IB Union Calendar No. 223 112th CONGRESS 1st Session H. R. 2167 [Report No. 112–327] IN THE HOUSE OF REPRESENTATIVES June 14, 2011 Mr. Schweikert (for himself, Mr. Himes, Mr. Canseco, Mr. Quigley, Mr. Jones, Mr. Perlmutter, Mrs. Biggert, and Mr. Issa) introduced the following bill; which was referred to the Committee on Financial Services December 12, 2011 Additional sponsors: Mr. Campbell, Mr. McHenry, Mr. Manzullo, Mr. Latta, Mr. Polis, Mr. Meeks, Mr. Hurt, Ms. Loretta Sanchez of California, Mr. Welch, Mr. Boren, Mr. Fitzpatrick, Ms. Hayworth, Mr. Ackerman, Mr. Dold, Mrs. Maloney, Mr. Hinojosa, Mr. Smith of Washington, Mr. Carney, Mr. Connolly of Virginia, and Mr. Kline December 12, 2011 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed Strike out all after the enacting clause and insert the part printed in italic A BILL To amend the Securities Exchange Act of 1934 to change the threshold number of shareholders for required registration under that Act.

1.

Short title

This Act may be cited as the Private Company Flexibility and Growth Act.

2.

Threshold for registration

Section 12(g)(1)(B) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(g)(1)(B)) is amended by striking shall— and all that follows through register and insert shall, within 120 days after the last day of its first fiscal year ended on which the issuer has total assets exceeding $10,000,000 and a class of equity security (other than an exempted security) held of record by 1,000 persons, register.

3.

Accredited investors and employees

Section 12(g)(5) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(g)(5)) is amended by adding at the end the following: For purposes of determining whether an issuer is required to register a security with the Commission pursuant to paragraph (1), the definition of held of record shall not include securities held by persons who qualify as accredited investors (as that term is defined by the Commission) or securities that are held by persons who received the securities pursuant to an employee compensation plan in transactions exempted from the registration requirements of section 5 of the Securities Act of 1933..

4.

Commission rulemaking

The Securities and Exchange Commission shall revise the definition of held of record pursuant to section 12(g)(5) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(g)(5)) to implement the amendment made by section 2. The Commission shall also adopt safe harbor provisions that issuers can follow when determining whether holders of their securities are accredited investors or that holders of their securities received the securities pursuant to an employee compensation plan in transactions that were exempt from the registration requirements of section 5 of the Securities Act of 1933.

1.

Short title

This Act may be cited as the Private Company Flexibility and Growth Act.

2.

Threshold for registration

Section 12(g)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(g)(1)) is amended by striking shall— and all that follows through the first instance of register and insert shall, within 120 days after the last day of its first fiscal year ended on which the issuer has total assets exceeding $10,000,000 and a class of equity security (other than an exempted security) held of record by 1,000 persons, register.

3.

Employees

Section 12(g)(5) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(g)(5)) is amended by adding at the end the following: For purposes of determining whether an issuer is required to register a security with the Commission pursuant to paragraph (1), the definition of held of record shall not include securities held by persons who received the securities pursuant to an employee compensation plan in transactions exempted from the registration requirements of section 5 of the Securities Act of 1933..

4.

Commission rulemaking

The Securities and Exchange Commission shall revise the definition of held of record pursuant to section 12(g)(5) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(g)(5)) to implement the amendment made by section 2. The Commission shall also adopt safe harbor provisions that issuers can follow when determining that holders of their securities received the securities pursuant to an employee compensation plan in transactions that were exempt from the registration requirements of section 5 of the Securities Act of 1933.

December 12, 2011 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed