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H. Rept. 115-891 1 (2018-08-03)

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                   115TH CONGRESS                                     REPORT
                      2d Session    HOUSE OF REPRESENTATIVES          115-891





                   PROMOTING TRANSPARENT STANDARDS FOR CORPORATE
                                          INSIDERS ACT


                    AUGUST 3, 2018.-Committed to the Committee of the Whole House on the State
                                    of the Union and ordered to be printed


                      Mr. HENSARLING, from the Committee on Financial Services,
                                       submitted the following

                                          REPORT

                                        [To accompany H.R. 6320]

                            [Including cost estimate of the Congressional Budget Office]
                     The Committee on Financial Services, to whom was referred the
                   bill (H.R. 6320) to require the Securities and Exchange Commission
                   to carry out a study of Rule 10b5-1 trading plans, and for other
                   purposes, having considered the same, report favorably thereon
                   without amendment and recommend that the bill do pass.
                                       PURPOSE AND SUMMARY
                     On July 10, 2018, Representative Maxine Waters introduced
                   H.R. 6320, the Promoting Transparent Standards for Corporate
                   Insiders Act. The bill requires the U.S. Securities and Exchange
                   Commission (SEC) to conduct a study as to whether SEC Rule
                   10b5-1 should be amended, as further described below, and, if so,
                   to amend Rule 10b5-1, subject to notice and comment, in a manner
                   consistent with the results of such study.
                     Under Rule 10b5-1, directors and other major insiders of issuers
                   registered under the Securities Exchange Act of 1934 who have ac-
                   cess to material nonpublic information are able to establish a writ-
                   ten plan that details when they will be able to buy or sell shares
                   at a predetermined time on a scheduled basis. The bill requires the
                   SEC to consider whether certain types of amendments to Rule
                   10b5-1 would enhance the rule and directs the SEC to consider
                   certain factors, including how any such amendments to Rule 10b5-
                   1 would clarify and enhance existing prohibitions against insider
                   trading, the impact of any such amendments on attracting can-
                   didates for insider positions, the impact on capital formation, and
                      79-006

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