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

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 6513) to amend the Federal securities laws to enhance the effectiveness of the Securities and Exchange Commission's enforcement, corporation finance, trading and markets, investment management, and examination programs, and for other purposes, as amended.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on this legislation and insert extraneous material thereon.

Mr. Speaker, I yield myself such time as I may consume.

(Mr. KANJORSKI asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I rise today in support of H.R. 6513, the Securities Act of 2008.

This commonsense legislation enjoys broad bipartisan support. H.R. 6513 will also better protect investors, promote greater confidence in our capital markets at a crucial time, as investor anxieties persist because of this ongoing financial turmoil.

Additionally, H.R. 6513 increases the effectiveness of the Securities and Exchange Commission by strengthening its enforcement authority.

The current economic woes have once again highlighted the need for the Congress to vest regulators with the authority they need to keep markets balanced and their participants honest. The Securities Act of 2008 thus provides the commission with many of the important regulatory tools that it has sought as part of its annual authorization requests in recent years.

In particular, the commission's enforcement program will benefit greatly from the provisions authorizing the nationwide service of subpoenas and the imposition of collateral bars. These provisions respectively will allow the commission to allocate its funds more efficiently and prevent bad actors from re-entering other parts of the industry.

Securities Exchange Chairman Cox has expressed a letter of his support for this legislation to implement the commission's recommendations. Chairman Cox has also commended the Financial Services Committee's bipartisan leadership in developing this bill. The North American Securities Administrators Association has also endorsed this bill by noting that now is the time to strengthen securities regulation, given what has happened on Wall Street in recent years.

In addition to updating the Federal securities laws by making numerous technical corrections, this bill improves investor protection in at least three other ways.

First, it provides greater clarity about the commission's authority to impose sanctions on and seek remedies from individuals who violated the law but who are no longer associated with a regulated entity.

Second, the bill conforms the language of the law to existing interpretations about when unlawful margin lending occurs.

Third, this bill helps investors by extending the insurance provided by the Securities Investor Protection Corporation to securities futures held within their portfolio. As a result, this bill enhances the competitiveness of the U.S. markets by advancing portfolio-based margining for the customers of broker-dealers.

Capital flows to the most efficient markets, and because most financially developed countries allow this risk-based, investor protection hedging practice, the U.S. equity markets simply must keep pace to compete in today's global economy by allowing it as well.

As per my earlier unanimous consent request, I am inserting in the Congressional Record a more detailed statement about these three important investor protection measures in order to provide greater legislative history on them.

Before closing, I should note that previously the House has unanimously passed during the 110th Congress several of the provisions contained in this larger reform package. Moreover, this bill has strong bipartisan support, and my colleagues on both sides of the aisle therefore deserve tremendous credit for working together on this legislation. In particular, the gentleman from New York (Mr. Meeks), the gentleman from Illinois (Mr. Roskam), the gentleman from Kentucky (Mr. Davis), and the gentleman from California (Mr. Campbell) have worked diligently on many of these provisions in this bill. I appreciate their prior efforts and their support as cosponsors of this larger legislative package.

The chairman, Mr. Frank, and the ranking member, Mr. Bachus, of the Financial Services Committee, in addition to my ranking member (Ms. Pryce) on the Capital Markets Subcommittee all support this bill.

Our cooperative effort on this bill illustrates that good policy can emerge from this body when ideology and partisanship yield to practicality and the common good.

I would just like to comment that that sentence represents the career, to some extent, of Ms. Pryce. Ms. Pryce is joining us on the floor today, possibly for the last time in her congressional career. She has been my chairman and my ranking member as my career through Congress has occurred. Deborah knows that when I first heard of her intentions to retire, I was greatly saddened, because this body will be losing an individual on either side of the aisle who has been most cooperative, most nonpartisan, and most productive as a legislator of anyone I can remember in my years here in this body.

I wish her well in her retirement. I know it will only be a retirement in terms of leaving the Congress, not leaving active, productive, and contributing life in another form in Ohio or somewhere else. But we will miss you on the committee, on the subcommittee, and in this Congress, Ms. Pryce.

In sum, I urge all my colleagues to vote ``yes'' on H.R. 6513.

