Enhancing Multi-Class Share Disclosures Act

IIB 118TH CONGRESS 1ST SESSION H. R. 2795 IN THE SENATE OF THE UNITED STATES MAY 31 (legislative day, MAY 30), 2023 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs AN ACT To amend the Securities Exchange Act of 1934 to require issuers with a multi-class stock structure to make certain disclosures in any proxy or consent solicitation material, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 02:46 Jun 01, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2795.RFS H2795 kjohnson on DSK79L0C42PROD with BILLS 2 HR 2795 RFS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Enhancing Multi-Class 2 Share Disclosures Act’’. 3 SEC. 2. DISCLOSURE RELATING TO MULTI-CLASS SHARE 4 STRUCTURES. 5 Section 14 of the Securities Exchange Act of 1934 6 (15 U.S.C. 78n) is amended by adding at the end the fol- 7 lowing: 8 ‘‘(l) DISCLOSURE RELATING TO MULTI-CLASS SHARE 9 STRUCTURES.— 10 ‘‘(1) DISCLOSURE.—The Commission shall, by 11 rule, require each issuer with a multi-class share 12 structure to disclose the information described in 13 paragraph (2) in any proxy or consent solicitation 14 material for an annual meeting of the shareholders 15 of the issuer, or any other filing as the Commission 16 determines appropriate. 17 ‘‘(2) CONTENT.—A disclosure made under 18 paragraph (1) shall include, with respect to each 19 person who is a director, director nominee, or named 20 executive officer of the issuer, or who is the bene- 21 ficial owner of securities with 5 percent or more of 22 the total combined voting power of all classes of se- 23 curities entitled to vote in the election of directors— 24 ‘‘(A) the number of shares of all classes of 25 securities entitled to vote in the election of di- 26 VerDate Sep 11 2014 02:46 Jun 01, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2795.RFS H2795 kjohnson on DSK79L0C42PROD with BILLS 3 HR 2795 RFS rectors beneficially owned by such person, ex- 1 pressed as a percentage of the total number of 2 the outstanding securities of the issuer entitled 3 to vote in the election of directors; and 4 ‘‘(B) the amount of voting power held by 5 such person, expressed as a percentage of the 6 total combined voting power of all classes of the 7 securities of the issuer entitled to vote in the 8 election of directors. 9 ‘‘(3) MULTI-CLASS SHARE STRUCTURE.—In this 10 subsection, the term ‘multi-class share structure’ 11 means a capitalization structure that contains 2 or 12 more classes of securities that have differing 13 amounts of voting rights in the election of direc- 14 tors.’’. 15 Passed the House of Representatives May 30, 2023. Attest: CHERYL L. JOHNSON, Clerk. VerDate Sep 11 2014 02:46 Jun 01, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2795.RFS H2795 kjohnson on DSK79L0C42PROD with BILLS