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Randy H.
Republican IL 14

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  • National Securities Exchange Regulatory Parity Act of 2016

    by Representative Randy Hultgren

    Posted on 2016-07-12

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    HULTGREN. Mr. Speaker, I rise today in support of the National Securities Exchange Regulatory Parity Act of 2016. I want to thank the chairman of the Foreign Affairs Committee, Mr. Royce, for introducing this legislation.



    [[Page H4686]] I am a proud cosponsor. I was also excited to see a very strong bipartisan vote of support in the Financial Services Committee.

    {time} 1445 This is a simple technical fix to a 20-year-old statute that didn't foresee, or at least didn't contemplate, an increase in the number of exchanges and today's competitive market structure.

    In 1996, Congress enacted the National Securities Markets Improvement Act, which codified the blue sky exemption for companies listed on the three predominant listed venues of that time: the New York Stock Exchange, the American Stock Exchange, and the NASDAQ. The blue sky exemption means securities will not be subject to both State and Federal regulation, which can be redundant and overly burdensome.

    Currently, exchanges not enumerated by the Act must have ``substantially similar'' listing standards as those that are specifically named in the Act. This puts these exchanges in an unnecessary, government-created, competitive disadvantage. It functionally prevents a handful of exchanges from being a first mover in adopting innovative listing standards.

    The unintended consequences of Congress' amendment to include specific references to just a few exchanges is a two-tiered regulatory structure and is unfair to exchanges that have since registered with the SEC.

    According to the Chicago Stock Exchange, it is not currently a primary listing exchange for any securities, ``in part because such securities would be subject to both Federal and State regulation, which is prohibitively costly and overly burdensome to potential listing companies. This change would remove this current impediment to companies listing their securities on CHX and would help in the exchange's efforts to develop a robust primary listing market here in Illinois.'' Furthermore, this legislation would benefit the options industry, which has its home in Chicago as well. The Chicago Board Options Exchange is the largest market for stock options. Why should one of the most innovative and respected markets have to jump through unnecessary hurdles to update its listing standards? We should not have artificial impediments to accessing the capital markets.

    I urge all my colleagues to oppose this commonsense legislation.

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