Mr. Speaker, I rise today to express further support for the Securities Act of 2008, to explain why this legislation confirms certain existing authorities of the Securities and Exchange Commission, and to provide for the legislative history some background on the facts that informed the drafting of this bill.

In regard to section 3 on Formerly Associated Persons in H.R. 6513, many provisions of the Federal securities laws that authorize the sanctioning of a person who engages in misconduct while associated with a regulated or supervised entity explicitly provide that such

authority exists even if the person is no longer associated with that entity.

Several provisions, however, do not explicitly address this issue, although the intent of earlier Congresses appears to have been that the Securities and Exchange Commission had such authority, and no contrary statutory language or legislative history exists. In fact, the Congress has earlier amended several statutory provisions to ratify and confirm the authority of the Commission to discipline a person formerly associated with a regulated entity for conduct while an associated person, but it did not express intent to provide such authority only for those provisions being amended.

To build on these previous efforts, section 3 of H.R. 6513 amends additional provisions of the securities laws that do not explicitly address this issue. These changes confirm that the Commission may sanction or discipline persons who engage in misconduct while associated with a regulated or supervised entity, even if they are no longer associated with that entity. Accordingly, the amendments would not alter or expand the Commission's current authority. They would only ratify and confirm it.

As a general rule, it is the intent of the Congress that the securities laws, including but not limited to those provisions amended by this section, apply to and provide meaningful remedies for sanctioning persons who engage in misconduct while associated with a regulated or supervised entity, even if the person is no longer associated with that entity.

Also, the Capital Markets Efficiency Act of 1996 inter alia exempted from Federal margin requirements, adopted under section 7 of the Securities Exchange Act of 1934, credit extended, maintained, or arranged to or for a member of a national securities exchange or registered broker-dealer under certain circumstances. In the portion of section 7 that was not substantively amended by the Capital Markets Efficiency Act, the word ``and'' was inserted, which could be read to mean that margin lending would be unlawful only if both elements of the pre-existing prohibitions were violated, when prior to the Capital Markets Efficiency Act violation of either prong was sufficient to make such margin lending unlawful.

Specifically, the first prong, section 7(c)(1)(A), states that margin lending is unlawful if done in contravention of the Federal Reserve Board's rules, and the second prong, section 7(c)(1)(B), states that margin lending is unlawful without collateral or on any collateral other than securities, except in accordance with the Federal Reserve Board's rules. The proposed change would clarify that a violation of either prong remains sufficient to establish a cause of action for improper margin lending. This technical drafting amendment contained in section 7 of H.R. 6513 conforms the statutory language of section 7 of the Exchange Act to existing interpretations that provide that the two clauses represent independent requirements.

Additionally, section 8 of H.R. 6513 would amend the Securities Investor Protection Act of 1970 to extend Securities Investor Protection Corporation insurance to futures positions held in a portfolio margining account under a program approved by the Commission. In paragraph (b)(2)(B)(iii) of this section, the word ``such'' refers to those securities positions described in paragraphs (b)(2)(A) and (b)(2)(B)(ii). The purpose of paragraph (b)(2)(B)(iii) is to extend protection to any person who has a claim against the debtor arising out of sales or conversions of securities described in either paragraph. Any claims for security futures under this section are claims for cash and not for a ``security.'' In addition, ``security futures contract'' as used in this section has the same meaning as ``security future'' as defined in 15 USC 78111 (14).

With this additional legislative history in mind, I will vote for this bill. I urge my colleagues to do the same.

I reserve the balance of my time.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, let me at the outset thank my colleague from New York (Mr. Meeks) without whom this legislation would not be possible. As he has mentioned, while we are on opposite sides of the aisle, we share the common goal of ensuring that the U.S. remain the envy of the world when it comes not just to capital markets but also the place where people can come, investors can come, entrepreneurs can exist and find capital and make this country even better and stronger.

Of course, we share the common purpose of representing the greatest city in the world, New York, which has always been and shall continue to be the financial capital of the world. I would also like to thank the chairman of the committee, Mr. Frank, and especially the ranking member, Mr. Bachus, for bringing this bill to the floor, again, without whom this would not be possible.

