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Small Cap Liquidity Reform Act of 2014

3/14/2024, 12:48 PM

Congressional Summary of HR 3448

Small Cap Liquidity Reform Act of 2014 - Amends the Securities Exchange Act of 1934 to establish a pilot liquidity program for equity securities of emerging growth companies (EGCs) with total annual gross revenues of less than $750 million, under which those securities shall be quoted using either: (1) a minimum increment of $0.05 or $0.10, or (2) the increment at which the securities would be quoted without regard to such minimum increments.

Repeals the requirement for an SEC study examining the transition to trading and quoting securities in one penny increments, known as decimalization.

Directs the Securities and Exchange Commission (SEC) to determine, in the case of an EGC whose securities are quoted at a minimum increment of either $0.05 or $0.10, the increment at which such securities are traded.

Requires EGC securities quoted at a minimum increment of $0.05 or $0.10 to be traded at either such minimum increment or at one permitted by SEC regulations.

Permits an EGC to opt out or change such minimum increment upon notifying the SEC 90 days after enactment of this Act. Limits any EGC to a single change of minimum increment (thus prohibiting any increases in the minimum).

Requires the SEC, upon notification of an EGC election, to inform each trading venue where the EGC securities are quoted or traded.

Requires that securities of issuers that cease to be EGCs be quoted at the increment at which such securities would be quoted without regard to the minimum increments established under this Act.

Prescribes pricing and trading procedures governing securities trading below $1.00.

Directs the SEC to require an EGC under this Act to submit additional reports and disclosures.

Shields an issuer from liability for losses caused solely by the quoting or trading of its securities at a minimum increment of $0.05 or $0.10, another SEC-authorized increment, or by both such quoting and trading.

Directs the SEC to report biannually to Congress on: (1) the quoting and trading of securities in increments permitted by this Act, and (2) the extent to which such quoting and trading increases liquidity and active trading by incentivizing capital commitment, research coverage, and brokerage support.

Authorizes the SEC to: (1) make adjustments to the pilot program to ensure that it can provide statistically meaningful or reliable results, and (2) conduct any other study or pilot program to evaluate quoting or trading in various minimum increments.

Sunsets the pilot program five years after enactment of this Act.

Current Status of Bill HR 3448

Bill HR 3448 is currently in the status of Bill Introduced since November 12, 2013. Bill HR 3448 was introduced during Congress 113 and was introduced to the House on November 12, 2013.  Bill HR 3448's most recent activity was Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. as of February 12, 2014

Bipartisan Support of Bill HR 3448

Total Number of Sponsors
1
Democrat Sponsors
0
Republican Sponsors
1
Unaffiliated Sponsors
0
Total Number of Cosponsors
2
Democrat Cosponsors
1
Republican Cosponsors
1
Unaffiliated Cosponsors
0

Policy Area and Potential Impact of Bill HR 3448

Primary Policy Focus

Finance and Financial Sector

Potential Impact Areas

- Administrative law and regulatory procedures
- Corporate finance and management
- Financial services and investments
- Securities
- Securities and Exchange Commission (SEC)
- Small business

Alternate Title(s) of Bill HR 3448

Small Cap Liquidity Reform Act of 2014
To amend the Securities Exchange Act of 1934 to provide for an optional pilot program allowing certain emerging growth companies to increase the tick sizes of their stocks.
Small Cap Liquidity Reform Act of 2013
Small Cap Liquidity Reform Act of 2013
Small Cap Liquidity Reform Act of 2014

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