,,ib ,union ,calendar ,no4 #beb #aacth ,,congress #b;d ,session ,h4 ,r4 #cddh ,report ,no4 #aac-cdb ,,in ,,the ,,house ,,of ,,representatives ,november #ab1 #bjac ,mr4 ,duffy 7for himself and ,mr4 ,carney7 introduced the following bill2 which was referred to the ,committee on ,financial ,services ,february #e1 #bjad ,additional sponsor3 ,mr4 ,fincher ,february #e1 #bjad ,reported with an amendment1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed ,strike out all after the enacting clause and insert the part printed in italic ,for text of introduced bill1 see copy of bill as introduced on ,november #ab1 #bjac ,a ,,bill ,to amend the ,securities ,exchange ,act of #aicd to provide for an optional pilot program allowing certain emerging growth companies to increase the tick sizes of their stocks4 #a4 ,short title ,this ,act may be cited as the ,small ,cap ,liquidity ,reform ,act of #bjac4 #b4 ,liquidity pilot program for securities of certain emerging growth companies 7a7 ,in general ,section #aa;,a7c77#f7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #ghk-#a7;c77#f77 is amended to read as follows3 7#f7 ,liquidity pilot program for securities of certain emerging growth companies 7,a7 ,quoting increment ,beginning on the date that is #ij days after the date of the enactment of the ,small ,cap ,liquidity ,reform ,act of #bjac1 the securities of a covered emerging growth company shall be quoted using-- 7i7 a minimum increment of #j4je2 or 7ii7 if1 not later than #fj days after such date of enactment1 the company so elects in the manner described in subparagraph 7,d7-- 7,i7 a minimum increment of #j4aj2 or 7,,ii7 the increment at which such securities would be quoted without regard to the minimum increments established under this paragraph4 7,b7 ,trading increment ,in the case of a covered emerging growth company the securities of which are quoted at a minimum increment of #j4je or #j4aj under this paragraph1 the ,commission shall determine the increment at which the securities of such company are traded4 7,c7 ,future right to opt out or change minimum increment 7i7 ,in general ,at any time beginning on the date that is #ij days after the date of the enactment of the ,small ,cap ,liquidity ,reform ,act of #bjac1 a covered emerging growth company the securities of which are quoted at a minimum increment of #j4je or #j4aj under this paragraph may elect in the manner described in subparagraph 7,d7-- 7,i7 for the securities of such company to be quoted at the increment at which such securities would be quoted without regard to the minimum increments established under this paragraph2 or 7,,ii7 to change the minimum increment at which the securities of such company are quoted from #j4je to #j4aj or from #j4aj to #j4je4 7ii7 ,when election effective ,an election under this subparagraph shall take effect on the date that is #cj days after such election is made4 7iii7 ,single election to change minimum increment ,a covered emerging growth company may not make more than one election under clause 7i77,,ii74 7,d7 ,manner of election 7i7 ,in general ,an election is made in the manner described in this subparagraph by informing the ,commission of such election4 7ii7 ,notification of exchanges and other trading venues ,upon being informed of an election under clause 7i71 the ,commission shall notify each exchange or other trading venue where the securities of the covered emerging growth company are quoted or traded4 7,e7 ,issuers ceasing to be covered emerging growth companies 7i7 ,in general ,if an issuer the securities of which are quoted at a minimum increment of #j4je or #j4aj under this paragraph ceases to be a covered emerging growth company1 the securities of such issuer shall be quoted at the increment at which such securities would be quoted without regard to the minimum increments established under this paragraph4 7ii7 ,exceptions ,the ,commission may by regulation1 as the ,commission considers appropriate1 specify any circumstances under which an issuer shall continue to be considered a covered emerging growth company for purposes of this paragraph after the issuer ceases to meet the requirements of subparagraph 7,l77i74 7,f7 ,securities trading below #a 7i7 ,initial price 7,i7 ,at effective date ,if the trading price of the securities of a covered emerging growth company is below #a at the close of the last trading day before the date that is #ij days after the date of the enactment of the ,small ,cap ,liquidity ,reform ,act of #bjac1 the securities of such company shall be quoted using the increment at which such securities would be quoted without regard to the minimum increments established under this paragraph4 7,,ii7 ,at ,,ipo ,if a covered emerging growth company makes an initial public offering after the day described in subclause 7,i7 and the first share of the securities of such company is offered to the public at a price below #a1 the securities of such