summary
Introduced
10/23/2013
10/23/2013
In Committee
11/14/2013
11/14/2013
Crossed Over
02/12/2014
02/12/2014
Passed
Dead
01/03/2015
01/03/2015
Introduced Session
113th Congress
Bill Summary
Small Cap Liquidity Reform Act of 2013 - Amends the Securities Exchange Act of 1934 to establish a liquidity pilot program for securities of emerging growth companies (EGC) 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, (2) a minimum increment of $0.10, or (3) the increment at which the securities would be quoted without regard to such minimum increments. Repeals the requirement for a Securities and Exchange Commission (SEC) study examining the transition to trading and quoting securities in one penny increments, known as decimalization. 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. Prescribes procedures for an EGC board of directors to elect either to opt out or to change the minimum increment. 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, $0.10, or another SEC-authorized increment. 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.
AI Summary
This bill, the Small Cap Liquidity Reform Act of 2013, aims to boost trading activity for smaller companies by establishing a pilot program that allows "emerging growth companies" (EGCs), defined as companies with less than $750 million in annual gross revenues, to choose different minimum price increments, or "tick sizes," for their stock. Instead of the standard minimum increment, EGCs can opt to quote their securities in $0.05 or $0.10 increments, or even the increment they would naturally use without these rules. The bill also repeals a previous requirement for the Securities and Exchange Commission (SEC) to study the transition to penny increments, known as decimalization. EGCs can elect to opt out of these new increments or change their chosen increment, with specific procedures for securities trading below $1.00 and provisions to protect issuers from liability for losses solely due to these new quoting and trading increments. The SEC is directed to require additional reports and disclosures from participating EGCs and to report biannually to Congress on the program's impact on liquidity and trading.
Committee Categories
Business and Industry, Housing and Urban Affairs
Sponsors (3)
Last Action
Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (on 02/12/2014)
Official Document
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