S. 1824 – Reading Mode

112th CONGRESS

1st Session

S. 1824

IN THE SENATE OF THE UNITED STATES

November 8, 2011

Mr. Toomey (for himself, Mr. Carper, Mr. Warner, and Mr. Johanns) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

A BILL

To amend the securities laws to establish certain thresholds for shareholder registration under that Act, and for other purposes.

Short title

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

Threshold for registration

Section 12(g)(1) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(g)(1)) is amended by striking shall— and all that follows through register such and inserting shall, not later than 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 2,000 persons, register such.

Treatment of employee securities

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

Commission rulemaking

The Securities and Exchange Commission shall, not later than one year after the date of enactment of this Act—

(1)

revise the definition of the term 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 amendments made by section 3; and

(2)

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.

Shareholder registration threshold

(a)

Amendment to section 12 of the Securities Exchange Act of 1934

Section 12(g)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78l(g)(4)) is amended by striking three hundred and inserting 300 persons, or, in the case of a bank, as such term is defined in section 3(a)(6), 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), 1200.

(b)

Amendment 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 a bank, as such term is defined in section 3(a)(6), 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), 1200.

Bank exemption from municipal advisor registration

Section 15B(e)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78o–4(e)(4)) is amended—

(1)

in subparagraph (A), by striking (who is not a municipal entity, or an employee of a municipal entity) and inserting (who is not a municipal entity, or an employee of a municipal entity, or a person appointed to or volunteering on a board, commission, committee, or similar function of a municipal entity); and

(2)

in subparagraph (C), by inserting after include the following: a bank (as defined in section (3)(a)(6)) or an agency or branch of a foreign bank (as defined in paragraphs (1) and (3), respectively, of section 1(b) of the International Banking Act of 1978) (12 U.S.C. 3101),.