text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Spread Pricing Liquidity Act of 
  2013''.
  
  SEC. 2. TICK SIZE FOR CERTAIN ISSUERS.
  
      (a) In General.--Section 11A(c)(6) of the Securities Exchange Act 
  of 1934 (15 U.S.C. 78k-1(c)(6)) is amended to read as follows:
              ``(6) Tick size for certain issuers.--
                      ``(A) Selection.--
                              ``(i) In general.--The board of directors 
                          of an issuer with a public float of 
                          $500,000,000 or less (based on a rolling 
                          average over the course of the preceding 3-
                          month period) and an average daily trading 
                          volume of less than 500,000 shares may select 
                          to have the securities of the issuer quoted and 
                          traded using an increment of either $0.05 or 
                          $0.10.
                              ``(ii) Manner of selection.--A selection 
                          under this subparagraph shall be made by 
                          informing the Commission and each exchange on 
                          which the securities of the issuer are quoted 
                          or traded.
                              ``(iii) Limitation on certain issuers.--
                          With respect to the average trading price in 
                          the most recent 1-month period for the 
                          securities of an issuer--
                                      ``(I) if such average price is less 
                                  than $1, the issuer may not make the 
                                  selection under this subparagraph; and
                                      ``(II) if such average price is $1 
                                  or more, but less than $2, the issuer 
                                  may only select to have the securities 
                                  of the issuer quoted and traded using 
                                  an increment of $0.05.
                              ``(iv) Consultation.--In making a selection 
                          under this subparagraph, the board of directors 
                          shall first consult with the issuer's primary 
                          listing market.
                      ``(B) Trading requirements.--If an issuer has made 
                  the selection under subparagraph (A)--
                              ``(i) all quotes of the securities of such 
                          issuer shall be done using only the increment 
                          selected;
                              ``(ii) an exchange on which the securities 
                          of such issuer are traded may not charge a fee 
                          for a person engaging in such a trade, unless 
                          such fee is uniform for all trades and based 
                          solely on the number of shares traded; and
                              ``(iii) such selection shall not prevent 
                          the securities of the issuer being traded at 
                          increments other than the increment selected.
                      ``(C) Right to opt out of selection.--
                              ``(i) In general.--An issuer that has made 
                          the selection under subparagraph (A) may choose 
                          to opt out of such selection at any time after 
                          the 6-month period beginning on the date such 
                          selection was made.
                              ``(ii) Manner of opt out.--An issuer that 
                          chooses to opt out of the selection under 
                          subparagraph (A) shall do so by informing the 
                          Commission and each exchange on which the 
                          securities of the issuer are quoted or traded.
                              ``(iii) Future selection.--Subject to 
                          subparagraph (D), an issuer that opts out of 
                          the selection under subparagraph (A) may make 
                          the selection under subparagraph (A) again at 
                          any time after the 1-year period beginning on 
                          the date of the opt out.
                      ``(D) Treatment of issuers surpassing cap.--If the 
                  public float of an issuer that has made the selection 
                  under subparagraph (A) rises above $500,000,000 (based 
                  on a rolling average over the course of a 3-month 
                  period) or the average daily trading volume of the 
                  issuer raises above 500,000 then, after the end of the 
                  3-month period beginning on the date of such 
                  occurrence--
                              ``(i) the issuer shall no longer be 
                          considered to have made the selection under 
                          subparagraph (A); and
                              ``(ii) the issuer shall be ineligible to 
                          make a selection under subparagraph (A) during 
                          the 2-year period beginning after the end of 
                          such 3-month period, regardless of the issuer's 
                          public float or average daily trading volume.
                      ``(E) Study and report.--
                              ``(i) In general.--Not later than the end 
                          of the 9-month period beginning on the date of 
                          the enactment of this paragraph, and annually 
                          thereafter, the Commission shall carry out a 
                          study of the quoting and trading of securities 
                          in increments of $0.05 and $0.10 permitted by 
                          this paragraph, and the extent to which such a 
                          system is increasing liquidity by incentivizing 
                          capital commitment, research coverage, and 
                          brokerage support.
