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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9709 Introduced in House (IH)]
<DOC>
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.''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
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