Editor's Note: this substitute amendment, and HR 1858 as amended, were both adopted by the House Commerce Committee's Finance Subcommittee by unanimous voice vote on July 21, 1999.
AMENDMENT TO H.R. 1858
OFFERED BY MR. OXLEY
Page 13, beginning on line 1, strike title II and insert the following:
TITLE II---SECURITIES MARKET INFORMATION
SEC. 201. MISAPPROPRIATION OF REAL-TIME MARKET INFORMATION.
Section 11A of the Securities Exchange Act of 1934 (15 U.S.C. 78k-1) is amended by adding at the end the following new subsection:
"(e) MISAPPROPRIATION OF REAL-TIME MARKET IN FORMATION.---
"(1) PROHIBITION AGAINST MISAPPROPRIATION---Subject to paragraphs (3), (4), and (5), any person who---
"(A) obtains directly or indirectly from a market information processor real-time market information, and
"(B) directly or indirectly sells, distributes or redistributes, or otherwise disseminates such real-time market information, without the authorization of the market information processor,
shall be liable to that market information processor for the remedies set forth in paragraph (2).
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"(2) CIVIL REMEDIES.
"(A) CIVIL ACTIONS.---Any person who is injured by a violation of paragraph (1) may bring a civil action for such a violation in an appropriate United States district court, except that any action against a State governmental entity may be brought in any court that has jurisdiction over claims against such entity.
"(B) TEMPORARY AND PERMANENT INJUNCTIONS.---Any court having jurisdiction of a civil action under this subsection shall have the power to grant temporary and permanent injunctions, according to the principles of equity and upon such terms as the court may deem reasonable, to prevent a violation of Paragraph (1).
" (C) MONETARY RELIEF.---When a violation of paragraph (1) has been established in any civil action arising under this subsection, the plaintiff shall be entitled to recover any damages sustained by the plaintiff.
"(D) DISGORGEMENT.---When a violation of paragraph (1) has been established, if the plaintiff is not able to prove recoverable damages to the full extent of the defendant's monetary [begin page 3] gain directly attributable to the violation, the court, in its equitable discretion, may order the defendant to disgorge the amount of such monetary gain to the plaintiff.
"(3) PERMITTED ACTS.---
"(A) GATHERING OR USE OF REAL-TIME MARKET INFORMATION INDEPENDENTLY OBTAINED.---Nothing in this subsection shall restrict any person from independently gathering real-time market information, or from redistributing or disseminating such independently gathered information.
"(B) NEWS REPORTING.---Nothing in this subsection shall restrict any news reporting entity from extracting real-time market information for the sole purpose of news reporting, including news gathering, dissemination, and comment, unless the extraction is part of a consistent pattern of competing with a market information processor in the distribution of real-time market information.
"(4) RELATIONSHIP TO OTHER LAWS.---
"(A) PREEMPTION.---Subject to subparagraphs (B), (C), and (D), on and after the date of enactment of this subsection, this section---
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"(i) shall exclusively govern the unauthorized extraction, sale, distribution or redistribution, or other dissemination of real-time market information; and
"(ii) shall supersede any other Federal or State law (either statutory or common law) to the extent that---
"(I) such other Federal or State law establishes rights and remedies with respect to the unauthorized extraction, sale, distribution or redistribution, or other dissemination of market information that are different from or in addition to the rights and remedies established by this subsection; or
"(II) such other Federal or State law is inconsistent with this section.
"(B) FEDERAL SECURITIES LAWS.---Nothing in this subsection shall be construed---
"(i) to limit or otherwise affect the application of any provision of the securities laws (as defined in section 3(a)(47)), or the rules and regulations thereunder; or
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"(ii) to impair or limit the authority of the Commission.
"(C) ANTITRUST.---Nothing in this subsection shall limit in any way the constraints that are imposed by Federal and State antitrust laws on the manner in which products and services may be provided to the public, including those regarding single suppliers of products and services.
"(D) LICENSING.---Nothing in this subsection shall restrict the rights of parties freely to enter into licenses or any other contracts with respect to the extraction, sale, distribution or redistribution, or other dissemination of real-time market information, and to maintain civil actions under State law to enforce such licenses or contracts.
"(5) LIMITATIONS ON ACTIONS.
"(A) CIVIL ACTIONS.---No civil action shall be maintained under this subsection unless it is commenced within one year after the cause of action arises or claim accrues.
"(B) ADDITIONAL LIMITATION.---No civil action shall be maintained under this subsection for the extraction, sale, distribution or redistribution, [begin page 6] or other dissemination of market information that is not real-time market information.
"(C) PERSONS SUBJECT TO CONTRACTUAL REMEDIES.---No civil action shall be maintained under this subsection by a market information processor against any person to whom such processor provides real-time market information pursuant to a contract or agreement between such processor and such person with respect to any real-time market information or any rights or remedies provided pursuant to such contract or agreement.
"(6) DEFINITIONS.---As Used in this subsection:
"(A) MARKET INFORMATION.---The term 'market information' means information---
"(i) with respect to quotations and transactions in any security; and
"(ii) the collection, processing, distribution, and publication of which is subject to this title.
"(B) REAL-TIME MARKET INFORMATION.---Taking into account the present state of technology, different types of market data, how market participants use market data, and other [begin page 7] relevant factors, the Commission may, consistent with the protection of investors and the public interest and with the objectives of this section, prescribe by rule the extent to which market information shall be considered to be real-time market information for purposes of this subsection.
"(C) MARKET INFORMATION PROCESSOR.---The term 'market information processor' with respect to any market information means the securities exchange, self-regulatory organization, securities information processor, or national market system plan administrator that is responsible under this title or the rules or regulations thereunder, for the collection, processing, distribution, and publication of, or preparing for distribution or publication, such market information.".
SEC. 202. EFFECTIVE DATE.
(a) IN GENERAL.---The amendment made by section 201 shall take effect on the date of the enactment of this Act, and shall apply to acts committed on or after that date.
(b) PRIOR ACTS NOT AFFECTED.---No person shall be liable under section 11A(e) of the Securities Exchange [begin page 8] Act of 1934 (15 U.S.C. 78k-1(e)), as added by Section 201 of this Act, for the extraction, sale. distribution or redistribution, or other dissemination of real-time market information prior to the date of enactment of this Act, by that person or by that person's predecessor in interest.