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H.R. 2131 (104th): Capital Markets Deregulation and Liberalization Act of 1995

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The summary below was written by the Congressional Research Service, which is a nonpartisan division of the Library of Congress.

7/27/1995--Introduced. Capital Markets Deregulation and Liberalization Act of 1995 - Amends the Securities Exchange Act of 1934 to include among the prerequisites to registration as a national securities exchange or association that the rules of the organization will not confer responsibility upon a broker or dealer for the investment decisions of an institutional client unless an agreement in writing has been executed to that effect. (Sec. 2) Establishes a rebuttable presumption that a broker or dealer is not liable for the investment decisions of an institutional client. (Sec. 3) Amends the Securities Act of 1933 to exempt securities offerings, with specified exceptions, from State law. Amends the Securities Exchange Act of 1934 to exempt persons registered with the SEC, with specified exceptions, from State law governing: (1) registration, licensing, or qualification requirements; or (2) broker or dealer capital, records, or financial reporting requirements that differ from SEC requirements. Permits State registration, licensing, and qualification requirements (including fees) if: (1) the State performs its procedures though a central registration depository system operated by a national securities association; and (2) the State's requirements are substantially similar to the registration requirements of the Securities and Exchange Commission (SEC), and do not conflict with them. Amends the Investment Company Act of 1940 and the Investment Advisers Act of 1940 to grant the SEC exclusive jurisdiction over all securities, attendant transactions, and persons to whom such Acts apply. (Sec. 4) Amends the Securities Exchange Act of 1934 to repeal the statutory percentage formula for margin requirements. Exempts certain excluded accounts from margin requirements. Precludes a national securities exchange or association from imposing any limitation upon the extension of credit more restrictive than that imposed by the Board of Governors of the Federal Reserve System (the Board). Repeals the restrictions on borrowing placed upon a securities broker or dealer relating to the use of credit to finance securities transactions in the ordinary course of business. Repeals the exemption of mortgage and small business related securities whose delivery is delayed for bona fide reasons from the proscription against broker-dealer extensions of credit to purchase securities with which the broker-dealer has specified connections. Grants the SEC exemption authority with respect to credit restrictions governing securities transactions. (Sec. 5) Repeals the disclosure requirements placed upon: (1) a five percent equity shareholder; (2) the purchase by an issuer of its own securities in compliance with SEC rules to prevent fraud, deception, or manipulation; (3) the making of a tender offer by a party who would consequently become a more than five percent shareholder; and (4) certain persons subsequently designated as majority directors as a result of such tender offer. Repeals the mandatory fee structure for the filing of preliminary proxy materials. (Sec. 6) Amends the Securities Act of 1933 to: (1) remove securities sale confirmations from the meaning of "prospectus"; and (2) modify the requirement that a prospectus be delivered to a purchaser or prospective purchaser of securities, to require delivery only if requested. Grants the SEC exemptive authority with respect to the prospectus delivery requirement. (Sec. 7) Increases from $5 million to $15 million the maximum asset-size of public offerings which may be exempted from the Act's purview. Revises the SEC's exemptive authority regarding registration requirements. (Sec. 8) Amends specified securities laws to direct the SEC to consider whether an action will promote efficiency, competition, and capital formation whenever it is required to consider the impact of an action upon consumer protection. (Sec. 9) Amends the Securities Exchange Act of 1934 to reduce SEC membership from five to three commissioners. (Sec. 10) Directs the SEC to request, by public notice, proposals for the privatization of the EDGAR system. (Sec. 11) Amends the Securities Exchange Act of 1934 to modify the timetable for public notice of a proposed rule change by a self-regulatory organization. (Sec. 12) Instructs the SEC to designate a self-regulatory organization as its examining authority for each registered broker or dealer. (Sec. 13) Amends the Securities Act of 1933 to exclude certain press conferences, press releases, and certain meetings with issuer press spokespersons (including meetings with journalists for on-line services) from the definition of: (1) "offer to buy"; and (2) prospectus. (Sec. 14) Repeals the Trust Indenture Act of 1939.