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Managing America: Banking & Finance

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Week Ending October 26, 2007

H.R.2868 To eliminate the exemption from State regulation for certain securities designated by national securities exchanges.

The bill reports explains that the Security Exchange Commission is responsible for enforcing securities laws and that each State also has laws governing securities that require security offerings to be registered in the State or exempt from registration requirements. The process of coordinating State regulations with Federal regulations is considered burdensome. A 1996 law intended to realign the regulatory partnerships between State and Federal regulations and so eliminate those burdens and costs. The law preempts State laws over securities listed on the NYSE, AMEX and Nasdaq under certain conditions

A process through which exchanges can develop tier ratings for securities that are exempt from State regulations is expanded under this bill that allows the exchanges to develop those additional tiers of listing standards contingent on SEC approval and, therefore, allow those companies to be State regulated and listed. Companies affected by the bill would be small, less-capitalized companies that do not currently meet the standards required to be listed. The goal is to develop domestic markets for smaller companies that do not meet higher primary market listing standards and to allow the exchanges to compete more effectively on the global market.

Sponsor:  Rep. Gregory Meeks (D-NY-6^th)

Vote: Passed House by voice vote October 23, 2007

Cost to the taxpayers: “CBO estimates that implementing H.R. 2868 would have an insignificant effect on the federal budget”

Earmark Certification:  

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