Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act of 2012Public Law 112–106, as amendedCapital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act of 2012106114–94Statute CompilationUnited States House of RepresentativesOffice of the Legislative Counseltext/xmlENPursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.GPO Statute Compilations USLM converter, version 20210527.12021-10-15Jumpstart Our Business Startups ActCROWDFUND ActCapital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act of 2012104811122012-04-05Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act of 2012[(Public Law 112–106)][As Amended Through P.L. 114–94, Enacted December 4, 2015][Currency: This publication is a compilation of the text of Public Law 112-106. It was last amended by the public law listed in the As Amended Through note above and below at the bottom of each page of the pdf version and reflects current law through the date of the enactment of the public law listed at https://www.govinfo.gov/app/collection/comps/][Note: While this publication does not represent an official version of any Federal statute, substantial efforts have been made to ensure the accuracy of its contents. The official version of Federal law is found in the United States Statutes at Large and in the United States Code. The legal effect to be given to the Statutes at Large and the United States Code is established by statute (1 U.S.C. 112, 204).]AN ACTTo increase American job creation and economic growth by improving access to the public capital markets for emerging growth companies.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE. This Act may be cited as the “Jumpstart Our Business Startups Act”.SEC. 2. TABLE OF CONTENTS. The table of contents of this Act is as follows:Sec. 1.Sec. 2.TITLE I—Sec. 101.Sec. 102.Sec. 103.Sec. 104.Sec. 105.Sec. 106.Sec. 107.Sec. 108.TITLE II—Sec. 201.TITLE III—Sec. 301.Sec. 302.Sec. 303.Sec. 304.Sec. 305.TITLE IV—Sec. 401.Sec. 402.TITLE V—Sec. 501.Sec. 502.Sec. 503.Sec. 504.TITLE VI—Sec. 601.Sec. 602.TITLE VII—Sec. 701.
<num style="-uslm-dtd:enum" value="I">TITLE I—</num><heading style="-uslm-dtd:header">REOPENING AMERICAN CAPITAL MARKETS TO EMERGING GROWTH COMPANIES </heading>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tI/s101" styleType="OLC" role="definitions">
<num style="-uslm-dtd:enum" value="101">SEC. 101. </num><heading style="-uslm-dtd:header">DEFINITIONS. </heading>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s101/a" styleType="OLC">
<num style="-uslm-dtd:enum" value="a">(a) </num><heading style="-uslm-dtd:header">Securities Act of 1933.—</heading><content style="-uslm-dtd:text">Section 2(a) of the Securities Act of 1933 (15 U.S.C. 77b(a)) is amended by adding at the end the following:<quotedContent style="-uslm-dtd:quoted-block">
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="19">“(19) </num><chapeau style="-uslm-dtd:text">The term ‘<term style="-uslm-dtd:quote">emerging growth company</term>’ means an issuer that had total annual gross revenues of less than $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) during its most recently completed fiscal year. An issuer that is an emerging growth company as of the first day of that fiscal year shall continue to be deemed an emerging growth company until the earliest of—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><content style="-uslm-dtd:text">the last day of the fiscal year of the issuer during which it had total annual gross revenues of $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><content style="-uslm-dtd:text">the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement under this title;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="C">“(C) </num><content style="-uslm-dtd:text">the date on which such issuer has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="D">“(D) </num><content style="-uslm-dtd:text">the date on which such issuer is deemed to be a ‘<term style="-uslm-dtd:quote">large accelerated filer</term>’, as defined in section 240.12b-2 of title 17, Code of Federal Regulations, or any successor thereto.”</content>
</subparagraph>
</paragraph></quotedContent>.</content>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s101/b" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">(b) </num><heading style="-uslm-dtd:header">Securities Exchange Act of 1934.—</heading><chapeau style="-uslm-dtd:text">Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended—</chapeau>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s101/b/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">by redesignating paragraph (77), as added by section 941(a) of the Investor Protection and Securities Reform Act of 2010 (Public Law 111-203, 124 Stat. 1890), as paragraph (79); and</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s101/b/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">by adding at the end the following:<quotedContent style="-uslm-dtd:quoted-block">
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="80">“(80) </num><heading style="-uslm-dtd:header">Emerging growth company. </heading><chapeau style="-uslm-dtd:text">The term ‘<term style="-uslm-dtd:quote">emerging growth company</term>’ means an issuer that had total annual gross revenues of less than $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) during its most recently completed fiscal year. An issuer that is an emerging growth company as of the first day of that fiscal year shall continue to be deemed an emerging growth company until the earliest of—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><content style="-uslm-dtd:text">the last day of the fiscal year of the issuer during which it had total annual gross revenues of $1,000,000,000 (as such amount is indexed for inflation every 5 years by the Commission to reflect the change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics, setting the threshold to the nearest 1,000,000) or more;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><content style="-uslm-dtd:text">the last day of the fiscal year of the issuer following the fifth anniversary of the date of the first sale of common equity securities of the issuer pursuant to an effective registration statement under the Securities Act of 1933;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="C">“(C) </num><content style="-uslm-dtd:text">the date on which such issuer has, during the previous 3-year period, issued more than $1,000,000,000 in non-convertible debt; or</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="D">“(D) </num><content style="-uslm-dtd:text">the date on which such issuer is deemed to be a ‘<term style="-uslm-dtd:quote">large accelerated filer</term>’, as defined in section 240.12b-2 of title 17, Code of Federal Regulations, or any successor thereto.”</content>
</subparagraph>
</paragraph></quotedContent>.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s101/c" styleType="OLC">
<num style="-uslm-dtd:enum" value="c">(c) </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s78c">15 U.S.C. 78c note</ref><b>]</b> </editorialNote><heading style="-uslm-dtd:header">Other Definitions.—</heading><chapeau style="-uslm-dtd:text">As used in this title, the following definitions shall apply:</chapeau>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s101/c/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><heading style="-uslm-dtd:header">Commission.—</heading><content style="-uslm-dtd:text">The term “<term style="-uslm-dtd:quote">Commission</term>” means the Securities and Exchange Commission.</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s101/c/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><heading style="-uslm-dtd:header">Initial public offering date.—</heading><content style="-uslm-dtd:text">The term “<term style="-uslm-dtd:quote">initial public offering date</term>” means the date of the first sale of common equity securities of an issuer pursuant to an effective registration statement under the Securities Act of 1933.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s101/d" styleType="OLC">
<num style="-uslm-dtd:enum" value="d">(d) </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s77b">15 U.S.C. 77b note</ref><b>]</b> </editorialNote><heading style="-uslm-dtd:header">Effective Date.—</heading><content style="-uslm-dtd:text">Notwithstanding section 2(a)(19) of the Securities Act of 1933 and section 3(a)(80) of the Securities Exchange Act of 1934, an issuer shall not be an emerging growth company for purposes of such Acts if the first sale of common equity securities of such issuer pursuant to an effective registration statement under the Securities Act of 1933 occurred on or before December 8, 2011.</content>
</subsection>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tI/s102" styleType="OLC">
<num style="-uslm-dtd:enum" value="102">SEC. 102. </num><heading style="-uslm-dtd:header">DISCLOSURE OBLIGATIONS. </heading>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s102/a" styleType="OLC">
<num style="-uslm-dtd:enum" value="a">(a) </num><heading style="-uslm-dtd:header">Executive Compensation.—</heading>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s102/a/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><heading style="-uslm-dtd:header">Exemption.—</heading><chapeau style="-uslm-dtd:text">Section 14A(e) of the Securities Exchange Act of 1934 (15 U.S.C. 78n-1(e)) is amended—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/112/106/tI/s102/a/1/A" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">by striking “<quotedText style="-uslm-dtd:quote">The Commission may</quotedText>” and inserting the following:<quotedContent style="-uslm-dtd:quoted-block">
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">“(1) </num><heading style="-uslm-dtd:header">In general. </heading><content style="-uslm-dtd:text">The Commission may”</content>
</paragraph></quotedContent>;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/112/106/tI/s102/a/1/B" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">by striking “<quotedText style="-uslm-dtd:quote">an issuer</quotedText>” and inserting “<quotedText style="-uslm-dtd:quote">any other issuer</quotedText>”; and</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/112/106/tI/s102/a/1/C" styleType="OLC">
<num style="-uslm-dtd:enum" value="C">(C) </num><content style="-uslm-dtd:text">by adding at the end the following:<quotedContent style="-uslm-dtd:quoted-block">
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">“(2) </num><heading style="-uslm-dtd:header">Treatment of emerging growth companies. </heading>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><heading style="-uslm-dtd:header">In general. </heading><content style="-uslm-dtd:text">An emerging growth company shall be exempt from the requirements of subsections (a) and (b).</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><heading style="-uslm-dtd:header">Compliance after termination of emerging growth company treatment. </heading><chapeau style="-uslm-dtd:text">An issuer that was an emerging growth company but is no longer an emerging growth company shall include the first separate resolution described under subsection (a)(1) not later than the end of—</chapeau>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="i">“(i) </num><content style="-uslm-dtd:text">in the case of an issuer that was an emerging growth company for less than 2 years after the date of first sale of common equity securities of the issuer pursuant to an effective registration statement under the Securities Act of 1933, the 3-year period beginning on such date; and</content>
</clause>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="ii">“(ii) </num><content style="-uslm-dtd:text">in the case of any other issuer, the 1-year period beginning on the date the issuer is no longer an emerging growth company.”</content>
</clause>
</subparagraph>
</paragraph></quotedContent>.</content>
</subparagraph>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s102/a/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><heading style="-uslm-dtd:header">Proxies.—</heading><content style="-uslm-dtd:text">Section 14(i) of the Securities Exchange Act of 1934 (15 U.S.C. 78n(i)) is amended by inserting “<quotedText style="-uslm-dtd:quote">, for any issuer other than an emerging growth company,</quotedText>” after “<quotedText style="-uslm-dtd:quote">including</quotedText>”.</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s102/a/3" styleType="OLC">
<num style="-uslm-dtd:enum" value="3">(3) </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s78l">15 U.S.C. 78l note</ref><b>]</b> </editorialNote><heading style="-uslm-dtd:header">Compensation disclosures.—</heading><content style="-uslm-dtd:text">Section 953(b)(1) of the Investor Protection and Securities Reform Act of 2010 (Public Law 111-203; 124 Stat. 1904) is amended by inserting “<quotedText style="-uslm-dtd:quote">, other than an emerging growth company, as that term is defined in section 3(a) of the Securities Exchange Act of 1934,</quotedText>” after “<quotedText style="-uslm-dtd:quote">require each issuer</quotedText>”.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s102/b" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">(b) </num><heading style="-uslm-dtd:header">Financial Disclosures and Accounting Pronouncements.—</heading>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s102/b/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><heading style="-uslm-dtd:header">Securities act of 1933.—</heading><chapeau style="-uslm-dtd:text">Section 7(a) of the Securities Act of 1933 (15 U.S.C. 77g(a)) is amended—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/112/106/tI/s102/b/1/A" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">by striking “<quotedText style="-uslm-dtd:quote">(a) The registration</quotedText>” and inserting the following:<quotedContent style="-uslm-dtd:quoted-block">