Over the past year or more there has been a new and rightly placed focus on the competitiveness of the United States capital markets. As emerging international markets continue to grow, the natural and historical attraction to the U.S. capital markets has given way to the considerations of a broader scale. In short, the U.S. is no longer the only game in town.

Over the past several years, as my good friend Mr. Meeks has indicated, several reports have been published that argue the regulatory and legal environment in the U.S. serve as negative considerations when market participants choose where to raise capital or headquarter a global business. With new markets popping up across the globe, investors and businesses now have more options, and increasingly we are seeing them choose alternatives to the U.S., such as Hong Kong, Singapore, and London.

We have seen an increasing number of U.S. companies, in particular small companies, raise capital on foreign exchanges, in particular, London's Alternative Investment Market, or, as known commonly, AIM. Clearly, the United States remains the global financial leader. Overall, I believe we can be optimistic about the future growth and success of the American capital markets. However, in a constantly evolving and ever-innovative global marketplace, we cannot take our leadership for granted, nor ignore indicators that the U.S. competitive edge is diminishing. As lawmakers, we have a critical responsibility to ensure the U.S. remains at the forefront of the financial markets.

Strong capital markets are not a success realized by Wall Street and investment bankers exclusively. Strong markets mean jobs, economic growth and retirement security for people across the United States. We cannot control the evolution of overseas markets or their ability to compete in a global marketplace, nor should we want to. What we can control, however, is our ability to respond and to adapt to changing circumstances with innovation and flexibility that will allow our markets and market-makers to maintain their competitive edge.

This bill, the Small Cap Competitive Listing Act, is an important and reasonable step toward achieving that goal. In order to compete in an increasingly global and highly competitive marketplace, exchanges both domestic and international have developed additional listing tiers, with lower listing standards to expand opportunities for

smaller companies. Particularly for small cap companies, an opportunity to list on a developmental tier is an important component to their ability to raise the capital necessary to grow their business and to continue to innovate.

Mr. Speaker, in 1996, Congress passed the National Securities Market Improvement Act in an effort to streamline the regulatory process and eliminate duplication. Common sense. This act included an important provision that granted preemption from State security regulation to the national exchanges: the New York Stock Exchange, NASDAQ, and the American Stock Exchange. Because these listings were national in scope on the major U.S. exchanges, Congress deferred regulation to the Securities and Exchange Commission. However, as the markets have evolved, that legislation has created a legislative barrier to the establishment of developmental tiers on national exchanges.

Because developmental tiers have less stringent listing standards, securities offered on those exchanges should in fact be subject to State regulatory oversight in addition to the SEC oversight. The legislation provides the national exchanges a legislative pathway that currently exists for regional domestic exchanges and foreign exchanges to offer a marketplace for small cap companies. By allowing the national exchange to establish this new tier, it will grant small cap companies a new alternative to London's AIM market and to other marketplaces that may be less regulated and less transparent.

This legislation represents sound policy. It puts all of our domestic exchanges on equal footing and removes a roadblock to progress. In addition, the bill represents an important approach to addressing American competitiveness. It grants the flexibility to develop new offerings without creating a regulatory race to the bottom. These new tiers would be subject to State security regulations, and any proposed new listing will be subject to oversight and approval from the SEC. Additionally, investor protections are upheld. As public companies, small cap companies seeking to list on a developmental tier will be required to fully comply with U.S. securities laws.

Let me just say in closing, Mr. Speaker, I want to thank Mr. Meeks. We here in Congress, regardless of our party affiliation or where we are from, know that this country is the engine of the world, and we want to keep it such. We understand that financial markets, in particular the securities industry, is a vital component of our national economy.

And it is not just about Wall Street. As mentioned, many of us, whether you are from Queens, Brooklyn or Staten Island, many of our constituents benefit from a vibrant financial service industry. Much of that tax revenue disproportionately in New York City goes to fund schools and parks and roads. This is just a small way in which we can maintain that competitive edge, give entrepreneurs and small companies the opportunity to access our capital markets, put us on equal footing to compete with London's AIM and other emerging market exchanges across the world, and understand that the American people, the American businessman and woman, can compete with anyone if given the tools and the barriers are diminished.

Mr. Speaker, I have no speakers. Mr. Meeks, thank you very much. As well, I would like to add my thanks to his staff and that of Mr. Frank, Mr. Bachus, and on my staff, Ryan McKee, and urge my colleagues to adopt the underlying legislation.

With that, I yield back the balance of my time.

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 2868) to eliminate the exemption from State regulation for certain securities designated by national securities exchanges, as amended.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on this legislation and to insert extraneous material thereon.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I have been a major advocate of making sure that America maintains its global competitive edge whether it is in business or human development. America must stay at the forefront of innovation, productivity and expertise. No matter how economically, militarily or culturally strong a Nation has become, it will certainly begin its decline when it rests on the laurels of its past accomplishments and ceases to stay ahead of the competition.

H.R. 2868 was introduced by me and my good friend and colleague from New York, Vito Fossella, toward the goal of maintaining America's competitive business advantage. Although Mr. Fossella and I may be on opposite sides of the aisle, we stand in the same space when it comes to our support for American businesses and American markets.

Recently, Mayor Michael Bloomberg of New York City and Senator Charles Schumer commissioned a study on ``Sustaining New York's and the U.S.'s Global Financial Services Leadership.'' In the executive summary of that study, it states, ``The U.S. financial markets, with New York at the center, are still the world's largest and are among the most important by many measures.''

The United States is home to more of the world's top financial services institutions than any other country. Six of the top 10 financial institutions by market capitalization are based in the New York area, and U.S.-based firms still head the global investment banking revenue rankings.

In terms of global financial stock, the United States remains the largest market, well ahead of Europe, Japan and the rest of Asia, although the financial stock in other regions is now growing faster than it is here in the United States. The United States generates more revenues from financial services than any other region. But once again, the rest of the world is challenging that leadership in a hotly contested investment banking and sales and trading markets.

To sum up that paragraph with a phrase that Satchel Paige is known for: ``Don't look back. Someone might be gaining on you.''

To further quote the study, the study says: ``The choice of venue for IPOs offers the most dramatic illustration of the interplay between these factors. The world's corporations no longer turn primarily to stock exchanges in the United States, such as the New York Stock Exchange or NASDAQ, to raise capital internationally.'' It continues to say: ``The IPO market offers other examples of jurisdictional arbitrage working against the United States, with very small-cap companies in the United States increasingly favoring London's Alternative Investment Market over NASDAQ,'' and I add here the American Stock Exchange. ``American private equity firms are choosing to list on European exchanges.''

Mr. Speaker, in this study, leading financial services executives who were interviewed indicated that ``the legal environment and regulatory framework in particular were critical to potential issuers considering whether to enter the U.S. markets.'' The implementation of Sarbanes- Oxley was part of the United States regulatory framework that was cited as a concern for issuers in considering the markets in which they would list.

This is why earlier this year I introduced H.R. 1508, the COMPETE Act of 2007, to improve the implementation of section 404 of Sarbanes- Oxley. My office has worked closely with the PCAOB and the SEC to review and discuss the regulatory reforms of SOX. We hope it will improve the implementation of the law.

Toward continuing my efforts to improve our regulatory environment, H.R. 2868 will make a technical change to the 1996 National Securities Market Improvement Act that would allow the American Stock Exchange and NASDAQ to offer a tier 2 level listing if they so choose. This would allow these exchanges to compete more directly with the London Alternative Investment Market and the Toronto Stock Exchange. It will help us keep our competitive advantage and lead.

Mr. Speaker, I would also like to thank Chairman Frank for moving this bill through the committee. I would also like to give special thanks to my cosponsor, Mr. Fossella, for the work of his office, particularly Ryan McKee. I also want to thank Lawranne Stewart and Deborah Silberman of Mr. Frank's staff, and of course Mr. Jameel Johnson, my chief of staff.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, again, I would like to thank Mr. Fossella for all of his hard work, because that is what we are talking about. We are talking about basically the backbone of America has always been its small businesses. So when we have these firms, we want them to invest and grow their businesses right here in the United States of America.

