[United States Statutes at Large, Volume 126, 112th Congress, 2nd Session]
[From the U.S. Government Publishing Office, www.gpo.gov]


Public Law 112-106
112th Congress

An Act


 
To 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. Short title.
Sec. 2. Table of contents.

TITLE I--REOPENING AMERICAN CAPITAL MARKETS TO EMERGING GROWTH COMPANIES

Sec. 101. Definitions.
Sec. 102. Disclosure obligations.
Sec. 103. Internal controls audit.
Sec. 104. Auditing standards.
Sec. 105. Availability of information about emerging growth companies.
Sec. 106. Other matters.
Sec. 107. Opt-in right for emerging growth companies.
Sec. 108. Review of Regulation S-K.

TITLE II--ACCESS TO CAPITAL FOR JOB CREATORS

Sec. 201. Modification of exemption.

TITLE III--CROWDFUNDING

Sec. 301. Short title.
Sec. 302. Crowdfunding exemption.
Sec. 303. Exclusion of crowdfunding investors from shareholder cap.
Sec. 304. Funding portal regulation.
Sec. 305. Relationship with State law.

TITLE IV--SMALL COMPANY CAPITAL FORMATION

Sec. 401. Authority to exempt certain securities.
Sec. 402. Study on the impact of State Blue Sky laws on Regulation A
offerings.

TITLE V--PRIVATE COMPANY FLEXIBILITY AND GROWTH

Sec. 501. Threshold for registration.
Sec. 502. Employees.
Sec. 503. Commission rulemaking.
Sec. 504. Commission study of enforcement authority under Rule 12g5-1.

TITLE VI--CAPITAL EXPANSION

Sec. 601. Shareholder threshold for registration.
Sec. 602. Rulemaking.

TITLE VII--OUTREACH ON CHANGES TO THE LAW

Sec. 701. Outreach by the Commission.

[[Page 307]]

TITLE I--REOPENING AMERICAN CAPITAL MARKETS TO EMERGING GROWTH COMPANIES

SEC. 101. DEFINITIONS.

(a) Securities Act of 1933.--Section 2(a) of the Securities Act of
1933 (15 U.S.C. 77b(a)) is amended by adding at the end the following:
``(19) The term `emerging growth company' 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--
``(A) 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;
``(B) 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;
``(C) 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
``(D) the date on which such issuer is deemed to be
a `large accelerated filer', as defined in section
240.12b-2 of title 17, Code of Federal Regulations, or
any successor thereto.''.

(b) Securities Exchange Act of 1934.--Section 3(a) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended--
(1) 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
(2) by adding at the end the following:
``(80) Emerging growth company.--The term `emerging growth
company' 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--

[[Page 308]]

``(A) 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;
``(B) 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;
``(C) 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
``(D) the date on which such issuer is deemed to be
a `large accelerated filer', as defined in section
240.12b-2 of title 17, Code of Federal Regulations, or
any successor thereto.''.

(c) <>  Other Definitions.--
As used in this title, the following definitions shall apply:
(1) Commission.--The term ``Commission'' means the
Securities and Exchange Commission.
(2) Initial public offering date.--The term ``initial public
offering date'' 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.

(d) <>  Effective Date.--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.
SEC. 102. DISCLOSURE OBLIGATIONS.

(a) Executive Compensation.--
(1) Exemption.--Section 14A(e) of the Securities Exchange
Act of 1934 (15 U.S.C. 78n-1(e)) is amended--
(A) by striking ``The Commission may'' and inserting
the following:
``(1) In general.--The Commission may'';
(B) by striking ``an issuer'' and inserting ``any
other issuer''; and
(C) by adding at the end the following:
``(2) Treatment of emerging growth companies.--
``(A) In general.--An emerging growth company shall
be exempt from the requirements of subsections (a) and
(b).
``(B) <>  Compliance after
termination of emerging growth company treatment.--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--
``(i) in the case of an issuer that was an
emerging growth company for less than 2 years
after the date

[[Page 309]]

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
``(ii) in the case of any other issuer, the 1-
year period beginning on the date the issuer is no
longer an emerging growth company.''.
(2) Proxies.--Section 14(i) of the Securities Exchange Act
of 1934 (15 U.S.C. 78n(i)) is amended by inserting ``, for any
issuer other than an emerging growth company,'' after
``including''.
(3) Compensation disclosures.--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 ``, other than an emerging growth company,
as that term is defined in section 3(a) of the Securities
Exchange Act of 1934,'' after ``require each issuer''.

