HB 18-38: Young Traders Act (Passed)

[Esteemed Jimmy]

Young Traders Act

To open the stock market to the youth.

Section 1. Short title

This Act shall be cited as the “Young Traders Act”.

Section 2: Lowering the age to buy stocks

(a) In general. -

The minimum age to open a special youth stock market account shall be lowered to 16.

(b) Restrictions. -

(1) A youth stock market account will not have full function of purchasing and will only be allowed to purchase up to $500 worth of stocks per month, although selling all the stocks at once will be allowed. (2) Brokers may not give special options that increases risk such as selling on margin or selling short.

(c) Losses. -

Brokers will not be held responsible for any losses due to trades.

(d) Exceptions. -

Nothing stated in this Act shall prevent private brokers from setting their own age restriction stated that is above the age of 16.

Section 3. Implementation

This Act shall take effect immediately after passage.

Passed in the House of Representatives 5-1-2-1

Sponsor: lfromnj
House Designation: HB 18-38

[Esteemed Jimmy]

HB 18-38 is now on the House floor. Debate on this legislation has begun and shall last for no less than 72 hours.

[lfromnj]

A bill that allows younger people who start working early to start investing into relatively safer areas of the market while also regulating their account to make sure nothing drastically bad happens to them due to an extremely stupid decision they made. I do admit this bill does ever so slightly help larger companies but the amount of money they do put in the market shouldn't be too large.

[lfromnj]

Just would like a short bump for feedback.

[tmthforu94]

Intriguing proposal. What is the justification for only allowing them to trade Fortune 500 companies?

[Sestak]

Intriguing proposal. What is the justification for only allowing them to trade Fortune 500 companies?

Yeah. If anything my worry is just having the government take official recognition of Fortune 500 and build regulations around them - I really don't think that's a good idea.

[Esteemed Jimmy]

I'd support allowing 16-17 year olds to invest as long as a parent agrees. I don't think restricting to the fortune 500 companies is necessary. Maybe just limiting the total amount of shares bought within a timeframe to a certain amount.

[lfromnj]

Intriguing proposal. What is the justification for only allowing them to trade Fortune 500 companies?

It was a tough decision to call. Someone make an amendment to strike it and we can vote on it. I personally will abstain from the amendment vote itself as I am not sure.
 
My main reason is I don't want teenagers to go wasting all their money in basically penny stocks and some regulations should exist in this grey area of age. The larger companies do have risk but at the same time are more established and less likely to completely collapse.

[lfromnj]

I'd support allowing 16-17 year olds to invest as long as a parent agrees. I don't think restricting to the fortune 500 companies is necessary. Maybe just limiting the total amount of shares bought within a timeframe to a certain amount.

 I disagree with a fact a parent needs to agree. This is to start limited trading without the need for a custodial account which a bad parent can withdraw from too along with the child

However I do agree with the second idea rather than Fortune 500. I admit my line there wasn't perfect and your idea is probably better. It basically prevents all waste of money in penny stocks.

[lfromnj]

Young Traders Act

Opening a limited stock market to the youth.

Section I: Actions now Allowed

A. Age Lowering
    i. The minimum age to open a special youth stock market account shall be lowered to 16.
    ii. Nothing stated above may prevent private brokers from setting their own age restriction stated it is above the age of 16.
   iii. Stated youth stock market account will not have full function of the market and will be only be allowed to purchase and sell the top 500 companies in market cap at the date of purchase of the stock. purchasing and will only be allowed to purchase 50 stocks of any company per month although selling all the stocks at once will be allowed.
  iv. Brokers will not be held responsible for any losses due to trades
  V. Brokers may not give special options that increases risk such as selling on margin or selling short.

People's House of Representatives
Pending

Proposed amendment to fix the 500 rule. Purpose is to prevent investment into stupid penny stocks. Will increase risk a bit but atleast avoids penny stocks for them.

[Esteemed Jimmy]

Representatives have 24 hours for objections.

[tmthforu94]

With the amendment, this bill has my total support! I thank the sponsor for introducing it, we should do more as a country to support our youth understanding finances.

[lfromnj]

If there is any other opposition to the bill I would like statements to be stated now rather than at voting. I would like to see if it possible to fix to appease you.

[Esteemed Jimmy]

I don't think "iv. Brokers will not be held responsible for any losses due to trades" is needed in this bill since I think brokers are already not responsible for trading losses.

[lfromnj]

I don't think "iv. Brokers will not be held responsible for any losses due to trades" is needed in this bill since I think brokers are already not responsible for trading losses.