It makes great sense, because as they are investing and expanding their businesses, it creates jobs for Americans. When you look at the services, the financial services in particular, that is where the jobs are being created, that is where we are the most competitive, and that is where we have got to stay and keep our competitive edge. It makes great sense for us to make sure that tomorrow continues to be the great day for our financial services industry, because it is the key to the economic security, as well as to the jobs of tomorrow for many of our young people.

Mr. Speaker, I urge all of my colleagues to vote for this bill. It makes great sense, and it helps us maintain the competitive edge and helps us maintain being the financial capital of the world.

Mr. Speaker, I yield back the balance of my time.

I yield myself such time as I may consume.

Please let me begin by thanking my chairman for those very, very kind, overly kind remarks. I will miss working with him and on this committee. It has been a wonderful experience for me, and working in a bipartisan, nonpartisan way with Chairman Kanjorski and others on the committee has been an experience that I will always value. So, thank you, sir.

Mr. Speaker, I rise in support of H.R. 6513, the Securities Act of 2008. This legislation before us today is a commonsense, bipartisan bill developed by Chairman Kanjorski, Chairman Frank, Ranking Member Bachus, and myself.

The bill enhances investor protection, capital market competitiveness, makes the SEC a more effective agency, and the legislation makes our regulation and standards setter, the SEC, more accountable to the capital markets.

H.R. 6513 would enact components of the Securities and Exchange Commission's legislative requests submitted to Congress in both 2007 and 2008. The bill also amends the Securities Investor Protection Act, or SIPA, to allow investors to hold all equity-related positions in a single portfolio margin account. The SIPA amendment creates a clear pathway for regulators to follow in order to realize the state-of-the- art portfolio-based margining system for customers of broker-dealers.

The SIPA amendment would enhance the competitiveness of U.S. markets and eliminate inefficiencies in our current regulatory regime that put U.S. firms and customers at a competitive disadvantage internationally.

Mr. Speaker, this bill also includes bills passed by the House last year under suspension, including H.R. 755, introduced by Representative Geoff Davis, benefiting investors by increasing the usability of financial reports and ensuring that financial regulators are committed to meaningful and clear disclosures; H.R. 2868, by Representatives Meeks and Fossella, allowing U.S. exchanges to create listing tiers for smaller companies. This is a welcome tool to promote our capital markets as well as attract and retain investment capital in the United States. And H.R. 3505, by Representative Peter Roskam, which makes technical corrections to the Federal securities laws, making sure our securities laws are unambiguous, grammatically correct, and current.

The SEC endorsed this legislation, as did the North American Securities Administrators Association and a large coalition of U.S. exchanges. In this time of tumult in our marketplaces in this country and elsewhere, it is appropriate legislation.

In closing, Mr. Speaker, I want to thank Kevin Edgar, Todd Harper, and Jason Pitcock from the Capital Market Subcommittee staff; Peter Roberson, Deborah Silberman, and Lawranne Stewart from Chairman Frank's staff for all their hard work on this legislation, as well as Peter Freeman from my staff.

I urge my colleagues to support the Securities Act of 2008. I thank the chairman once again for his kind words.

I yield back the balance of my time.

Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.

Mr. Speaker, I rise today in support of H.R. 2868, bipartisan legislation that would enhance the competitiveness of U.S. capital markets by allowing exchanges to establish developmental tiers to expand listing opportunities in the U.S. for smaller companies.

H.R. 2868 would remove the barrier to creating developmental listing tiers on several of the major exchanges in the U.S. by amending Section 18 of the National Securities Markets Improvement Act (NSMIA). Under the bill, all securities listed on a developmental tier would be subject to Securities and Exchange Commission (SEC) oversight and state blue-sky regulations in an effort to uphold investor protections.

Right now, the inability to develop an additional, developmental tier can be a significant impediment to an exchange's ability to compete in the global marketplace. These barriers make our markets less competitive for small cap listings and can drive companies to list outside the United States.

London's Alternative Investment Market (AIM) for example, is attracting capital worldwide and recruiting U.S. IPO's. According to a recent International Herald Tribune report, companies listed on London's AIM raised $30 billion in capital in 2006. The exchange has tripled its number of listed companies to 1,640 since 2000, with about one-third of them international. A total of 63 companies worth about $11 billion are from the United States--the highest representation on