(b) Financial Disclosures and Accounting Pronouncements.--
(1) Securities act of 1933.--Section 7(a) of the Securities
Act of 1933 (15 U.S.C. 77g(a)) is amended--
(A) by striking ``(a) The registration'' and
inserting the following:

``(a) Information Required in Registration Statement.--
``(1) In general.--The registration''; and
(B) by adding at the end the following:
``(2) Treatment of emerging growth companies.--An emerging
growth company--
``(A) 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
``(B) 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.''.
(2) Securities exchange act of 1934.--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: ``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

[[Page 310]]

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.''.

(c) <>  Other Disclosures.--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.
SEC. 103. INTERNAL CONTROLS AUDIT.

Section 404(b) of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 7262(b))
is amended by inserting ``, other than an issuer that is an emerging
growth company (as defined in section 3 of the Securities Exchange Act
of 1934),'' before ``shall attest to''.
SEC. 104. AUDITING STANDARDS.

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:
``(C) Transition period for emerging growth
companies.--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.''.
SEC. 105. AVAILABILITY OF INFORMATION ABOUT EMERGING GROWTH
COMPANIES.

(a) Provision of Research.--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: ``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
`research report' means a written, electronic, or oral communication

[[Page 311]]

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.''.

(b) Securities Analyst Communications.--Section 15D of the
Securities Exchange Act of 1934 (15 U.S.C. 78o-6) is amended--
(1) by redesignating subsection (c) as subsection (d); and
(2) by inserting after subsection (b) the following:

``(c) Limitation.--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--
``(1) 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
``(2) 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.''.

(c) Expanding Permissible Communications.--Section 5 of the
Securities Act of 1933 (15 U.S.C. 77e) is amended--
(1) by redesignating subsection (d) as subsection (e); and
(2) by inserting after subsection (c) the following:

``(d) Limitation.--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).''.
(d) <>  Post Offering Communications.--
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--
(1) within any prescribed period of time following the
initial public offering date of the emerging growth company; or
(2) 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.

[[Page 312]]

SEC. 106. OTHER MATTERS.

(a) Draft Registration Statements.--Section 6 of the Securities Act
of 1933 (15 U.S.C. 77f) is amended by adding at the end the following:
``(e) Emerging Growth Companies.--
``(1) <>  In general.--
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.
``(2) Confidentiality.--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.''.

(b) Tick Size.--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:
``(6) Tick size.--
``(A) Study and report.--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.
``(B) <>
Designation.--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.''.
SEC. 107. <> OPT-IN RIGHT FOR EMERGING
GROWTH COMPANIES.

(a) In General.--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

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forgo such exemption and instead comply with the requirements that apply
to an issuer that is not an emerging growth company.
(b) Special Rule.--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--
(1) <>  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;
(2) 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
(3) 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.
SEC. 108. REVIEW OF REGULATION S-K.

(a) Review.--The Securities and Exchange Commission shall conduct a
review of its Regulation S-K (17 CFR 229.10 et seq.) to--
(1) comprehensively analyze the current registration
requirements of such regulation; and
(2) 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.

(b) Report.--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.

TITLE II--ACCESS TO CAPITAL FOR JOB CREATORS

SEC. 201. MODIFICATION OF EXEMPTION.

(a) <>  Modification of Rules.--
(1) <>  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

[[Page 314]]

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)).
(2) 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.

(b) Consistency in Interpretation.--Section 4 of the Securities Act
of 1933 (15 U.S.C. 77d) is amended--
(1) by striking ``The provisions of section 5'' and
inserting ``(a) The provisions of section 5''; and
(2) by adding at the end the following:

``(b) 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.''.
(c) Explanation of Exemption.--Section 4 of the Securities Act of
1933 (15 U.S.C. 77d) is amended--
(1) by striking ``The provisions of section 5'' and
inserting ``(a) The provisions of section 5''; and
(2) by adding at the end the following:

``(b)(1) 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--
``(A) 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;
``(B) that person or any person associated with that
person co-invests in such securities; or
``(C) that person or any person associated with that
person provides ancillary services with respect to such
securities.

``(2) <>  The exemption provided in paragraph
(1) shall apply to any person described in such paragraph if--
``(A) such person and each person associated with that
person receives no compensation in connection with the purchase
or sale of such security;
``(B) 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
``(C) such person is not subject to a statutory
disqualification as defined in section 3(a)(39) of this title
and does not

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have any person associated with that person subject to such a
statutory disqualification.

``(3) <>  For the purposes of this subsection,
the term `ancillary services' means--
``(A) 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
``(B) 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.''.

TITLE <>  III--CROWDFUNDING
SEC. 301. SHORT TITLE.

This title may be cited as the ``Capital Raising Online While
Deterring Fraud and Unethical Non-Disclosure Act of 2012'' or the
``CROWDFUND Act''.
SEC. 302. CROWDFUNDING EXEMPTION.

(a) Securities Act of 1933.--Section 4 of the Securities Act of 1933
(15 U.S.C. 77d) is amended by adding at the end the following:
``(6) 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--
``(A) 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;
``(B) 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--
``(i) 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
``(ii) 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;
``(C) the transaction is conducted through a broker
or funding portal that complies with the requirements of
section 4A(a); and
``(D) the issuer complies with the requirements of
section 4A(b).''.

(b) Requirements To Qualify for Crowdfunding Exemption.--The
Securities Act of 1933 (15 U.S.C. 77a et seq.) is amended by inserting
after section 4 the following:

[[Page 316]]

``SEC. 4A. <> REQUIREMENTS WITH RESPECT TO
CERTAIN SMALL TRANSACTIONS.

``(a) <>  Requirements on Intermediaries.--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--
``(1) register with the Commission as--
``(A) a broker; or
``(B) a funding portal (as defined in section
3(a)(80) of the Securities Exchange Act of 1934);
``(2) register with any applicable self-regulatory
organization (as defined in section 3(a)(26) of the Securities
Exchange Act of 1934);
``(3) provide such disclosures, including disclosures
related to risks and other investor education materials, as the
Commission shall, by rule, determine appropriate;
``(4) ensure that each investor--
``(A) reviews investor-education information, in
accordance with standards established by the Commission,
by rule;
``(B) 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
``(C) answers questions demonstrating--
``(i) an understanding of the level of risk
generally applicable to investments in startups,
emerging businesses, and small issuers;
``(ii) an understanding of the risk of
illiquidity; and
``(iii) an understanding of such other matters
as the Commission determines appropriate, by rule;
``(5) 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;
``(6) <>  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);
``(7) 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;
``(8) <>  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);
``(9) <>  take such steps to protect
the privacy of information collected from investors as the
Commission shall, by rule, determine appropriate;

[[Page 317]]

``(10) not compensate promoters, finders, or lead generators
for providing the broker or funding portal with the personal
identifying information of any potential investor;
``(11) 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
``(12) meet such other requirements as the Commission may,
by rule, prescribe, for the protection of investors and in the
public interest.

``(b) Requirements for Issuers.--For purposes of section 4(6), an
issuer who offers or sells securities shall--
``(1) file with the Commission and provide to investors and
the relevant broker or funding portal, and make available to
potential investors--
``(A) the name, legal status, physical address, and
website address of the issuer;
``(B) 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;
``(C) a description of the business of the issuer
and the anticipated business plan of the issuer;
``(D) <>  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--
``(i) $100,000 or less--
``(I) the income tax returns filed
by the issuer for the most recently
completed year (if any); and
``(II) 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;
``(ii) 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
``(iii) more than $500,000 (or such other
amount as the Commission may establish, by rule),
audited financial statements;
``(E) 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;
``(F) 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;
``(G) 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;

[[Page 318]]

``(H) a description of the ownership and capital
structure of the issuer, including--
``(i) 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;
``(ii) 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;
``(iii) the name and ownership level of each
existing shareholder who owns more than 20 percent
of any class of the securities of the issuer;
``(iv) 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
``(v) 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
``(I) such other information as the Commission may,
by rule, prescribe, for the protection of investors and
in the public interest;
``(2) not advertise the terms of the offering, except for
notices which direct investors to the funding portal or broker;
``(3) 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;
``(4) <>  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
``(5) comply with such other requirements as the Commission
may, by rule, prescribe, for the protection of investors and in
the public interest.

``(c) Liability for Material Misstatements and Omissions.--
``(1) Actions authorized.--
``(A) In general.--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.

[[Page 319]]

``(B) Liability.--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).
``(2) Applicability.--An issuer shall be liable in an action
under paragraph (1), if the issuer--
``(A) 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
``(B) 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.
``(3) Definition.--As used in this subsection, the term
`issuer' 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.

``(d) Information Available to States.--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.
``(e) Restrictions on Sales.--Securities issued pursuant to a
transaction described in section 4(6)--
``(1) <>  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--
``(A) to the issuer of the securities;
``(B) to an accredited investor;
``(C) as part of an offering registered with the
Commission; or
``(D) 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
``(2) shall be subject to such other limitations as the
Commission shall, by rule, establish.

``(f) Applicability.--Section 4(6) shall not apply to transactions
involving the offer or sale of securities by any issuer that--
``(1) is not organized under and subject to the laws of a
State or territory of the United States or the District of
Columbia;

[[Page 320]]

``(2) is subject to the requirement to file reports pursuant
to section 13 or section 15(d) of the Securities Exchange Act of
1934;
``(3) 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
``(4) the Commission, by rule or regulation, determines
appropriate.

``(g) Rule of Construction.--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).
``(h) Certain Calculations.--
``(1) <>  Dollar amounts.--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.
``(2) Income and net worth.--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.''.

(c) <>  Rulemaking.--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
``Commission'') 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.

(d) <>  Disqualification.--
(1) <>  In general.--Not later than 270
days after the date of enactment of this Act, the Commission
shall, by rule, establish disqualification provisions under
which--
(A) 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
(B) a broker or funding portal shall not be eligible
to effect or participate in transactions pursuant to
that section 4(6).
(2) Inclusions.--Disqualification provisions required by
this subsection shall--
(A) be substantially similar to the provisions of
section 230.262 of title 17, Code of Federal Regulations
(or any successor thereto); and
(B) disqualify any offering or sale of securities by
a person that--
(i) 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

[[Page 321]]

or officer of a State performing like functions),
an appropriate Federal banking agency, or the
National Credit Union Administration, that--
(I) bars the person from--
(aa) association with an
entity regulated by such
commission, authority, agency,
or officer;
(bb) engaging in the
business of securities,
insurance, or banking; or
(cc) engaging in savings
association or credit union
activities; or
(II) 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
(ii) 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.
SEC. 303. EXCLUSION OF CROWDFUNDING INVESTORS FROM SHAREHOLDER
CAP.

(a) Exemption.--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:
``(6) Exclusion for persons holding certain securities.--
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.''.

(b) Rulemaking.--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.
SEC. 304. FUNDING PORTAL REGULATION.

(a) Exemption.--
(1) In general.--Section 3 of the Securities Exchange Act of
1934 (15 U.S.C. 78c) is amended by adding at the end the
following:

``(h) Limited Exemption for Funding Portals.--
``(1) In general.--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--
``(A) remains subject to the examination,
enforcement, and other rulemaking authority of the
Commission;
``(B) is a member of a national securities
association registered under section 15A; and
``(C) is subject to such other requirements under
this title as the Commission determines appropriate
under such rule.
``(2) <>  National securities association
membership.--For purposes of sections 15(b)(8) and 15A, the term
`broker or dealer' includes a funding portal and the term
`registered broker or dealer' includes a registered funding
portal, except to the extent that the Commission, by rule,
determines otherwise,

[[Page 322]]

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.''.
(2) <>  Rulemaking.--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.

(b) Definition.--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:
``(80) Funding portal.--The term `funding portal' 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--
``(A) offer investment advice or recommendations;
``(B) solicit purchases, sales, or offers to buy the
securities offered or displayed on its website or
portal;
``(C) compensate employees, agents, or other persons
for such solicitation or based on the sale of securities
displayed or referenced on its website or portal;
``(D) hold, manage, possess, or otherwise handle
investor funds or securities; or
``(E) engage in such other activities as the
Commission, by rule, determines appropriate.''.
SEC. 305. RELATIONSHIP WITH STATE LAW.

(a) In General.--Section 18(b)(4) of the Securities Act of 1933 (15
U.S.C. 77r(b)(4)) is amended--
(1) by redesignating subparagraphs (C) and (D) as
subparagraphs (D) and (E), respectively; and
(2) by inserting after subparagraph (B) the following:
``(C) section 4(6);''.

(b) Clarification of the Preservation of State Enforcement
Authority.--
(1) <>  In general.--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.
(2) Clarification of state jurisdiction over unlawful
conduct of funding portals and issuers.--Section 18(c)(1) of the
Securities Act of 1933 (15 U.S.C. 77r(c)(1)) is amended by
striking ``with respect to fraud or deceit, or unlawful conduct
by a broker or dealer, in connection with securities or
securities transactions.'' and inserting the following: ``, in
connection with securities or securities transactions
``(A) with respect to--
``(i) fraud or deceit; or
``(ii) unlawful conduct by a broker or dealer;
and
``(B) in connection to a transaction described under
section 4(6), with respect to--
``(i) fraud or deceit; or

[[Page 323]]

``(ii) unlawful conduct by a broker, dealer,
funding portal, or issuer.''.

(c) Notice Filings Permitted.--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:
``(F) Fees not permitted on crowdfunded
securities.--Notwithstanding <> subpar
agraphs (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 `State' includes the District of
Columbia and the territories of the United States.''.

(d) Funding Portals.--
(1) State exemptions and oversight.--Section 15(i) of the
Securities Exchange Act of 1934 (15 U.S.C. 78o(i)) is amended--
(A) by redesignating paragraphs (2) and (3) as
paragraphs (3) and (4), respectively; and
(B) by inserting after paragraph (1) the following:
``(2) Funding portals.--
``(A) Limitation on state laws.--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.
``(B) Examination and enforcement authority.--
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.
``(C) Definition.--For purposes of this paragraph,
the term `State' includes the District of Columbia and
the territories of the United States.''.
(2) State fraud authority.--Section 18(c)(1) of the
Securities Act of 1933 (15 U.S.C. 77r(c)(1)) is amended by
striking ``or dealer'' and inserting ``, dealer, or funding
portal''.

TITLE IV--SMALL COMPANY CAPITAL FORMATION

SEC. 401. AUTHORITY TO EXEMPT CERTAIN SECURITIES.

