# What This Bill Does

This bill creates a special exemption for trusts that compensate victims of major disasters. When a natural disaster strikes and causes widespread damage, courts sometimes set up compensation trusts to distribute money to people and businesses affected by the disaster. This bill says that these large victim compensation trusts—specifically ones helping more than 50,000 people or organizations—don't have to follow certain federal stock trading rules that normally apply to most investors.

The rule they're being exempted from is called "Section 16" of the Securities Exchange Act. This rule requires certain people and organizations to report their stock trades to the government and follow strict limits on how quickly they can buy and sell company stock. The idea behind Section 16 is to prevent people with inside information from unfairly profiting off stock trades. However, victim compensation trusts aren't trying to make profits from insider knowledge—they're trying to invest money to pay out to disaster victims. The bill recognizes this difference and says these trusts shouldn't have to jump through the same regulatory hoops as regular investors or corporate insiders.

In practical terms, this means if a major hurricane, earthquake, or other disaster happens and a court sets up a trust to help thousands of affected people, that trust can manage its investments more flexibly without having to file special reports every time it buys or sells stock. This could help the trust operate more efficiently and get compensation to victims faster. The exemption only applies to large trusts helping more than 50,000 people, so it's specifically designed for major disasters affecting many people across a wide area.

To exempt transactions by certain victim compensation trusts from the application of section 16 of the Securities Exchange Act of 1934, and for other purposes.

Thompson, Mike

 <p>This bill exempts from securities filing requirements transactions made by a court-approved victim compensation trust established for the benefit of more than 50,000 individuals and entities impacted by one or more natural disasters.</p>