<subsection style="-uslm-dtd:subsection" styleType="OLC">
<num style="-uslm-dtd:enum" value="a">“(a) </num><heading style="-uslm-dtd:header">Information Required in Registration Statement. </heading>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">“(1) </num><heading style="-uslm-dtd:header">In general. </heading><content style="-uslm-dtd:text">The registration”</content>
</paragraph>
</subsection></quotedContent>; and</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/112/106/tI/s102/b/1/B" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">by adding at the end the following:<quotedContent style="-uslm-dtd:quoted-block">
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">“(2) </num><heading style="-uslm-dtd:header">Treatment of emerging growth companies. </heading><chapeau style="-uslm-dtd:text">An emerging growth company—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><content style="-uslm-dtd:text">need not present more than 2 years of audited financial statements in order for the registration statement of such emerging growth company with respect to an initial public offering of its common equity securities to be effective, and in any other registration statement to be filed with the Commission, an emerging growth company need not present selected financial data in accordance with section 229.301 of title 17, Code of Federal Regulations, for any period prior to the earliest audited period presented in connection with its initial public offering; and</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><content style="-uslm-dtd:text">may not be required to comply with any new or revised financial accounting standard until such date that a company that is not an issuer (as defined under section 2(a) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(a))) is required to comply with such new or revised accounting standard, if such standard applies to companies that are not issuers.”</content>
</subparagraph>
</paragraph></quotedContent>.</content>
</subparagraph>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s102/b/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><heading style="-uslm-dtd:header">Securities exchange act of 1934.—</heading><content style="-uslm-dtd:text">Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a)) is amended by adding at the end the following: “<quotedText style="-uslm-dtd:quote">In any registration statement, periodic report, or other reports to be filed with the Commission, an emerging growth company need not present selected financial data in accordance with section 229.301 of title 17, Code of Federal Regulations, for any period prior to the earliest audited period presented in connection with its first registration statement that became effective under this Act or the Securities Act of 1933 and, with respect to any such statement or reports, an emerging growth company may not be required to comply with any new or revised financial accounting standard until such date that a company that is not an issuer (as defined under section 2(a) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7201(a))) is required to comply with such new or revised accounting standard, if such standard applies to companies that are not issuers.</quotedText>”.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s102/c" styleType="OLC">
<num style="-uslm-dtd:enum" value="c">(c) </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s77g">15 U.S.C. 77g note</ref><b>]</b> </editorialNote><heading style="-uslm-dtd:header">Other Disclosures.—</heading><content style="-uslm-dtd:text">An emerging growth company may comply with section 229.303(a) of title 17, Code of Federal Regulations, or any successor thereto, by providing information required by such section with respect to the financial statements of the emerging growth company for each period presented pursuant to section 7(a) of the Securities Act of 1933 (15 U.S.C. 77g(a)). An emerging growth company may comply with section 229.402 of title 17, Code of Federal Regulations, or any successor thereto, by disclosing the same information as any issuer with a market value of outstanding voting and nonvoting common equity held by non-affiliates of less than $75,000,000.</content>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s102/d" styleType="OLC">
<num style="-uslm-dtd:enum" value="d">(d) </num><heading style="-uslm-dtd:header">Simplified Disclosure Requirements.—</heading><chapeau style="-uslm-dtd:text">With respect to an emerging growth company (as such term is defined under section 2 of the Securities Act of 1933):</chapeau>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s102/d/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><heading style="-uslm-dtd:header">Requirement to include notice on forms s–1 and f–1.—</heading><chapeau style="-uslm-dtd:text">Not later than 30 days after the date of enactment of this subsection, the Securities and Exchange Commission shall revise its general instructions on Forms S–1 and F–1 to indicate that a registration statement filed (or submitted for confidential review) by an issuer prior to an initial public offering may omit financial information for historical periods otherwise required by regulation S–X (17 CFR 210.1–01 et seq.) as of the time of filing (or confidential submission) of such registration statement, provided that—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/112/106/tI/s102/d/1/A" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">the omitted financial information relates to a historical period that the issuer reasonably believes will not be required to be included in the Form S–1 or F–1 at the time of the contemplated offering; and</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/112/106/tI/s102/d/1/B" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">prior to the issuer distributing a preliminary prospectus to investors, such registration statement is amended to include all financial information required by such regulation S–X at the date of such amendment.</content>
</subparagraph>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s102/d/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><heading style="-uslm-dtd:header">Reliance by issuers.—</heading><chapeau style="-uslm-dtd:text">Effective 30 days after the date of enactment of this subsection, an issuer filing a registration statement (or submitting the statement for confidential review) on Form S–1 or Form F–1 may omit financial information for historical periods otherwise required by regulation S–X (17 CFR 210.1–01 et seq.) as of the time of filing (or confidential submission) of such registration statement, provided that—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/112/106/tI/s102/d/2/A" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">the omitted financial information relates to a historical period that the issuer reasonably believes will not be required to be included in the Form S–1 or Form F–1 at the time of the contemplated offering; and</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/112/106/tI/s102/d/2/B" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">prior to the issuer distributing a preliminary prospectus to investors, such registration statement is amended to include all financial information required by such regulation S–X at the date of such amendment.</content>
</subparagraph>
</paragraph>
</subsection>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tI/s103" styleType="OLC">
<num style="-uslm-dtd:enum" value="103">SEC. 103. </num><heading style="-uslm-dtd:header">INTERNAL CONTROLS AUDIT. </heading>
<content style="-uslm-dtd:text" class="block">Section 404(b) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262(b)) is amended by inserting “<quotedText style="-uslm-dtd:quote">, other than an issuer that is an emerging growth company (as defined in section 3 of the Securities Exchange Act of 1934),</quotedText>” before “<quotedText style="-uslm-dtd:quote">shall attest to</quotedText>”.</content>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tI/s104" styleType="OLC">
<num style="-uslm-dtd:enum" value="104">SEC. 104. </num><heading style="-uslm-dtd:header">AUDITING STANDARDS. </heading>
<content style="-uslm-dtd:text" class="block">Section 103(a)(3) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7213(a)(3)) is amended by adding at the end the following:<quotedContent style="-uslm-dtd:quoted-block">
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="C">“(C) </num><heading style="-uslm-dtd:header">Transition period for emerging growth companies. </heading><content style="-uslm-dtd:text">Any rules of the Board requiring mandatory audit firm rotation or a supplement to the auditor’s report in which the auditor would be required to provide additional information about the audit and the financial statements of the issuer (auditor discussion and analysis) shall not apply to an audit of an emerging growth company, as defined in section 3 of the Securities Exchange Act of 1934. Any additional rules adopted by the Board after the date of enactment of this subparagraph shall not apply to an audit of any emerging growth company, unless the Commission determines that the application of such additional requirements is necessary or appropriate in the public interest, after considering the protection of investors and whether the action will promote efficiency, competition, and capital formation.”</content>
</subparagraph></quotedContent>.</content>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tI/s105" styleType="OLC">
<num style="-uslm-dtd:enum" value="105">SEC. 105. </num><heading style="-uslm-dtd:header">AVAILABILITY OF INFORMATION ABOUT EMERGING GROWTH COMPANIES. </heading>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s105/a" styleType="OLC">
<num style="-uslm-dtd:enum" value="a">(a) </num><heading style="-uslm-dtd:header">Provision of Research.—</heading><content style="-uslm-dtd:text">Section 2(a)(3) of the Securities Act of 1933 (15 U.S.C. 77b(a)(3)) is amended by adding at the end the following: “<quotedText style="-uslm-dtd:quote">The publication or distribution by a broker or dealer of a research report about an emerging growth company that is the subject of a proposed public offering of the common equity securities of such emerging growth company pursuant to a registration statement that the issuer proposes to file, or has filed, or that is effective shall be deemed for purposes of paragraph (10) of this subsection and section 5(c) not to constitute an offer for sale or offer to sell a security, even if the broker or dealer is participating or will participate in the registered offering of the securities of the issuer. As used in this paragraph, the term ‘<quotedText style="-uslm-dtd:quote">research report</quotedText>’ means a written, electronic, or oral communication that includes information, opinions, or recommendations with respect to securities of an issuer or an analysis of a security or an issuer, whether or not it provides information reasonably sufficient upon which to base an investment decision.</quotedText>”.</content>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s105/b" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">(b) </num><heading style="-uslm-dtd:header">Securities Analyst Communications.—</heading><chapeau style="-uslm-dtd:text">Section 15D of the Securities Exchange Act of 1934 (15 U.S.C. 78o-6) is amended—</chapeau>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s105/b/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">by redesignating subsection (c) as subsection (d); and</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s105/b/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">by inserting after subsection (b) the following:<quotedContent style="-uslm-dtd:quoted-block">
<subsection style="-uslm-dtd:subsection" styleType="OLC">
<num style="-uslm-dtd:enum" value="c">“(c) </num><heading style="-uslm-dtd:header">Limitation. </heading><chapeau style="-uslm-dtd:text">Notwithstanding subsection (a) or any other provision of law, neither the Commission nor any national securities association registered under section 15A may adopt or maintain any rule or regulation in connection with an initial public offering of the common equity of an emerging growth company—</chapeau>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">“(1) </num><content style="-uslm-dtd:text">restricting, based on functional role, which associated persons of a broker, dealer, or member of a national securities association, may arrange for communications between a securities analyst and a potential investor; or</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">“(2) </num><content style="-uslm-dtd:text">restricting a securities analyst from participating in any communications with the management of an emerging growth company that is also attended by any other associated person of a broker, dealer, or member of a national securities association whose functional role is other than as a securities analyst.”</content>
</paragraph>