company shall be quoted using the increment at which such securities would be quoted without regard to the minimum increments established under this paragraph4 7ii7 ,average trading price ,if the average trading price of the securities of a covered emerging growth company falls below #a for any #ij-;day period beginning on or after the day before the date of the enactment of the ,small ,cap ,liquidity ,reform ,act of #bjac1 the securities of such company shall1 after the end of such period1 be quoted using the increment at which such securities would be quoted without regard to the minimum increments established under this paragraph4 7,g7 ,fraud or manipulation ,if the ,commission determines that a covered emerging growth company has violated any provision of the securities laws prohibiting fraudulent1 manipulative1 or deceptive acts or practices1 the securities of such company shall1 after the date of the determination1 be quoted using the increment at which such securities would be quoted without regard to the minimum increments established under this paragraph4 7,h7 ,ineligibility for increased minimum increment permanent ,the securities of an issuer may not be quoted at a minimum increment of #j4je or #j4aj under this paragraph at any time after-- 7i7 such issuer makes an election under subparagraph 7,a77ii77,,ii72 7ii7 such issuer makes an election under subparagraph 7,c77i77,i71 except during the period before such election takes effect2 or 7iii7 the securities of such issuer are required by this paragraph to be quoted using the increment at which such securities would be quoted without regard to the minimum increments established under this paragraph4 7,i7 ,additional reports and disclosures ,the ,commission shall require a covered emerging growth company the securities of which are quoted at a minimum increment of #j4je or #j4aj under this paragraph to make such reports and disclosures as the ,commission considers necessary or appropriate in the public interest or for the protection of investors4 7,j7 ,limitation of liability ,an issuer 7or any officer1 director1 manager1 or other agent of such issuer7 shall not be liable to any person 7other than such issuer7 under any law or regulation of the ,united ,states1 any constitution1 law1 or regulation of any ,state or political subdivision thereof1 or any contract or other legally enforceable agreement 7including any arbitration agreement7 for any losses caused solely by the quoting of the securities of such issuer at a minimum increment of #j4je or #j4aj1 by the trading of such securities at the increment determined by the ,commission under subparagraph 7,b71 or by both such quoting and trading1 as provided in this paragraph4 7,k7 ,report to ,congress ,not later than #f months after the date of the enactment of the ,small ,cap ,liquidity ,reform ,act of #bjac1 and every #f months thereafter1 the ,commission1 in coordination with each exchange on which the securities of covered emerging growth companies are quoted or traded1 shall submit to ,congress a report on the quoting and trading of securities in increments permitted by this paragraph and the extent to which such quoting and trading are increasing liquidity and active trading by incentivizing capital commitment1 research coverage1 and brokerage support1 together with any legislative recommendations the ,commission may have4 7,l7 ,definitions ,in this paragraph3 7i7 ,covered emerging growth company ,the term covered emerging growth company means an emerging growth company1 as defined in the first paragraph 7#hj7 of section #c7;a71 except that-- 7,i7 such paragraph shall be applied by substituting #gej1jjj1jjj for #a1jjj1jjj1jjj each place it appears2 and 7,,ii7 subparagraphs 7,b71 7,c71 and 7,d7 of such paragraph do not apply4 7ii7 ,security ,the term security means an equity security4 7,m7 ,savings provision ,notwithstanding any other provision of this paragraph1 the ,commission may-- 7i7 make such adjustments to the pilot program specified in this paragraph as the ,commission considers necessary or appropriate to ensure that such program can provide statistically meaningful or reliable results1 including adjustments to eliminate selection bias among participants1 expand the number of participants eligible to participate in such program1 and change the duration of such program for one or more participants2 and 7ii7 conduct any other study or pilot program1 in conjunction with or separate from the pilot program specified in this paragraph 7as such program may be adjusted pursuant to clause 7i771 to evaluate quoting or trading in various minimum increments4 4 7b7 ,sunset ,effective on the date that is #e years after the date of the enactment of this ,act1 section #aa;,a7c77#f7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #ghk-#a7;c77#f77 is repealed4 ,february #e1 #bjad ,reported with an amendment1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed