Amendment sought to provide exclusions for when an M&A broker is not exempt from registration with the SEC.

1. 1

   Change 1: Inserts new text on page 9, line 16

   InsertsPrinted page

   Inserted: (C) Disqualification for certain conduct.--An M&A broker may not make use of the exemption under this paragraph if the broker--

   Inserted: (i) has been barred from association with a broker or dealer by the Commission, any State, or any self-regulatory organization; or

   Inserted: (ii) is suspended from association with a broker or dealer.

   Inserted: (D) Transactions involving shell companies prohibited.--

   Inserted: (i) In general.--An M&A broker making use of the exemption under this paragraph may not engage in a transaction involving a shell company, other than a business combination related shell company.

   Inserted: (ii) Shell company defined.--In this subparagraph, the term 'shell company' means a company that--

   Inserted: (I) has no or nominal operations; and

   Inserted: (II) has--

   Inserted: (aa) no or nominal assets;

   Inserted: (bb) assets consisting solely of cash and cash equivalents; or

   Inserted: (cc) assets consisting of any amount of cash and cash equivalents and nominal other assets.

   Inserted: (iii) Business combination related shell company defined.--In this subparagraph, the term 'business combination related shell company' means a shell company that is formed by an entity that is not a shell company solely for the purpose of--

   Show 7 more inserted paragraphsShow less

   Inserted: (I) changing the corporate domicile of such entity solely within the United States; or

   Inserted: (II) completing a business combination transaction (as defined in section 230.165(f) of title 17, Code of Federal Regulations) among one or more entities other than the shell company, none of which is a shell company.

   Inserted: (E) Financing by m&a brokers prohibited.--An M&A broker may not provide financing, either directly or indirectly, related to the transfer of ownership of an eligible privately held company.

   Inserted: (F) Disclosure and consent.--To the extent an M&A broker represents both buyers and sellers of an eligible privately held company, the broker shall provide clear written disclosure as to the parties the broker represents and obtain written consent from all parties to the joint representation.

   Inserted: (G) Passive buyers prohibited.--An M&A broker may not engage in a transaction involving the transfer of ownership of an eligible privately held company to a passive buyer or group of passive buyers.

   Inserted: (H) No authority to bind party to transfer.--The M&A broker may not bind a party to a transfer of ownership of an eligible privately held company.

   Inserted: (I) Restricted securities.--Any securities purchased or received by the buyer or M&A broker in connection with the transfer of ownership of an eligible privately held company are restricted securities (as defined in section 230.144(a)(3) of title 17, Code of Federal Regulations).

   Original wording

   Page 9, after line 16, insert the following:

2. 2

   Change 2: Inserts “, and” after “officer”

   InsertsPage 10, line 8Printed page

   …officer[inserted: , and]…

   Original wording

   Page 10, line 8, insert “, and” after “officer”.

3. 3

   Change 3: Replaces “20 percent” with “25 percent”

   ReplacesPage 10, line 11Printed page

   [struck: 20 percent][inserted: 25 percent]

   Original wording

   Page 10, beginning on line 11, strike “20 percent” and insert “25 percent”.

4. 4

   Change 4: Replaces “20 percent” with “25 percent”

   ReplacesPage 10, line 14Printed page

   [struck: 20 percent][inserted: 25 percent]

   Original wording

   Page 10, line 14, strike “20 percent” and insert “25 percent”.

5. 5

   Change 5: Replaces “20 percent” with “25 percent”

   ReplacesPage 10, line 19Printed page

   [struck: 20 percent][inserted: 25 percent]

   Original wording

   Page 10, line 19, strike “20 percent” and insert “25 percent”.

6. 6

   Change 6: Replaces “will be active in the management of” with “will actively operate”

   ReplacesPage 12, line 19Printed page

   [struck: will be active in the management of][inserted: will actively operate]

   Original wording

   Page 12, beginning on line 19, strike “will be active in the management of” and insert “will actively operate”.

Read automatically from the Congressional Record. Check the original before relying on it.

As printed