</subsection></quotedContent>.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s105/c" styleType="OLC">
<num style="-uslm-dtd:enum" value="c">(c) </num><heading style="-uslm-dtd:header">Expanding Permissible Communications.—</heading><chapeau style="-uslm-dtd:text">Section 5 of the Securities Act of 1933 (15 U.S.C. 77e) is amended—</chapeau>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s105/c/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">by redesignating subsection (d) as subsection (e); and</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s105/c/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">by inserting after subsection (c) the following:<quotedContent style="-uslm-dtd:quoted-block">
<subsection style="-uslm-dtd:subsection" styleType="OLC">
<num style="-uslm-dtd:enum" value="d">“(d) </num><heading style="-uslm-dtd:header">Limitation. </heading><content style="-uslm-dtd:text">Notwithstanding any other provision of this section, an emerging growth company or any person authorized to act on behalf of an emerging growth company may engage in oral or written communications with potential investors that are qualified institutional buyers or institutions that are accredited investors, as such terms are respectively defined in section 230.144A and section 230.501(a) of title 17, Code of Federal Regulations, or any successor thereto, to determine whether such investors might have an interest in a contemplated securities offering, either prior to or following the date of filing of a registration statement with respect to such securities with the Commission, subject to the requirement of subsection (b)(2).”</content>
</subsection></quotedContent>.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s105/d" styleType="OLC">
<num style="-uslm-dtd:enum" value="d">(d) </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s78o-6">15 U.S.C. 78o-6 note</ref><b>]</b> </editorialNote><heading style="-uslm-dtd:header">Post Offering Communications.—</heading><chapeau style="-uslm-dtd:text">Neither the Commission nor any national securities association registered under section 15A of the Securities Exchange Act of 1934 may adopt or maintain any rule or regulation prohibiting any broker, dealer, or member of a national securities association from publishing or distributing any research report or making a public appearance, with respect to the securities of an emerging growth company, either—</chapeau>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s105/d/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">within any prescribed period of time following the initial public offering date of the emerging growth company; or</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s105/d/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">within any prescribed period of time prior to the expiration date of any agreement between the broker, dealer, or member of a national securities association and the emerging growth company or its shareholders that restricts or prohibits the sale of securities held by the emerging growth company or its shareholders after the initial public offering date.</content>
</paragraph>
</subsection>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tI/s106" styleType="OLC">
<num style="-uslm-dtd:enum" value="106">SEC. 106. </num><heading style="-uslm-dtd:header">OTHER MATTERS. </heading>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s106/a" styleType="OLC">
<num style="-uslm-dtd:enum" value="a">(a) </num><heading style="-uslm-dtd:header">Draft Registration Statements.—</heading><content style="-uslm-dtd:text">Section 6 of the Securities Act of 1933 (15 U.S.C. 77f) is amended by adding at the end the following:<quotedContent style="-uslm-dtd:quoted-block">
<subsection style="-uslm-dtd:subsection" styleType="OLC">
<num style="-uslm-dtd:enum" value="e">“(e) </num><heading style="-uslm-dtd:header">Emerging Growth Companies. </heading>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">“(1) </num><heading style="-uslm-dtd:header">In general. </heading><content style="-uslm-dtd:text">Any emerging growth company, prior to its initial public offering date, may confidentially submit to the Commission a draft registration statement, for confidential nonpublic review by the staff of the Commission prior to public filing, provided that the initial confidential submission and all amendments thereto shall be publicly filed with the Commission not later than 21 days before the date on which the issuer conducts a road show, as such term is defined in section 230.433(h)(4) of title 17, Code of Federal Regulations, or any successor thereto.</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">“(2) </num><heading style="-uslm-dtd:header">Confidentiality. </heading><content style="-uslm-dtd:text">Notwithstanding any other provision of this title, the Commission shall not be compelled to disclose any information provided to or obtained by the Commission pursuant to this subsection. For purposes of section 552 of title 5, United States Code, this subsection shall be considered a statute described in subsection (b)(3)(B) of such section 552. Information described in or obtained pursuant to this subsection shall be deemed to constitute confidential information for purposes of section 24(b)(2) of the Securities Exchange Act of 1934.”</content>
</paragraph>
</subsection></quotedContent>.</content>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s106/b" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">(b) </num><heading style="-uslm-dtd:header">Tick Size.—</heading><content style="-uslm-dtd:text">Section 11A(c) of the Securities Exchange Act of 1934 (15 U.S.C. 78k-1(c)) is amended by adding at the end the following new paragraph:<quotedContent style="-uslm-dtd:quoted-block">
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="6">“(6) </num><heading style="-uslm-dtd:header">Tick size. </heading>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><heading style="-uslm-dtd:header">Study and report. </heading><content style="-uslm-dtd:text">The Commission shall conduct a study examining the transition to trading and quoting securities in one penny increments, also known as decimalization. The study shall examine the impact that decimalization has had on the number of initial public offerings since its implementation relative to the period before its implementation. The study shall also examine the impact that this change has had on liquidity for small and middle capitalization company securities and whether there is sufficient economic incentive to support trading operations in these securities in penny increments. Not later than 90 days after the date of enactment of this paragraph, the Commission shall submit to Congress a report on the findings of the study.</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><heading style="-uslm-dtd:header">Designation. </heading><content style="-uslm-dtd:text">If the Commission determines that the securities of emerging growth companies should be quoted and traded using a minimum increment of greater than $0.01, the Commission may, by rule not later than 180 days after the date of enactment of this paragraph, designate a minimum increment for the securities of emerging growth companies that is greater than $0.01 but less than $0.10 for use in all quoting and trading of securities in any exchange or other execution venue.”</content>
</subparagraph>
</paragraph></quotedContent>.</content>
</subsection>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tI/s107" styleType="OLC">
<num style="-uslm-dtd:enum" value="107">SEC. 107. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s78c">15 U.S.C. 78c note</ref><b>]</b> </editorialNote><heading style="-uslm-dtd:header">OPT-IN RIGHT FOR EMERGING GROWTH COMPANIES. </heading>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s107/a" styleType="OLC">
<num style="-uslm-dtd:enum" value="a">(a) </num><heading style="-uslm-dtd:header">In General.—</heading><content style="-uslm-dtd:text">With respect to an exemption provided to emerging growth companies under this title, or an amendment made by this title, an emerging growth company may choose to forgo such exemption and instead comply with the requirements that apply to an issuer that is not an emerging growth company.</content>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s107/b" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">(b) </num><heading style="-uslm-dtd:header">Special Rule.—</heading><chapeau style="-uslm-dtd:text">Notwithstanding subsection (a), with respect to the extension of time to comply with new or revised financial accounting standards provided under section 7(a)(2)(B) of the Securities Act of 1933 and section 13(a) of the Securities Exchange Act of 1934, as added by section 102(b), if an emerging growth company chooses to comply with such standards to the same extent that a non-emerging growth company is required to comply with such standards, the emerging growth company—</chapeau>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s107/b/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">must make such choice at the time the company is first required to file a registration statement, periodic report, or other report with the Commission under section 13 of the Securities Exchange Act of 1934 and notify the Securities and Exchange Commission of such choice;</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s107/b/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">may not select some standards to comply with in such manner and not others, but must comply with all such standards to the same extent that a non-emerging growth company is required to comply with such standards; and</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s107/b/3" styleType="OLC">
<num style="-uslm-dtd:enum" value="3">(3) </num><content style="-uslm-dtd:text">must continue to comply with such standards to the same extent that a non-emerging growth company is required to comply with such standards for as long as the company remains an emerging growth company.</content>
</paragraph>
</subsection>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tI/s108" styleType="OLC">
<num style="-uslm-dtd:enum" value="108">SEC. 108. </num><heading style="-uslm-dtd:header">REVIEW OF REGULATION S-K. </heading>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s108/a" styleType="OLC">
<num style="-uslm-dtd:enum" value="a">(a) </num><heading style="-uslm-dtd:header">Review.—</heading><chapeau style="-uslm-dtd:text">The Securities and Exchange Commission shall conduct a review of its Regulation S-K (17 CFR 229.10 et seq.) to—</chapeau>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s108/a/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">comprehensively analyze the current registration requirements of such regulation; and</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tI/s108/a/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">determine how such requirements can be updated to modernize and simplify the registration process and reduce the costs and other burdens associated with these requirements for issuers who are emerging growth companies.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tI/s108/b" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">(b) </num><heading style="-uslm-dtd:header">Report.—</heading><content style="-uslm-dtd:text">Not later than 180 days after the date of enactment of this title, the Commission shall transmit to Congress a report of the review conducted under subsection (a). The report shall include the specific recommendations of the Commission on how to streamline the registration process in order to make it more efficient and less burdensome for the Commission and for prospective issuers who are emerging growth companies.</content>
</subsection>
</section>
<num style="-uslm-dtd:enum" value="II">TITLE II—</num><heading style="-uslm-dtd:header">ACCESS TO CAPITAL FOR JOB CREATORS </heading>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tII/s201" styleType="OLC">
<num style="-uslm-dtd:enum" value="201">SEC. 201. </num><heading style="-uslm-dtd:header">MODIFICATION OF EXEMPTION. </heading>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tII/s201/a" styleType="OLC">
<num style="-uslm-dtd:enum" value="a">(a) </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s77d">15 U.S.C. 77d note</ref><b>]</b> </editorialNote><heading style="-uslm-dtd:header">Modification of Rules.—</heading>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tII/s201/a/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">Not later than 90 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise its rules issued in section 230.506 of title 17, Code of Federal Regulations, to provide that the prohibition against general solicitation or general advertising contained in section 230.502(c) of such title shall not apply to offers and sales of securities made pursuant to section 230.506, provided that all purchasers of the securities are accredited investors. Such rules shall require the issuer to take reasonable steps to verify that purchasers of the securities are accredited investors, using such methods as determined by the Commission. Section 230.506 of title 17, Code of Federal Regulations, as revised pursuant to this section, shall continue to be treated as a regulation issued under section 4(2) of the Securities Act of 1933 (15 U.S.C. 77d(2)).</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tII/s201/a/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">Not later than 90 days after the date of enactment of this Act, the Securities and Exchange Commission shall revise subsection (d)(1) of section 230.144A of title 17, Code of Federal Regulations, to provide that securities sold under such revised exemption may be offered to persons other than qualified institutional buyers, including by means of general solicitation or general advertising, provided that securities are sold only to persons that the seller and any person acting on behalf of the seller reasonably believe is a qualified institutional buyer.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tII/s201/b" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">(b) </num><heading style="-uslm-dtd:header">Consistency in Interpretation.—</heading><chapeau style="-uslm-dtd:text">Section 4 of the Securities Act of 1933 (15 U.S.C. 77d) is amended—</chapeau>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tII/s201/b/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">by striking “<quotedText style="-uslm-dtd:quote">The provisions of section 5</quotedText>” and inserting “<quotedText style="-uslm-dtd:quote">(a) The provisions of section 5</quotedText>”; and</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tII/s201/b/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">by adding at the end the following:<quotedContent style="-uslm-dtd:quoted-block">
<subsection style="-uslm-dtd:subsection" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">“(b) </num><content style="-uslm-dtd:text">Offers and sales exempt under section 230.506 of title 17, Code of Federal Regulations (as revised pursuant to section 201 of the Jumpstart Our Business Startups Act) shall not be deemed public offerings under the Federal securities laws as a result of general advertising or general solicitation.”</content>
</subsection></quotedContent>.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tII/s201/c" styleType="OLC">
<num style="-uslm-dtd:enum" value="c">(c) </num><heading style="-uslm-dtd:header">Explanation of Exemption.—</heading><chapeau style="-uslm-dtd:text">Section 4 of the Securities Act of 1933 (15 U.S.C. 77d) is amended—</chapeau>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tII/s201/c/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">by striking “<quotedText style="-uslm-dtd:quote">The provisions of section 5</quotedText>” and inserting “<quotedText style="-uslm-dtd:quote">(a) The provisions of section 5</quotedText>”; and</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tII/s201/c/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">by adding at the end the following:<quotedContent style="-uslm-dtd:quoted-block">
<subsection style="-uslm-dtd:subsection" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">“(b)</num><paragraph style="-uslm-dtd:paragraph" styleType="OLC" class="inline"><num style="-uslm-dtd:enum" value="1">(1) </num><chapeau style="-uslm-dtd:text">With respect to securities offered and sold in compliance with Rule 506 of Regulation D under this Act, no person who meets the conditions set forth in paragraph (2) shall be subject to registration as a broker or dealer pursuant to section 15(a)(1) of this title, solely because—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><content style="-uslm-dtd:text">that person maintains a platform or mechanism that permits the offer, sale, purchase, or negotiation of or with respect to securities, or permits general solicitations, general advertisements, or similar or related activities by issuers of such securities, whether online, in person, or through any other means;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><content style="-uslm-dtd:text">that person or any person associated with that person co-invests in such securities; or</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="C">“(C) </num><content style="-uslm-dtd:text">that person or any person associated with that person provides ancillary services with respect to such securities.</content>
</subparagraph></paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC" class="leftIndentDecrease1">
<num style="-uslm-dtd:enum" value="2">“(2) </num><chapeau style="-uslm-dtd:text">The exemption provided in paragraph (1) shall apply to any person described in such paragraph if—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><content style="-uslm-dtd:text">such person and each person associated with that person receives no compensation in connection with the purchase or sale of such security;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><content style="-uslm-dtd:text">such person and each person associated with that person does not have possession of customer funds or securities in connection with the purchase or sale of such security; and</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="C">“(C) </num><content style="-uslm-dtd:text">such person is not subject to a statutory disqualification as defined in section 3(a)(39) of this title and does not have any person associated with that person subject to such a statutory disqualification.</content>
</subparagraph>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC" class="leftIndentDecrease1">
<num style="-uslm-dtd:enum" value="3">“(3) </num><chapeau style="-uslm-dtd:text">For the purposes of this subsection, the term ‘<quotedText style="-uslm-dtd:quote">ancillary services</quotedText>’ means—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><content style="-uslm-dtd:text">the provision of due diligence services, in connection with the offer, sale, purchase, or negotiation of such security, so long as such services do not include, for separate compensation, investment advice or recommendations to issuers or investors; and</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><content style="-uslm-dtd:text">the provision of standardized documents to the issuers and investors, so long as such person or entity does not negotiate the terms of the issuance for and on behalf of third parties and issuers are not required to use the standardized documents as a condition of using the service.”</content>
</subparagraph>
</paragraph>
</subsection></quotedContent>.</content>
</paragraph>
</subsection>
</section>
<num style="-uslm-dtd:enum" value="III">TITLE III—</num><heading style="-uslm-dtd:header">CROWDFUNDING </heading>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tIII/s301" styleType="OLC">
<num style="-uslm-dtd:enum" value="301">SEC. 301. </num><heading style="-uslm-dtd:header">SHORT TITLE. </heading>
<content style="-uslm-dtd:text" class="block">This title may be cited as the “<shortTitle style="-uslm-dtd:quote"><inline style="-uslm-dtd:short-title">Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act of 2012</inline></shortTitle>” or the “<shortTitle style="-uslm-dtd:quote"><inline style="-uslm-dtd:short-title">CROWDFUND Act</inline></shortTitle>”.</content>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tIII/s302" styleType="OLC">
<num style="-uslm-dtd:enum" value="302">SEC. 302. </num><heading style="-uslm-dtd:header">CROWDFUNDING EXEMPTION. </heading>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tIII/s302/a" styleType="OLC">
<num style="-uslm-dtd:enum" value="a">(a) </num><heading style="-uslm-dtd:header">Securities Act of 1933.—</heading><content style="-uslm-dtd:text">Section 4 of the Securities Act of 1933 (15 U.S.C. 77d) is amended by adding at the end the following:<quotedContent style="-uslm-dtd:quoted-block">
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="6">“(6) </num><chapeau style="-uslm-dtd:text">transactions involving the offer or sale of securities by an issuer (including all entities controlled by or under common control with the issuer), provided that—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><content style="-uslm-dtd:text">the aggregate amount sold to all investors by the issuer, including any amount sold in reliance on the exemption provided under this paragraph during the 12-month period preceding the date of such transaction, is not more than $1,000,000;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><chapeau style="-uslm-dtd:text">the aggregate amount sold to any investor by an issuer, including any amount sold in reliance on the exemption provided under this paragraph during the 12-month period preceding the date of such transaction, does not exceed—</chapeau>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="i">“(i) </num><content style="-uslm-dtd:text">the greater of $2,000 or 5 percent of the annual income or net worth of such investor, as applicable, if either the annual income or the net worth of the investor is less than $100,000; and</content>
</clause>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="ii">“(ii) </num><content style="-uslm-dtd:text">10 percent of the annual income or net worth of such investor, as applicable, not to exceed a maximum aggregate amount sold of $100,000, if either the annual income or net worth of the investor is equal to or more than $100,000;</content>
</clause>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="C">“(C) </num><content style="-uslm-dtd:text">the transaction is conducted through a broker or funding portal that complies with the requirements of section 4A(a); and</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="D">“(D) </num><content style="-uslm-dtd:text">the issuer complies with the requirements of section 4A(b).”</content>
</subparagraph>
</paragraph></quotedContent>.</content>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tIII/s302/b" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">(b) </num><heading style="-uslm-dtd:header">Requirements To Qualify for Crowdfunding Exemption.—</heading><content style="-uslm-dtd:text">The Securities Act of 1933 (15 U.S.C. 77a et seq.) is amended by inserting after section 4 the following:<quotedContent style="-uslm-dtd:quoted-block">
<section style="-uslm-dtd:section" styleType="OLC">
<num style="-uslm-dtd:enum" value="4A">“SEC. 4A. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s77d-1">15 U.S.C. 77d-1</ref><b>]</b> </editorialNote><heading style="-uslm-dtd:header">REQUIREMENTS WITH RESPECT TO CERTAIN SMALL TRANSACTIONS </heading>
<subsection style="-uslm-dtd:subsection" styleType="OLC">
<num style="-uslm-dtd:enum" value="a">“(a) </num><heading style="-uslm-dtd:header">Requirements on Intermediaries. </heading><chapeau style="-uslm-dtd:text">A person acting as an intermediary in a transaction involving the offer or sale of securities for the account of others pursuant to section 4(6) shall—</chapeau>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">“(1) </num><chapeau style="-uslm-dtd:text">register with the Commission as—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><content style="-uslm-dtd:text">a broker; or</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><content style="-uslm-dtd:text">a funding portal (as defined in section 3(a)(80) of the Securities Exchange Act of 1934);</content>
</subparagraph>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">“(2) </num><content style="-uslm-dtd:text">register with any applicable self-regulatory organization (as defined in section 3(a)(26) of the Securities Exchange Act of 1934);</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="3">“(3) </num><content style="-uslm-dtd:text">provide such disclosures, including disclosures related to risks and other investor education materials, as the Commission shall, by rule, determine appropriate;</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="4">“(4) </num><chapeau style="-uslm-dtd:text">ensure that each investor—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><content style="-uslm-dtd:text">reviews investor-education information, in accordance with standards established by the Commission, by rule;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><content style="-uslm-dtd:text">positively affirms that the investor understands that the investor is risking the loss of the entire investment, and that the investor could bear such a loss; and</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="C">“(C) </num><chapeau style="-uslm-dtd:text">answers questions demonstrating—</chapeau>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="i">“(i) </num><content style="-uslm-dtd:text">an understanding of the level of risk generally applicable to investments in startups, emerging businesses, and small issuers;</content>
</clause>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="ii">“(ii) </num><content style="-uslm-dtd:text">an understanding of the risk of illiquidity; and</content>
</clause>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="iii">“(iii) </num><content style="-uslm-dtd:text">an understanding of such other matters as the Commission determines appropriate, by rule;</content>
</clause>
</subparagraph>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="5">“(5) </num><content style="-uslm-dtd:text">take such measures to reduce the risk of fraud with respect to such transactions, as established by the Commission, by rule, including obtaining a background and securities enforcement regulatory history check on each officer, director, and person holding more than 20 percent of the outstanding equity of every issuer whose securities are offered by such person;</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="6">“(6) </num><content style="-uslm-dtd:text">not later than 21 days prior to the first day on which securities are sold to any investor (or such other period as the Commission may establish), make available to the Commission and to potential investors any information provided by the issuer pursuant to subsection (b);</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="7">“(7) </num><content style="-uslm-dtd:text">ensure that all offering proceeds are only provided to the issuer when the aggregate capital raised from all investors is equal to or greater than a target offering amount, and allow all investors to cancel their commitments to invest, as the Commission shall, by rule, determine appropriate;</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="8">“(8) </num><content style="-uslm-dtd:text">make such efforts as the Commission determines appropriate, by rule, to ensure that no investor in a 12-month period has purchased securities offered pursuant to section 4(6) that, in the aggregate, from all issuers, exceed the investment limits set forth in section 4(6)(B);</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="9">“(9) </num><content style="-uslm-dtd:text">take such steps to protect the privacy of information collected from investors as the Commission shall, by rule, determine appropriate;</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="10">“(10) </num><content style="-uslm-dtd:text">not compensate promoters, finders, or lead generators for providing the broker or funding portal with the personal identifying information of any potential investor;</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="11">“(11) </num><content style="-uslm-dtd:text">prohibit its directors, officers, or partners (or any person occupying a similar status or performing a similar function) from having any financial interest in an issuer using its services; and</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="12">“(12) </num><content style="-uslm-dtd:text">meet such other requirements as the Commission may, by rule, prescribe, for the protection of investors and in the public interest.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">“(b) </num><heading style="-uslm-dtd:header">Requirements for Issuers. </heading><chapeau style="-uslm-dtd:text">For purposes of section 4(6), an issuer who offers or sells securities shall—</chapeau>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">“(1) </num><chapeau style="-uslm-dtd:text">file with the Commission and provide to investors and the relevant broker or funding portal, and make available to potential investors—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><content style="-uslm-dtd:text">the name, legal status, physical address, and website address of the issuer;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><content style="-uslm-dtd:text">the names of the directors and officers (and any persons occupying a similar status or performing a similar function), and each person holding more than 20 percent of the shares of the issuer;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="C">“(C) </num><content style="-uslm-dtd:text">a description of the business of the issuer and the anticipated business plan of the issuer;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="D">“(D) </num><chapeau style="-uslm-dtd:text">a description of the financial condition of the issuer, including, for offerings that, together with all other offerings of the issuer under section 4(6) within the preceding 12-month period, have, in the aggregate, target offering amounts of—</chapeau>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="i">“(i) </num><chapeau style="-uslm-dtd:text">$100,000 or less—</chapeau>
<subclause style="-uslm-dtd:subclause" styleType="OLC">
<num style="-uslm-dtd:enum" value="I">“(I) </num><content style="-uslm-dtd:text">the income tax returns filed by the issuer for the most recently completed year (if any); and</content>
</subclause>
<subclause style="-uslm-dtd:subclause" styleType="OLC">
<num style="-uslm-dtd:enum" value="II">“(II) </num><content style="-uslm-dtd:text">financial statements of the issuer, which shall be certified by the principal executive officer of the issuer to be true and complete in all material respects;</content>
</subclause>
</clause>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="ii">“(ii) </num><content style="-uslm-dtd:text">more than $100,000, but not more than $500,000, financial statements reviewed by a public accountant who is independent of the issuer, using professional standards and procedures for such review or standards and procedures established by the Commission, by rule, for such purpose; and</content>
</clause>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="iii">“(iii) </num><content style="-uslm-dtd:text">more than $500,000 (or such other amount as the Commission may establish, by rule), audited financial statements;</content>
</clause>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="E">“(E) </num><content style="-uslm-dtd:text">a description of the stated purpose and intended use of the proceeds of the offering sought by the issuer with respect to the target offering amount;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="F">“(F) </num><content style="-uslm-dtd:text">the target offering amount, the deadline to reach the target offering amount, and regular updates regarding the progress of the issuer in meeting the target offering amount;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="G">“(G) </num><content style="-uslm-dtd:text">the price to the public of the securities or the method for determining the price, provided that, prior to sale, each investor shall be provided in writing the final price and all required disclosures, with a reasonable opportunity to rescind the commitment to purchase the securities;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="H">“(H) </num><chapeau style="-uslm-dtd:text">a description of the ownership and capital structure of the issuer, including—</chapeau>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="i">“(i) </num><content style="-uslm-dtd:text">terms of the securities of the issuer being offered and each other class of security of the issuer, including how such terms may be modified, and a summary of the differences between such securities, including how the rights of the securities being offered may be materially limited, diluted, or qualified by the rights of any other class of security of the issuer;</content>
</clause>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="ii">“(ii) </num><content style="-uslm-dtd:text">a description of how the exercise of the rights held by the principal shareholders of the issuer could negatively impact the purchasers of the securities being offered;</content>
</clause>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="iii">“(iii) </num><content style="-uslm-dtd:text">the name and ownership level of each existing shareholder who owns more than 20 percent of any class of the securities of the issuer;</content>
</clause>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="iv">“(iv) </num><content style="-uslm-dtd:text">how the securities being offered are being valued, and examples of methods for how such securities may be valued by the issuer in the future, including during subsequent corporate actions; and</content>
</clause>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="v">“(v) </num><content style="-uslm-dtd:text">the risks to purchasers of the securities relating to minority ownership in the issuer, the risks associated with corporate actions, including additional issuances of shares, a sale of the issuer or of assets of the issuer, or transactions with related parties; and</content>
</clause>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="I">“(I) </num><content style="-uslm-dtd:text">such other information as the Commission may, by rule, prescribe, for the protection of investors and in the public interest;</content>
</subparagraph>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">“(2) </num><content style="-uslm-dtd:text">not advertise the terms of the offering, except for notices which direct investors to the funding portal or broker;</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="3">“(3) </num><content style="-uslm-dtd:text">not compensate or commit to compensate, directly or indirectly, any person to promote its offerings through communication channels provided by a broker or funding portal, without taking such steps as the Commission shall, by rule, require to ensure that such person clearly discloses the receipt, past or prospective, of such compensation, upon each instance of such promotional communication;</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="4">“(4) </num><content style="-uslm-dtd:text">not less than annually, file with the Commission and provide to investors reports of the results of operations and financial statements of the issuer, as the Commission shall, by rule, determine appropriate, subject to such exceptions and termination dates as the Commission may establish, by rule; and</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="5">“(5) </num><content style="-uslm-dtd:text">comply with such other requirements as the Commission may, by rule, prescribe, for the protection of investors and in the public interest.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" styleType="OLC">
<num style="-uslm-dtd:enum" value="c">“(c) </num><heading style="-uslm-dtd:header">Liability for Material Misstatements and Omissions. </heading>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">“(1) </num><heading style="-uslm-dtd:header">Actions authorized. </heading>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><heading style="-uslm-dtd:header">In general. </heading><content style="-uslm-dtd:text">Subject to paragraph (2), a person who purchases a security in a transaction exempted by the provisions of section 4(6) may bring an action against an issuer described in paragraph (2), either at law or in equity in any court of competent jurisdiction, to recover the consideration paid for such security with interest thereon, less the amount of any income received thereon, upon the tender of such security, or for damages if such person no longer owns the security.</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><heading style="-uslm-dtd:header">Liability. </heading><content style="-uslm-dtd:text">An action brought under this paragraph shall be subject to the provisions of section 12(b) and section 13, as if the liability were created under section 12(a)(2).</content>
</subparagraph>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">“(2) </num><heading style="-uslm-dtd:header">Applicability. </heading><chapeau style="-uslm-dtd:text">An issuer shall be liable in an action under paragraph (1), if the issuer—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><content style="-uslm-dtd:text">by the use of any means or instruments of transportation or communication in interstate commerce or of the mails, by any means of any written or oral communication, in the offering or sale of a security in a transaction exempted by the provisions of section 4(6), makes an untrue statement of a material fact or omits to state a material fact required to be stated or necessary in order to make the statements, in the light of the circumstances under which they were made, not misleading, provided that the purchaser did not know of such untruth or omission; and</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><content style="-uslm-dtd:text">does not sustain the burden of proof that such issuer did not know, and in the exercise of reasonable care could not have known, of such untruth or omission.</content>
</subparagraph>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="3">“(3) </num><heading style="-uslm-dtd:header">Definition. </heading><content style="-uslm-dtd:text">As used in this subsection, the term ‘<quotedText style="-uslm-dtd:quote">issuer</quotedText>’ includes any person who is a director or partner of the issuer, and the principal executive officer or officers, principal financial officer, and controller or principal accounting officer of the issuer (and any person occupying a similar status or performing a similar function) that offers or sells a security in a transaction exempted by the provisions of section 4(6), and any person who offers or sells the security in such offering.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" styleType="OLC">
<num style="-uslm-dtd:enum" value="d">“(d) </num><heading style="-uslm-dtd:header">Information Available to States. </heading><content style="-uslm-dtd:text">The Commission shall make, or shall cause to be made by the relevant broker or funding portal, the information described in subsection (b) and such other information as the Commission, by rule, determines appropriate, available to the securities commission (or any agency or office performing like functions) of each State and territory of the United States and the District of Columbia.</content>
</subsection>
<subsection style="-uslm-dtd:subsection" styleType="OLC">
<num style="-uslm-dtd:enum" value="e">“(e) </num><heading style="-uslm-dtd:header">Restrictions on Sales. </heading><chapeau style="-uslm-dtd:text">Securities issued pursuant to a transaction described in section 4(6)—</chapeau>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">“(1) </num><chapeau style="-uslm-dtd:text">may not be transferred by the purchaser of such securities during the 1-year period beginning on the date of purchase, unless such securities are transferred—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><content style="-uslm-dtd:text">to the issuer of the securities;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><content style="-uslm-dtd:text">to an accredited investor;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="C">“(C) </num><content style="-uslm-dtd:text">as part of an offering registered with the Commission; or</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="D">“(D) </num><content style="-uslm-dtd:text">to a member of the family of the purchaser or the equivalent, or in connection with the death or divorce of the purchaser or other similar circumstance, in the discretion of the Commission; and</content>
</subparagraph>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">“(2) </num><content style="-uslm-dtd:text">shall be subject to such other limitations as the Commission shall, by rule, establish.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" styleType="OLC">
<num style="-uslm-dtd:enum" value="f">“(f) </num><heading style="-uslm-dtd:header">Applicability. </heading><chapeau style="-uslm-dtd:text">Section 4(6) shall not apply to transactions involving the offer or sale of securities by any issuer that—</chapeau>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">“(1) </num><content style="-uslm-dtd:text">is not organized under and subject to the laws of a State or territory of the United States or the District of Columbia;</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">“(2) </num><content style="-uslm-dtd:text">is subject to the requirement to file reports pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934;</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="3">“(3) </num><content style="-uslm-dtd:text">is an investment company, as defined in section 3 of the Investment Company Act of 1940, or is excluded from the definition of investment company by section 3(b) or section 3(c) of that Act; or</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="4">“(4) </num><content style="-uslm-dtd:text">the Commission, by rule or regulation, determines appropriate.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" styleType="OLC">
<num style="-uslm-dtd:enum" value="g">“(g) </num><heading style="-uslm-dtd:header">Rule of Construction. </heading><content style="-uslm-dtd:text">Nothing in this section or section 4(6) shall be construed as preventing an issuer from raising capital through methods not described under section 4(6).</content>
</subsection>
<subsection style="-uslm-dtd:subsection" styleType="OLC">
<num style="-uslm-dtd:enum" value="h">“(h) </num><heading style="-uslm-dtd:header">Certain Calculations. </heading>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">“(1) </num><heading style="-uslm-dtd:header">Dollar amounts. </heading><content style="-uslm-dtd:text">Dollar amounts in section 4(6) and subsection (b) of this section shall be adjusted by the Commission not less frequently than once every 5 years, by notice published in the Federal Register to reflect any change in the Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics.</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">“(2) </num><heading style="-uslm-dtd:header">Income and net worth. </heading><content style="-uslm-dtd:text">The income and net worth of a natural person under section 4(6)(B) shall be calculated in accordance with any rules of the Commission under this title regarding the calculation of the income and net worth, respectively, of an accredited investor.”</content>
</paragraph>
</subsection>
</section></quotedContent>.</content>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tIII/s302/c" styleType="OLC">
<num style="-uslm-dtd:enum" value="c">(c) </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s77d">15 U.S.C. 77d note</ref><b>]</b> </editorialNote><heading style="-uslm-dtd:header">Rulemaking.—</heading><content style="-uslm-dtd:text">Not later than 270 days after the date of enactment of this Act, the Securities and Exchange Commission (in this title referred to as the “<quotedText style="-uslm-dtd:quote">Commission</quotedText>”) shall issue such rules as the Commission determines may be necessary or appropriate for the protection of investors to carry out sections 4(6) and section 4A of the Securities Act of 1933, as added by this title. In carrying out this section, the Commission shall consult with any securities commission (or any agency or office performing like functions) of the States, any territory of the United States, and the District of Columbia, which seeks to consult with the Commission, and with any applicable national securities association.</content>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tIII/s302/d" styleType="OLC">
<num style="-uslm-dtd:enum" value="d">(d) </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s77d">15 U.S.C. 77d note</ref><b>]</b> </editorialNote><heading style="-uslm-dtd:header">Disqualification.—</heading>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tIII/s302/d/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><heading style="-uslm-dtd:header">In general.—</heading><chapeau style="-uslm-dtd:text">Not later than 270 days after the date of enactment of this Act, the Commission shall, by rule, establish disqualification provisions under which—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/112/106/tIII/s302/d/1/A" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">an issuer shall not be eligible to offer securities pursuant to section 4(6) of the Securities Act of 1933, as added by this title; and</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/112/106/tIII/s302/d/1/B" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">a broker or funding portal shall not be eligible to effect or participate in transactions pursuant to that section 4(6).</content>
</subparagraph>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tIII/s302/d/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><heading style="-uslm-dtd:header">Inclusions.—</heading><chapeau style="-uslm-dtd:text">Disqualification provisions required by this subsection shall—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/112/106/tIII/s302/d/2/A" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">be substantially similar to the provisions of section 230.262 of title 17, Code of Federal Regulations (or any successor thereto); and</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/112/106/tIII/s302/d/2/B" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">(B) </num><chapeau style="-uslm-dtd:text">disqualify any offering or sale of securities by a person that—</chapeau>
<clause style="-uslm-dtd:clause" identifier="/us/sComp/112/106/tIII/s302/d/2/B/i" styleType="OLC">
<num style="-uslm-dtd:enum" value="i">(i) </num><chapeau style="-uslm-dtd:text">is subject to a final order of a State securities commission (or an agency or officer of a State performing like functions), a State authority that supervises or examines banks, savings associations, or credit unions, a State insurance commission (or an agency or officer of a State performing like functions), an appropriate Federal banking agency, or the National Credit Union Administration, that—</chapeau>
<subclause style="-uslm-dtd:subclause" identifier="/us/sComp/112/106/tIII/s302/d/2/B/i/I" styleType="OLC">
<num style="-uslm-dtd:enum" value="I">(I) </num><chapeau style="-uslm-dtd:text">bars the person from—</chapeau>
<item style="-uslm-dtd:item" identifier="/us/sComp/112/106/tIII/s302/d/2/B/i/I/aa" styleType="OLC">
<num style="-uslm-dtd:enum" value="aa">(aa) </num><content style="-uslm-dtd:text">association with an entity regulated by such commission, authority, agency, or officer;</content>
</item>
<item style="-uslm-dtd:item" identifier="/us/sComp/112/106/tIII/s302/d/2/B/i/I/bb" styleType="OLC">
<num style="-uslm-dtd:enum" value="bb">(bb) </num><content style="-uslm-dtd:text">engaging in the business of securities, insurance, or banking; or</content>
</item>
<item style="-uslm-dtd:item" identifier="/us/sComp/112/106/tIII/s302/d/2/B/i/I/cc" styleType="OLC">
<num style="-uslm-dtd:enum" value="cc">(cc) </num><content style="-uslm-dtd:text">engaging in savings association or credit union activities; or</content>
</item>
</subclause>
<subclause style="-uslm-dtd:subclause" identifier="/us/sComp/112/106/tIII/s302/d/2/B/i/II" styleType="OLC">
<num style="-uslm-dtd:enum" value="II">(II) </num><content style="-uslm-dtd:text">constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative, or deceptive conduct within the 10-year period ending on the date of the filing of the offer or sale; or</content>
</subclause>
</clause>
<clause style="-uslm-dtd:clause" identifier="/us/sComp/112/106/tIII/s302/d/2/B/ii" styleType="OLC">
<num style="-uslm-dtd:enum" value="ii">(ii) </num><content style="-uslm-dtd:text">has been convicted of any felony or misdemeanor in connection with the purchase or sale of any security or involving the making of any false filing with the Commission.</content>
</clause>
</subparagraph>
</paragraph>
</subsection>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tIII/s303" styleType="OLC">
<num style="-uslm-dtd:enum" value="303">SEC. 303. </num><heading style="-uslm-dtd:header">EXCLUSION OF CROWDFUNDING INVESTORS FROM SHAREHOLDER CAP. </heading>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tIII/s303/a" styleType="OLC">
<num style="-uslm-dtd:enum" value="a">(a) </num><heading style="-uslm-dtd:header">Exemption.—</heading><content style="-uslm-dtd:text">Section 12(g) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(g)) is amended by adding at the end the following:<quotedContent style="-uslm-dtd:quoted-block">
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="6">“(6) </num><heading style="-uslm-dtd:header">Exclusion for persons holding certain securities. </heading><content style="-uslm-dtd:text">The Commission shall, by rule, exempt, conditionally or unconditionally, securities acquired pursuant to an offering made under section 4(6) of the Securities Act of 1933 from the provisions of this subsection.”</content>
</paragraph></quotedContent>.</content>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tIII/s303/b" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">(b) </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s78l">15 U.S.C. 78l note</ref><b>]</b> </editorialNote><heading style="-uslm-dtd:header">Rulemaking.—</heading><content style="-uslm-dtd:text">The Commission shall issue a rule to carry out section 12(g)(6) of the Securities Exchange Act of 1934 (15 U.S.C. 78c), as added by this section, not later than 270 days after the date of enactment of this Act.</content>
</subsection>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tIII/s304" styleType="OLC">
<num style="-uslm-dtd:enum" value="304">SEC. 304. </num><heading style="-uslm-dtd:header">FUNDING PORTAL REGULATION. </heading>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tIII/s304/a" styleType="OLC">
<num style="-uslm-dtd:enum" value="a">(a) </num><heading style="-uslm-dtd:header">Exemption.—</heading>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tIII/s304/a/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><heading style="-uslm-dtd:header">In general.—</heading><content style="-uslm-dtd:text">Section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c) is amended by adding at the end the following:<quotedContent style="-uslm-dtd:quoted-block">
<subsection style="-uslm-dtd:subsection" styleType="OLC">
<num style="-uslm-dtd:enum" value="h">“(h) </num><heading style="-uslm-dtd:header">Limited Exemption for Funding Portals. </heading>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">“(1) </num><heading style="-uslm-dtd:header">In general. </heading><chapeau style="-uslm-dtd:text">The Commission shall, by rule, exempt, conditionally or unconditionally, a registered funding portal from the requirement to register as a broker or dealer under section 15(a)(1), provided that such funding portal—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><content style="-uslm-dtd:text">remains subject to the examination, enforcement, and other rulemaking authority of the Commission;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><content style="-uslm-dtd:text">is a member of a national securities association registered under section 15A; and</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="C">“(C) </num><content style="-uslm-dtd:text">is subject to such other requirements under this title as the Commission determines appropriate under such rule.</content>
</subparagraph>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">“(2) </num><heading style="-uslm-dtd:header">National securities association membership. </heading><content style="-uslm-dtd:text">For purposes of sections 15(b)(8) and 15A, the term ‘<quotedText style="-uslm-dtd:quote">broker or dealer</quotedText>’ includes a funding portal and the term ‘<quotedText style="-uslm-dtd:quote">registered broker or dealer</quotedText>’ includes a registered funding portal, except to the extent that the Commission, by rule, determines otherwise, provided that a national securities association shall only examine for and enforce against a registered funding portal rules of such national securities association written specifically for registered funding portals.”</content>
</paragraph>