Even if the age is lowered some brokers may be opposed to allowing young people to trade due to the legal issues there and this is just giving them legal protection such as a good Samaritan law.

[Sestak]

The value of a stock and the total number of stocks in one company varies drastically from stock to stock. Shouldn’t the limit be on how much actual money they have invested in the market at any given time?

[Esteemed Jimmy]

The value of a stock and the total number of stocks in one company varies drastically from stock to stock. Shouldn’t the limit be on how much actual money they have invested in the market at any given time?

Yeah that was what I was aiming for when I said limiting the amount of shares bought.

[lfromnj]

The value of a stock and the total number of stocks in one company varies drastically from stock to stock. Shouldn’t the limit be on how much actual money they have invested in the market at any given time?

I know that but I stated the reasons in the amendment. The point isn't to keep a limit on how much they invest into the market but rather to encourage them to avoid wasting all their money in risky penny stocks. I myself am fine with them gambling in penny stocks but I felt like other legislators would want some limits to prevent what could be considered something that could really hurt a teenagers money. Then again after a while they would probably learn like any idiot. I would ask all people to not object to this amendment and then I will propose a final amendment striking that entire provision from the bill so we can decide if we need to keep a reasonable limit on what types of stock they can buy. In general its a financially sound decision to Invest more money in the stock market and we should be encouraging this type of behavior early as possible to both boost individual wealth early as possible and to slightly increase total investment.

[Coastal Elitist]

I'm not sure about this. I think a minor should need their parents permission to do this.

[lfromnj]

I'm not sure about this. I think a minor should need their parents permission to do this.

Technically that already exists in the form of a custodial account but some parents can be assholes and just take money. I want these young adults to get an independent chance to start investing with all of them starting at an equal ground.

[Esteemed Jimmy]

Proposing this amendment which reformats the bill and changes "the market and will be only be allowed to purchase and sell the top 500 companies in market cap at the date of purchase of the stock" to "purchasing and will only be allowed to purchase up to $500 worth of stocks per month".

Young Traders Act

To open the stock market to the youth.

Section 1. Short title

This Act shall be cited as the “Young Traders Act”.

Section 2: Lowering the age to buy stocks

(a) In general. -

The minimum age to open a special youth stock market account shall be lowered to 16.

(b) Restrictions. -

(1) A youth stock market account will not have full function of purchasing and will only be allowed to purchase up to $500 worth of stocks per month, although selling all the stocks at once will be allowed. (2) Brokers may not give special options that increases risk such as selling on margin or selling short.

(c) Losses. -

Brokers will not be held responsible for any losses due to trades.

(d) Exceptions. -

Nothing stated in this Act shall prevent private brokers from setting their own age restriction stated that is above the age of 16.

Section 3. Implementation

This Act shall take effect immediately after passage.

[Esteemed Jimmy]

With no objections, the bill stands as:

Young Traders Act

Opening a limited stock market to the youth.

Section I: Actions now Allowed

A. Age Lowering
    i. The minimum age to open a special youth stock market account shall be lowered to 16.
    ii. Nothing stated above may prevent private brokers from setting their own age restriction stated it is above the age of 16.
   iii. Stated youth stock market account will not have full function of purchasing and will only be allowed to purchase 50 stocks of any company per month although selling all the stocks at once will be allowed.
  iv. Brokers will not be held responsible for any losses due to trades
  V. Brokers may not give special options that increases risk such as selling on margin or selling short.

[JGibson]

This is bill is now in an acceptable shape for me to support.

[Esteemed Jimmy]

With no objections, the bill stands as:

Young Traders Act

To open the stock market to the youth.

Section 1. Short title

This Act shall be cited as the “Young Traders Act”.

Section 2: Lowering the age to buy stocks

(a) In general. -

The minimum age to open a special youth stock market account shall be lowered to 16.

(b) Restrictions. -

(1) A youth stock market account will not have full function of purchasing and will only be allowed to purchase up to $500 worth of stocks per month, although selling all the stocks at once will be allowed. (2) Brokers may not give special options that increases risk such as selling on margin or selling short.

(c) Losses. -

Brokers will not be held responsible for any losses due to trades.

(d) Exceptions. -

Nothing stated in this Act shall prevent private brokers from setting their own age restriction stated that is above the age of 16.

Section 3. Implementation

This Act shall take effect immediately after passage.

[Esteemed Jimmy]

I motion for a final vote. Representatives have 24 hours for objections.