                              ``(ii) Report to congress.--Upon the 
                          completion of each study described under clause 
                          (i), the Commission shall issue a report to the 
                          Congress containing all of the findings and 
                          determinations made in carrying out such study, 
                          along with any legislative recommendations the 
                          Commission may have.
                      ``(F) Definitions.--For purposes of this paragraph:
                              ``(i) Average daily trading volume.--With 
                          respect to a security, the term `average daily 
                          trading volume' means the average, over the 
                          previous 3-month period, of--
                                      ``(I) the aggregate daily volume 
                                  for bids made on the security within 
                                  the price band; and
                                      ``(II) the aggregate daily volume 
                                  for offers made on the security within 
                                  the price band.
                              ``(ii) Price band.--With respect to a 
                          security, the term `price band' means the range 
                          between the price that is 25 cents below the 
                          trading price of the security and the price 
                          that is 25 cents above the trading price of the 
                          security.
                              ``(iii) Public float.--The term `public 
                          float' means the amount of equity of an issuer 
                          that is held by persons who are not affiliated 
                          with the issuer, determined by multiplying the 
                          number of shares of such stock by the price of 
                          one of such shares.''.
      (b) Effective Date.--
              (1) In general.--Section 11A(c)(6) of the Securities 
          Exchange Act of 1934, as amended by subsection (a), shall take 
          effect--
                      (A) with respect to an issuer with a public float 
                  of $100,000,000 or less (based on a rolling average 
                  over the course of the preceding 3-month period) and an 
                  average daily trading volume of less than 100,000, on 
                  the date of the enactment of this Act;
                      (B) with respect to an issuer that is not described 
                  under subparagraph (A) and that has a public float of 
                  $250,000,000 or less (based on a rolling average over 
                  the course of the preceding 3-month period) and an 
                  average daily trading volume of less than 250,000, 
                  after the end of the 3-month period beginning on the 
                  date of the enactment of this Act; and
                      (C) with respect to an issuer that is not described 
                  under subparagraph (A) or (B) and that has a public 
                  float of $500,000,000 or less (based on a rolling 
                  average over the course of the preceding 3-month 
                  period) and an average daily trading volume of less 
                  than 500,000, after the end of the 6-month period 
                  beginning on the date of the enactment of this Act.
              (2) Definitions.--For purposes of this subsection, the 
          terms ``average daily trading volume'' and ``public float'' 
          have the meaning given those terms, respectively, under section 
          11A(c)(6)(F) of the Securities Exchange Act of 1934.
target: Spread Pricing Liquidity Act of 2013 - Amends the Securities Exchange Act of 1934 concerning the national market system for securities to authorize the board of directors of an issuer with a public float of $500 million or less to select to have the issuer's securities quoted and traded using an increment (tick) of either $0.05 or $0.10. Prohibits selection of the $0.05 tick unless the average trading price in the most recent 1-month period for the securities of an issuer is between $1 and $2. Limits the tick selection to $0.05 for the issuer of any such security.   Prescribes trading requirements. Permits a issuer that has made the selection under this Act to choose to opt out at any time after the six-month period beginning on the date the selection was made. States that, if the public float of an issuer that has made such a tick selection rises above $500 million (based on a rolling average over the course of a 3-month period), or its average daily trading volume rises above $500 million, then after the end of the 3-month period beginning on the date of such occurrence the issuer: (1) shall no longer be considered to have made the tick selection; and (2) shall be ineligible to make such a tick selection for 2 years after such 3-month period. Directs the Securities and Exchange Commission (SEC) to study the quoting and trading of securities in increments of $0.05 and $0.10, and the extent to which such system increases liquidity by incentivizing capital commitment, research coverage, and brokerage support.
feat_title: Spread Pricing Liquidity Act of 2013