</subsection></quotedContent>.</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tIII/s304/a/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s78c">15 U.S.C. 78c note</ref><b>]</b> </editorialNote><heading style="-uslm-dtd:header">Rulemaking.—</heading><content style="-uslm-dtd:text">The Commission shall issue a rule to carry out section 3(h) of the Securities Exchange Act of 1934 (15 U.S.C. 78c), as added by this subsection, not later than 270 days after the date of enactment of this Act.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tIII/s304/b" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">(b) </num><heading style="-uslm-dtd:header">Definition.—</heading><content style="-uslm-dtd:text">Section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended by adding at the end the following:<quotedContent style="-uslm-dtd:quoted-block">
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="80">“(80) </num><heading style="-uslm-dtd:header">Funding portal. </heading><chapeau style="-uslm-dtd:text">The term ‘<quotedText style="-uslm-dtd:quote">funding portal</quotedText>’ means any person acting as an intermediary in a transaction involving the offer or sale of securities for the account of others, solely pursuant to section 4(6) of the Securities Act of 1933 (15 U.S.C. 77d(6)), that does not—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><content style="-uslm-dtd:text">offer investment advice or recommendations;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><content style="-uslm-dtd:text">solicit purchases, sales, or offers to buy the securities offered or displayed on its website or portal;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="C">“(C) </num><content style="-uslm-dtd:text">compensate employees, agents, or other persons for such solicitation or based on the sale of securities displayed or referenced on its website or portal;</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="D">“(D) </num><content style="-uslm-dtd:text">hold, manage, possess, or otherwise handle investor funds or securities; or</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="E">“(E) </num><content style="-uslm-dtd:text">engage in such other activities as the Commission, by rule, determines appropriate.”</content>
</subparagraph>
</paragraph></quotedContent>.</content>
</subsection>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tIII/s305" styleType="OLC">
<num style="-uslm-dtd:enum" value="305">SEC. 305. </num><heading style="-uslm-dtd:header">RELATIONSHIP WITH STATE LAW. </heading>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tIII/s305/a" styleType="OLC">
<num style="-uslm-dtd:enum" value="a">(a) </num><heading style="-uslm-dtd:header">In General.—</heading><chapeau style="-uslm-dtd:text">Section 18(b)(4) of the Securities Act of 1933 (15 U.S.C. 77r(b)(4)) is amended—</chapeau>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tIII/s305/a/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">by redesignating subparagraphs (C) and (D) as subparagraphs (D) and (E), respectively; and</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tIII/s305/a/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">by inserting after subparagraph (B) the following:<quotedContent style="-uslm-dtd:quoted-block">
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="C">“(C) </num><content style="-uslm-dtd:text">section 4(6);”</content>
</subparagraph></quotedContent>.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tIII/s305/b" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">(b) </num><heading style="-uslm-dtd:header">Clarification of the Preservation of State Enforcement Authority.—</heading>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tIII/s305/b/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s77r">15 U.S.C. 77r note</ref><b>]</b> </editorialNote><heading style="-uslm-dtd:header">In general.—</heading><content style="-uslm-dtd:text">The amendments made by subsection (a) relate solely to State registration, documentation, and offering requirements, as described under section 18(a) of Securities Act of 1933 (15 U.S.C. 77r(a)), and shall have no impact or limitation on other State authority to take enforcement action with regard to an issuer, funding portal, or any other person or entity using the exemption from registration provided by section 4(6) of that Act.</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tIII/s305/b/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><heading style="-uslm-dtd:header">Clarification of state jurisdiction over unlawful conduct of funding portals and issuers.—</heading><content style="-uslm-dtd:text">Section 18(c)(1) of the Securities Act of 1933 (15 U.S.C. 77r(c)(1)) is amended by striking “<quotedText style="-uslm-dtd:quote">with respect to fraud or deceit, or unlawful conduct by a broker or dealer, in connection with securities or securities transactions.</quotedText>” and inserting the following:<quotedContent style="-uslm-dtd:quoted-block" class="inline"><chapeau style="-uslm-dtd:text">“, in connection with securities or securities transactions</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><chapeau style="-uslm-dtd:text">with respect to—</chapeau>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="i">“(i) </num><content style="-uslm-dtd:text">fraud or deceit; or</content>
</clause>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="ii">“(ii) </num><content style="-uslm-dtd:text">unlawful conduct by a broker or dealer; and</content>
</clause>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><chapeau style="-uslm-dtd:text">in connection to a transaction described under section 4(6), with respect to—</chapeau>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="i">“(i) </num><content style="-uslm-dtd:text">fraud or deceit; or</content>
</clause>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="ii">“(ii) </num><content style="-uslm-dtd:text">unlawful conduct by a broker, dealer, funding portal, or issuer.”</content>
</clause>
</subparagraph></quotedContent>.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tIII/s305/c" styleType="OLC">
<num style="-uslm-dtd:enum" value="c">(c) </num><heading style="-uslm-dtd:header">Notice Filings Permitted.—</heading><content style="-uslm-dtd:text">Section 18(c)(2) of the Securities Act of 1933 (15 U.S.C. 77r(c)(2)) is amended by adding at the end the following:<quotedContent style="-uslm-dtd:quoted-block">
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="F">“(F) </num><heading style="-uslm-dtd:header">Fees not permitted on crowdfunded securities. </heading><content style="-uslm-dtd:text">Notwithstanding subparagraphs (A), (B), and (C), no filing or fee may be required with respect to any security that is a covered security pursuant to subsection (b)(4)(B), or will be such a covered security upon completion of the transaction, except for the securities commission (or any agency or office performing like functions) of the State of the principal place of business of the issuer, or any State in which purchasers of 50 percent or greater of the aggregate amount of the issue are residents, provided that for purposes of this subparagraph, the term ‘<quotedText style="-uslm-dtd:quote">State</quotedText>’ includes the District of Columbia and the territories of the United States.”</content>
</subparagraph></quotedContent>.</content>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tIII/s305/d" styleType="OLC">
<num style="-uslm-dtd:enum" value="d">(d) </num><heading style="-uslm-dtd:header">Funding Portals.—</heading>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tIII/s305/d/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><heading style="-uslm-dtd:header">State exemptions and oversight.—</heading><chapeau style="-uslm-dtd:text">Section 15(i) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(i)) is amended—</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/112/106/tIII/s305/d/1/A" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">(A) </num><content style="-uslm-dtd:text">by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; and</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" identifier="/us/sComp/112/106/tIII/s305/d/1/B" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">(B) </num><content style="-uslm-dtd:text">by inserting after paragraph (1) the following:<quotedContent style="-uslm-dtd:quoted-block">
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">“(2) </num><heading style="-uslm-dtd:header">Funding portals. </heading>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><heading style="-uslm-dtd:header">Limitation on state laws. </heading><content style="-uslm-dtd:text">Except as provided in subparagraph (B), no State or political subdivision thereof may enforce any law, rule, regulation, or other administrative action against a registered funding portal with respect to its business as such.</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><heading style="-uslm-dtd:header">Examination and enforcement authority. </heading><content style="-uslm-dtd:text">Subparagraph (A) does not apply with respect to the examination and enforcement of any law, rule, regulation, or administrative action of a State or political subdivision thereof in which the principal place of business of a registered funding portal is located, provided that such law, rule, regulation, or administrative action is not in addition to or different from the requirements for registered funding portals established by the Commission.</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="C">“(C) </num><heading style="-uslm-dtd:header">Definition. </heading><content style="-uslm-dtd:text">For purposes of this paragraph, the term ‘<quotedText style="-uslm-dtd:quote">State</quotedText>’ includes the District of Columbia and the territories of the United States.”</content>
</subparagraph>
</paragraph></quotedContent>.</content>
</subparagraph>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tIII/s305/d/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><heading style="-uslm-dtd:header">State fraud authority.—</heading><content style="-uslm-dtd:text">Section 18(c)(1) of the Securities Act of 1933 (15 U.S.C. 77r(c)(1)) is amended by striking “<quotedText style="-uslm-dtd:quote">or dealer</quotedText>” and inserting “<quotedText style="-uslm-dtd:quote">, dealer, or funding portal</quotedText>”.</content>
</paragraph>
</subsection>
</section>
<num style="-uslm-dtd:enum" value="IV">TITLE IV—</num><heading style="-uslm-dtd:header">SMALL COMPANY CAPITAL FORMATION </heading>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tIV/s401" styleType="OLC">
<num style="-uslm-dtd:enum" value="401">SEC. 401. </num><heading style="-uslm-dtd:header">AUTHORITY TO EXEMPT CERTAIN SECURITIES. </heading>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tIV/s401/a" styleType="OLC">
<num style="-uslm-dtd:enum" value="a">(a) </num><heading style="-uslm-dtd:header">In General.—</heading><chapeau style="-uslm-dtd:text">Section 3(b) of the Securities Act of 1933 (15 U.S.C. 77c(b)) is amended—</chapeau>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tIV/s401/a/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">by striking “<quotedText style="-uslm-dtd:quote">(b) The Commission</quotedText>” and inserting the following:<quotedContent style="-uslm-dtd:quoted-block">
<subsection style="-uslm-dtd:subsection" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">“(b) </num><heading style="-uslm-dtd:header">Additional Exemptions. </heading>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">“(1) </num><heading style="-uslm-dtd:header">Small issues exemptive authority. </heading><content style="-uslm-dtd:text">The Commission”</content>
</paragraph>
</subsection></quotedContent>; and</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tIV/s401/a/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">by adding at the end the following:<quotedContent style="-uslm-dtd:quoted-block">
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">“(2) </num><heading style="-uslm-dtd:header">Additional issues. </heading><chapeau style="-uslm-dtd:text">The Commission shall by rule or regulation add a class of securities to the securities exempted pursuant to this section in accordance with the following terms and conditions:</chapeau>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="A">“(A) </num><content style="-uslm-dtd:text">The aggregate offering amount of all securities offered and sold within the prior 12-month period in reliance on the exemption added in accordance with this paragraph shall not exceed $50,000,000.</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="B">“(B) </num><content style="-uslm-dtd:text">The securities may be offered and sold publicly.</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="C">“(C) </num><content style="-uslm-dtd:text">The securities shall not be restricted securities within the meaning of the Federal securities laws and the regulations promulgated thereunder.</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="D">“(D) </num><content style="-uslm-dtd:text">The civil liability provision in section 12(a)(2) shall apply to any person offering or selling such securities.</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="E">“(E) </num><content style="-uslm-dtd:text">The issuer may solicit interest in the offering prior to filing any offering statement, on such terms and conditions as the Commission may prescribe in the public interest or for the protection of investors.</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="F">“(F) </num><content style="-uslm-dtd:text">The Commission shall require the issuer to file audited financial statements with the Commission annually.</content>
</subparagraph>
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="G">“(G) </num><chapeau style="-uslm-dtd:text">Such other terms, conditions, or requirements as the Commission may determine necessary in the public interest and for the protection of investors, which may include—</chapeau>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="i">“(i) </num><content style="-uslm-dtd:text">a requirement that the issuer prepare and electronically file with the Commission and distribute to prospective investors an offering statement, and any related documents, in such form and with such content as prescribed by the Commission, including audited financial statements, a description of the issuer’s business operations, its financial condition, its corporate governance principles, its use of investor funds, and other appropriate matters; and</content>
</clause>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="ii">“(ii) </num><content style="-uslm-dtd:text">disqualification provisions under which the exemption shall not be available to the issuer or its predecessors, affiliates, officers, directors, underwriters, or other related persons, which shall be substantially similar to the disqualification provisions contained in the regulations adopted in accordance with section 926 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C. 77d note).</content>
</clause>
</subparagraph>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="3">“(3) </num><heading style="-uslm-dtd:header">Limitation. </heading><content style="-uslm-dtd:text">Only the following types of securities may be exempted under a rule or regulation adopted pursuant to paragraph (2): equity securities, debt securities, and debt securities convertible or exchangeable to equity interests, including any guarantees of such securities.</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="4">“(4) </num><heading style="-uslm-dtd:header">Periodic disclosures. </heading><content style="-uslm-dtd:text">Upon such terms and conditions as the Commission determines necessary in the public interest and for the protection of investors, the Commission by rule or regulation may require an issuer of a class of securities exempted under paragraph (2) to make available to investors and file with the Commission periodic disclosures regarding the issuer, its business operations, its financial condition, its corporate governance principles, its use of investor funds, and other appropriate matters, and also may provide for the suspension and termination of such a requirement with respect to that issuer.</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="5">“(5) </num><heading style="-uslm-dtd:header">Adjustment. </heading><content style="-uslm-dtd:text">Not later than 2 years after the date of enactment of the Small Company Capital Formation Act of 2011 and every 2 years thereafter, the Commission shall review the offering amount limitation described in paragraph (2)(A) and shall increase such amount as the Commission determines appropriate. If the Commission determines not to increase such amount, it shall report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate on its reasons for not increasing the amount.”</content>
</paragraph></quotedContent>.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tIV/s401/b" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">(b) </num><heading style="-uslm-dtd:header">Treatment as Covered Securities for Purposes of NSMIA.—</heading><content style="-uslm-dtd:text">Section 18(b)(4) of the Securities Act of 1933 (as amended by section 303) (15 U.S.C. 77r(b)(4)) is further amended by inserting after subparagraph (C) (as added by such section) the following:<quotedContent style="-uslm-dtd:quoted-block">
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC">
<num style="-uslm-dtd:enum" value="D">“(D) </num><chapeau style="-uslm-dtd:text">a rule or regulation adopted pursuant to section 3(b)(2) and such security is—</chapeau>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="i">“(i) </num><content style="-uslm-dtd:text">offered or sold on a national securities exchange; or</content>
</clause>
<clause style="-uslm-dtd:clause" styleType="OLC">
<num style="-uslm-dtd:enum" value="ii">“(ii) </num><content style="-uslm-dtd:text">offered or sold to a qualified purchaser, as defined by the Commission pursuant to paragraph (3) with respect to that purchase or sale;”</content>
</clause>
</subparagraph></quotedContent>.</content>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tIV/s401/c" styleType="OLC">
<num style="-uslm-dtd:enum" value="c">(c) </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s77d">15 U.S.C. 77d</ref><b>]</b> </editorialNote><heading style="-uslm-dtd:header">Conforming Amendment.—</heading><content style="-uslm-dtd:text">Section 4(5) of the Securities Act of 1933 is amended by striking “<quotedText style="-uslm-dtd:quote">section 3(b)</quotedText>” and inserting “<quotedText style="-uslm-dtd:quote">section 3(b)(1)</quotedText>”.</content>
</subsection>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tIV/s402" styleType="OLC">
<num style="-uslm-dtd:enum" value="402">SEC. 402. </num><heading style="-uslm-dtd:header">STUDY ON THE IMPACT OF STATE BLUE SKY LAWS ON REGULATION A OFFERINGS. </heading>
<content style="-uslm-dtd:text" class="block">The Comptroller General shall conduct a study on the impact of State laws regulating securities offerings, or “<quotedText style="-uslm-dtd:quote">Blue Sky laws</quotedText>”, on offerings made under Regulation A (17 CFR 230.251 et seq.). The Comptroller General shall transmit a report on the findings of the study to the Committee on Financial Services of the House of Representatives, and the Committee on Banking, Housing, and Urban Affairs of the Senate not later than 3 months after the date of enactment of this Act.</content>
</section>
<num style="-uslm-dtd:enum" value="V">TITLE V—</num><heading style="-uslm-dtd:header">PRIVATE COMPANY FLEXIBILITY AND GROWTH </heading>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tV/s501" styleType="OLC">
<num style="-uslm-dtd:enum" value="501">SEC. 501. </num><heading style="-uslm-dtd:header">THRESHOLD FOR REGISTRATION. </heading>
<content style="-uslm-dtd:text" class="block">Section 12(g)(1)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(g)(1)(A)) is amended to read as follows:<quotedContent style="-uslm-dtd:quoted-block">
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC" class="leftIndentDecrease1">
<num style="-uslm-dtd:enum" value="A">“(A) </num><chapeau style="-uslm-dtd:text">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 either—</chapeau>
<clause style="-uslm-dtd:clause" styleType="OLC" class="leftIndentDecrease1">
<num style="-uslm-dtd:enum" value="i">“(i) </num><content style="-uslm-dtd:text">2,000 persons, or</content>
</clause>
<clause style="-uslm-dtd:clause" styleType="OLC" class="leftIndentDecrease1">
<num style="-uslm-dtd:enum" value="ii">“(ii) </num><content style="-uslm-dtd:text">500 persons who are not accredited investors (as such term is defined by the Commission), and”</content>
</clause>
</subparagraph></quotedContent>.</content>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tV/s502" styleType="OLC">
<num style="-uslm-dtd:enum" value="502">SEC. 502. </num><heading style="-uslm-dtd:header">EMPLOYEES. </heading>
<content style="-uslm-dtd:text" class="block">Section 12(g)(5) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(g)(5)), as amended by section 302, is amended in subparagraph (A) by adding at the end the following: “<quotedText style="-uslm-dtd:quote">For purposes of determining whether an issuer is required to register a security with the Commission pursuant to paragraph (1), the definition of ‘<quotedText style="-uslm-dtd:quote">held of record</quotedText>’ 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.</quotedText>”.</content>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tV/s503" styleType="OLC">
<num style="-uslm-dtd:enum" value="503">SEC. 503. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s78l">15 U.S.C. 78l note</ref><b>]</b> </editorialNote><heading style="-uslm-dtd:header">COMMISSION RULEMAKING. </heading>
<content style="-uslm-dtd:text" class="block">The Securities and Exchange Commission shall revise the definition of “<quotedText style="-uslm-dtd:quote">held of record</quotedText>” 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 502. The Commission shall also adopt safe harbor provisions that issuers can follow when determining whether 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.</content>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tV/s504" styleType="OLC">
<num style="-uslm-dtd:enum" value="504">SEC. 504. </num><heading style="-uslm-dtd:header">COMMISSION STUDY OF ENFORCEMENT AUTHORITY UNDER RULE 12G5-1. </heading>
<content style="-uslm-dtd:text" class="block">The Securities and Exchange Commission shall examine its authority to enforce Rule 12g5-1 to determine if new enforcement tools are needed to enforce the anti-evasion provision contained in subsection (b)(3) of the rule, and shall, not later than 120 days after the date of enactment of this Act transmit its recommendations to Congress.</content>
</section>
<num style="-uslm-dtd:enum" value="VI">TITLE VI—</num><heading style="-uslm-dtd:header">CAPITAL EXPANSION </heading>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tVI/s601" styleType="OLC">
<num style="-uslm-dtd:enum" value="601">SEC. 601. </num><heading style="-uslm-dtd:header">SHAREHOLDER THRESHOLD FOR REGISTRATION. </heading>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tVI/s601/a" styleType="OLC">
<num style="-uslm-dtd:enum" value="a">(a) </num><heading style="-uslm-dtd:header">Amendments to Section 12 of the Securities Exchange Act of 1934.—</heading><chapeau style="-uslm-dtd:text">Section 12(g) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(g)) is further amended—</chapeau>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tVI/s601/a/1" styleType="OLC">
<num style="-uslm-dtd:enum" value="1">(1) </num><content style="-uslm-dtd:text">in paragraph (1), by amending subparagraph (B) to read as follows:<quotedContent style="-uslm-dtd:quoted-block">
<subparagraph style="-uslm-dtd:subparagraph" styleType="OLC" class="leftIndentDecrease1">
<num style="-uslm-dtd:enum" value="B">“(B) </num><content style="-uslm-dtd:text">in the case of an issuer that is a bank or a bank holding company, as such term is defined in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841), not later than 120 days after the last day of its first fiscal year ended after the effective date of this subsection, 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 2,000 or more persons,”</content>
</subparagraph></quotedContent>; and</content>
</paragraph>
<paragraph style="-uslm-dtd:paragraph" identifier="/us/sComp/112/106/tVI/s601/a/2" styleType="OLC">
<num style="-uslm-dtd:enum" value="2">(2) </num><content style="-uslm-dtd:text">in paragraph (4), by striking “<quotedText style="-uslm-dtd:quote">three hundred</quotedText>” and inserting “<quotedText style="-uslm-dtd:quote">300 persons, or, in the case of a bank or a bank holding company, as such term is defined in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841), 1,200 persons</quotedText>”.</content>
</paragraph>
</subsection>
<subsection style="-uslm-dtd:subsection" identifier="/us/sComp/112/106/tVI/s601/b" styleType="OLC">
<num style="-uslm-dtd:enum" value="b">(b) </num><heading style="-uslm-dtd:header">Amendments to Section 15 of the Securities Exchange Act of 1934.—</heading><content style="-uslm-dtd:text">Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(d)) is amended, in the third sentence, by striking “<quotedText style="-uslm-dtd:quote">three hundred</quotedText>” and inserting “<quotedText style="-uslm-dtd:quote">300 persons, or, in the case of bank or a bank holding company, as such term is defined in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841), 1,200 persons</quotedText>”.</content>
</subsection>
</section>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tVI/s602" styleType="OLC">
<num style="-uslm-dtd:enum" value="602">SEC. 602. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s78l">15 U.S.C. 78l note</ref><b>]</b> </editorialNote><heading style="-uslm-dtd:header">RULEMAKING. </heading>
<content style="-uslm-dtd:text" class="block">Not later than 1 year after the date of enactment of this Act, the Securities and Exchange Commission shall issue final regulations to implement this title and the amendments made by this title.</content>
</section>
<num style="-uslm-dtd:enum" value="VII">TITLE VII—</num><heading style="-uslm-dtd:header">OUTREACH ON CHANGES TO THE LAW </heading>
<section style="-uslm-dtd:section" identifier="/us/sComp/112/106/tVII/s701" styleType="OLC">
<num style="-uslm-dtd:enum" value="701">SEC. 701. </num><editorialNote style="-uslm-dtd:usc-reference" role="uscRef"><b>[</b><ref href="/us/usc/t15/s78d">15 U.S.C. 78d note</ref><b>]</b> </editorialNote><heading style="-uslm-dtd:header">OUTREACH BY THE COMMISSION. </heading>
<content style="-uslm-dtd:text" class="block">The Securities and Exchange Commission shall provide online information and conduct outreach to inform small and medium sized businesses, women owned businesses, veteran owned businesses, and minority owned businesses of the changes made by this Act.</content>
</section>