(a) In General.--Section 3(b) of the Securities Act of 1933 (15
U.S.C. 77c(b)) is amended--
(1) by striking ``(b) The Commission'' and inserting the
following:

``(b) Additional Exemptions.--

[[Page 324]]

``(1) Small issues exemptive authority.--The Commission'';
and
(2) by adding at the end the following:
``(2) <>  Additional issues.--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:
``(A) <>  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.
``(B) The securities may be offered and sold
publicly.
``(C) The securities shall not be restricted
securities within the meaning of the Federal securities
laws and the regulations promulgated thereunder.
``(D) <>  The civil liability
provision in section 12(a)(2) shall apply to any person
offering or selling such securities.
``(E) 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.
``(F) <>  The Commission shall
require the issuer to file audited financial statements
with the Commission annually.
``(G) 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--
``(i) 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
``(ii) 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).
``(3) Limitation.--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.
``(4) Periodic disclosures.--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

[[Page 325]]

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.
``(5) <>  Adjustment.--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.''.

(b) Treatment as Covered Securities for Purposes of NSMIA.--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:
``(D) a rule or regulation adopted pursuant to
section 3(b)(2) and such security is--
``(i) offered or sold on a national securities
exchange; or
``(ii) offered or sold to a qualified
purchaser, as defined by the Commission pursuant
to paragraph (3) with respect to that purchase or
sale;''.

(c) Conforming Amendment.--Section 4(5) of the Securities Act of
1933 <> is amended by striking ``section 3(b)'' and
inserting ``section 3(b)(1)''.
SEC. 402. STUDY ON THE IMPACT OF STATE BLUE SKY LAWS ON REGULATION
A OFFERINGS.

The Comptroller General shall conduct a study on the impact of State
laws regulating securities offerings, or ``Blue Sky laws'', 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.

TITLE V--PRIVATE COMPANY FLEXIBILITY AND GROWTH

SEC. 501. THRESHOLD FOR REGISTRATION.

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:
``(A) <>  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--
``(i) 2,000 persons, or
``(ii) 500 persons who are not accredited investors (as such
term is defined by the Commission), and''.

[[Page 326]]

SEC. 502. EMPLOYEES.

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: ``For purposes of determining whether
an issuer is required to register a security with the Commission
pursuant to paragraph (1), the definition of `held of record' shall not
include securities held by persons who received the securities pursuant
to an employee compensation plan in transactions exempted from the
registration requirements of section 5 of the Securities Act of 1933.''.
SEC. 503. <> COMMISSION RULEMAKING.

The Securities and Exchange Commission shall revise the definition
of ``held of record'' pursuant to section 12(g)(5) of the Securities
Exchange Act of 1934 (15 U.S.C. 78l(g)(5)) to implement the amendment
made by section 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.
SEC. 504. COMMISSION STUDY OF ENFORCEMENT AUTHORITY UNDER RULE
12G5-1.

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.

TITLE VI--CAPITAL EXPANSION

SEC. 601. SHAREHOLDER THRESHOLD FOR REGISTRATION.

(a) Amendments to Section 12 of the Securities Exchange Act of
1934.--Section 12(g) of the Securities Exchange Act of 1934 (15 U.S.C.
78l(g)) is further amended--
(1) in paragraph (1), by amending subparagraph (B) to read
as follows:
``(B) <>  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,''; and
(2) in paragraph (4), by striking ``three hundred'' and
inserting ``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''.

(b) Amendments to Section 15 of the Securities Exchange Act of
1934.--Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C.
78o(d)) is amended, in the third sentence, by striking ``three hundred''
and inserting ``300 persons, or, in the case of bank or a bank holding
company, as such term is defined

[[Page 327]]

in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 1841),
1,200 persons''.
SEC. 602. <> RULEMAKING.

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.

TITLE VII--OUTREACH ON CHANGES TO THE LAW

SEC. 701. <> OUTREACH BY THE
COMMISSION.

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.

Approved April 5, 2012.

LEGISLATIVE HISTORY--H.R. 3606:
---------------------------------------------------------------------------

HOUSE REPORTS: No. 112-406 and Pt. 2 (Comm. on Financial Services).
CONGRESSIONAL RECORD, Vol. 158 (2012):
Mar. 7, 8, considered and passed House.
Mar. 15, 19-22, considered and passed Senate, amended.
Mar. 27, House concurred in Senate amendment.
DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2012):
Apr. 5, Presidential remarks.