II 

112TH CONGRESS 

1ST SESSION S. 1824 

To amend the securities laws to establish certain thresholds for shareholder 

registration under that Act, and for other purposes. 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Private Company 

5 Flexibility and Growth Act’’. 

6 SEC. 2. THRESHOLD FOR REGISTRATION. 

7 Section 12(g)(1) of the Securities Exchange Act of 

8 1934 (15 U.S.C. 78l(g)(1)) is amended by striking 

9 ‘‘shall—’’ and all that follows through ‘‘register such’’ and 


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1 inserting ‘‘shall, not later than 120 days after the last day 

2 of its first fiscal year ended, on which the issuer has total 

3 assets exceeding $10,000,000 and a class of equity secu4 rity (other than an exempted security) held of record by 

5 2,000 persons, register such’’. 

6 SEC. 3. TREATMENT OF EMPLOYEE SECURITIES. 

7 Section 12(g)(5) of the Securities Exchange Act of 

8 1934 (15 U.S.C. 78l(g)(5)) is amended by adding at the 

9 end the following: ‘‘For purposes of determining whether 

10 an issuer is required to register a security with the Com11 mission pursuant to paragraph (1), the definition of the 

12 term ‘held of record’ shall not include securities that are 

13 held by persons who received the securities pursuant to 

14 an employee compensation plan in transactions exempted 

15 from the registration requirements of section 5 of the Se16 curities Act of 1933.’’. 

17 SEC. 4. COMMISSION RULEMAKING. 

18 The Securities and Exchange Commission shall, not 

19 later than one year after the date of enactment of this 

20 Act— 

21 (1) revise the definition of the term ‘‘held of 

22 record’’ pursuant to section 12(g)(5) of the Securi23 ties Exchange Act of 1934 (15 U.S.C. 78l(g)(5)) to 

24 implement the amendments made by section 3; and 


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1 (2) adopt safe harbor provisions that issuers 

2 can follow when determining whether holders of 

3 their securities received the securities pursuant to an 

4 employee compensation plan in transactions that 

5 were exempt from the registration requirements of 

6 section 5 of the Securities Act of 1933. 

7 SEC. 5. SHAREHOLDER REGISTRATION THRESHOLD. 

8 (a) AMENDMENT TO SECTION 12 OF THE SECURI9 TIES EXCHANGE ACT OF 1934.—Section 12(g)(4) of the 

10 Securities Exchange Act of 1934 (15 U.S.C. 78l(g)(4)) is 

11 amended by striking ‘‘three hundred’’ and inserting ‘‘300 

12 persons, or, in the case of a bank, as such term is defined 

13 in section 3(a)(6), or a bank holding company, as such 

14 term is defined in section 2 of the Bank Holding Company 

15 Act of 1956 (12 U.S.C. 1841), 1200’’. 

16 (b) AMENDMENT TO SECTION 15 OF THE SECURI17 TIES EXCHANGE ACT OF 1934.—Section 15(d) of the Se18 curities Exchange Act of 1934 (15 U.S.C. 78o(d)) is 

19 amended, in the third sentence, by striking ‘‘three hun20 dred’’ and inserting ‘‘300 persons, or, in the case of a 

21 bank, as such term is defined in section 3(a)(6), or a bank 

22 holding company, as such term is defined in section 2 of 

23 the Bank Holding Company Act of 1956 (12 U.S.C. 

24 1841), 1200’’. 


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1 SEC. 6. BANK EXEMPTION FROM MUNICIPAL ADVISOR REG2 ISTRATION. 

3 Section 15B(e)(4) of the Securities Exchange Act of 

4 1934 (15 U.S.C. 78o–4(e)(4)) is amended— 

5 (1) in subparagraph (A), by striking ‘‘(who is 

6 not a municipal entity, or an employee of a munic7 ipal entity)’’ and inserting ‘‘(who is not a municipal 

8 entity, or an employee of a municipal entity, or a 

9 person appointed to or volunteering on a board, 

10 commission, committee, or similar function of a mu11 nicipal entity)’’; and 

12 (2) in subparagraph (C), by inserting after ‘‘in13 clude’’ the following: ‘‘a bank (as defined in section 

14 (3)(a)(6)) or an agency or branch of a foreign bank 

15 (as defined in paragraphs (1) and (3), respectively, 

16 of section 1(b) of the International Banking Act of 

17 1978) (12 U.S.C. 3101),’’. 

Æ 


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