
``(A) is described in section 240.10b5-
1(c)(1)(i)(A)(3) of title 17, Code of Federal 
Regulations; and
``(B) was adopted--
``(i) with respect to an event described in 
any of sections 1 through 6 of Form 8-K, 
between--
``(I) the occurrence of that event; 
and
``(II) the filing or furnishing of 
a current report on Form 8-K with 
respect to that event; and
``(ii) with respect to an event described 
in section 7 or 8 of Form 8-K, between--
``(I) the date on which the issuer 
determines that the issuer will 
disclose that event; and
``(II) the filing or furnishing of 
a current report on Form 8-K with 
respect to that event; and
``(3) shall exempt from those rules--
``(A) issuers required to adopt and administer a 
code of ethics pursuant section 270.17j-1 of title 17, 
Code of Federal Regulations;
``(B) any other issuer registered under the 
Investment Company Act of 1940 (15 U.S.C. 80a-1 et 
seq.), the investment advisers of which are required to 
adopt and administer a code of ethics pursuant to 
section 275.204A-1 of title 17, Code of Federal 
Regulations; and
``(C) any event that is--
``(i) described in any of sections 1 
through 6 of Form 8-K; and
``(ii) announced by the issuer in a press 
release or other method of dissemination 
described in section 243.101(e)(2) of title 17, 
Code of Federal Regulations.
``(c) Foreign Issuers.--In issuing rules under subsection (a), the 
Commission may include foreign issuers required to use the form 
described in section 249.306 of title 17, Code of Federal Regulations.
``(d) Rule of Construction.--Each reference in this section to a 
provision of the Code of Federal Regulations (including each reference 
in this section to Form 8-K) shall be construed as a reference to that 
provision as in effect on the date of enactment of this section.''.
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