S 1544 ISCommentsClose CommentsPermalink

112th CONGRESSCommentsClose CommentsPermalink

1st SessionCommentsClose CommentsPermalink

S. 1544CommentsClose CommentsPermalink

To amend the Securities Act of 1933 to require the Securities and Exchange Commission to exempt a certain class of securities from such Act.CommentsClose CommentsPermalink

IN THE SENATE OF THE UNITED STATESCommentsClose CommentsPermalink

September 12, 2011CommentsClose CommentsPermalink

Mr. TESTER (for himself and Mr. TOOMEY) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban AffairsCommentsClose CommentsPermalink

A BILLCommentsClose CommentsPermalink

To amend the Securities Act of 1933 to require the Securities and Exchange Commission to exempt a certain class of securities from such Act.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Small Company Capital Formation Act of 2011’.CommentsClose CommentsPermalink

SEC. 2. 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--CommentsClose CommentsPermalink





(1) by striking ‘(b) The Commission’ and inserting the following:CommentsClose CommentsPermalink





‘(b) Additional Exemptions-CommentsClose CommentsPermalink





‘(1) SMALL ISSUES EXEMPTIVE AUTHORITY- The Commission’; andCommentsClose CommentsPermalink





(2) by adding at the end the following:CommentsClose CommentsPermalink





‘(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:CommentsClose CommentsPermalink





‘(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.CommentsClose CommentsPermalink





‘(B) The securities may be offered and sold publicly.CommentsClose CommentsPermalink





‘(C) The securities shall not be restricted securities within the meaning of the Federal securities laws and the regulations promulgated thereunder.CommentsClose CommentsPermalink





‘(D) The civil liability provision in section 12(a)(2) shall apply to any person offering or selling such securities.CommentsClose CommentsPermalink





‘(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.CommentsClose CommentsPermalink





‘(F) The Commission shall require the issuer to file audited financial statements with the Commission annually.CommentsClose CommentsPermalink





‘(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--CommentsClose CommentsPermalink





‘(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 and a description of the issuer’s business operations, its financial condition, its corporate governance principles, its use of investor funds, and other appropriate matters; andCommentsClose CommentsPermalink





‘(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).CommentsClose CommentsPermalink





‘(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.CommentsClose CommentsPermalink





‘(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 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.CommentsClose CommentsPermalink





‘(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.’.CommentsClose CommentsPermalink





(b) Treatment as Covered Securities for Purposes of NSMIA- Section 18(b)(4) of the Securities Act of 1933 (15 U.S.C. 77r(b)(4)) is amended--CommentsClose CommentsPermalink





(1) in subparagraph (C), by striking ‘; or’ at the end and inserting a semicolon; andCommentsClose CommentsPermalink





(2) by redesignating subparagraph (D) as subparagraph (E), and inserting after subparagraph (C) the following:CommentsClose CommentsPermalink





‘(D) a rule or regulation adopted pursuant to section 3(b)(2) and such security is--CommentsClose CommentsPermalink





‘(i) offered or sold on a national securities exchange; orCommentsClose CommentsPermalink





‘(ii) offered or sold to a qualified purchaser as defined by the Commission pursuant to paragraph (3) with respect to that purchase or sale.’.CommentsClose CommentsPermalink





(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)’.CommentsClose CommentsPermalink

SEC. 3. STUDY ON THE IMPACT OF STATE BLUE SKY LAWS ON REGULATION A OFFERINGS.

Not later than 3 months after the date of enactment of this Act, the Comptroller General shall--CommentsClose CommentsPermalink





(1) conduct a study on the impact of State laws regulating securities offerings (commonly referred to as ‘Blue Sky laws’) on offerings made under Regulation A (17 C.F.R. 230.251 et seq.); andCommentsClose CommentsPermalink





(2) 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.CommentsClose CommentsPermalink