IB 

Union Calendar No. 223 

112TH CONGRESS 

1ST SESSION H. R. 2167 

[Report No. 112–327] 

To amend the Securities Exchange Act of 1934 to change the threshold 

number of shareholders for required registration under that Act. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 14, 2011 

Mr. SCHWEIKERT (for himself, Mr. HIMES, Mr. CANSECO, Mr. QUIGLEY, Mr. 

JONES, Mr. PERLMUTTER, Mrs. BIGGERT, and Mr. ISSA) introduced the 

following bill; which was referred to the Committee on Financial Services 

DECEMBER 12, 2011 

Additional sponsors: Mr. CAMPBELL, Mr. MCHENRY, Mr. MANZULLO, Mr. 

LATTA, Mr. POLIS, Mr. MEEKS, Mr. HURT, Ms. LORETTA SANCHEZ of 

California, Mr. WELCH, Mr. BOREN, Mr. FITZPATRICK, Ms. HAYWORTH, 

Mr. ACKERMAN, Mr. DOLD, Mrs. MALONEY, Mr. HINOJOSA, Mr. SMITH

of Washington, Mr. CARNEY, Mr. CONNOLLY of Virginia, and Mr. KLINE

DECEMBER 12, 2011 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 


rfrederick on DSK6VPTVN1PROD with BILLS
2 

•HR 2167 RH

A BILL 

To amend the Securities Exchange Act of 1934 to change 

the threshold number of shareholders for required registration under that Act. 


rfrederick on DSK6VPTVN1PROD with BILLS
3 

•HR 2167 RH

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)(B) of the Securities Exchange Act 

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

9 ‘‘shall—’’ and all that follows through ‘‘register’’ and in10 sert ‘‘shall, within 120 days after the last day of its first 

11 fiscal year ended on which the issuer has total assets ex12 ceeding $10,000,000 and a class of equity security (other 

13 than an exempted security) held of record by 1,000 per14 sons, register’’. 

15 SEC. 3. ACCREDITED INVESTORS AND EMPLOYEES. 

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

17 1934 (15 U.S.C. 78l(g)(5)) is amended by adding at the 

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

19 an issuer is required to register a security with the Com20 mission pursuant to paragraph (1), the definition of ‘held 

21 of record’ shall not include securities held by persons who 

22 qualify as accredited investors (as that term is defined by 

23 the Commission) or securities that are held by persons 

24 who received the securities pursuant to an employee com25 pensation plan in transactions exempted from the registraVerDate Mar 15 2010 00:37 Dec 13, 2011 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6401 E:\BILLS\H2167.RH H2167

rfrederick on DSK6VPTVN1PROD with BILLS
4 

•HR 2167 RH

1 tion requirements of section 5 of the Securities Act of 

2 1933.’’. 

3 SEC. 4. COMMISSION RULEMAKING. 

4 The Securities and Exchange Commission shall revise 

5 the definition of ‘‘held of record’’ pursuant to section 

6 12(g)(5) of the Securities Exchange Act of 1934 (15 

7 U.S.C. 78l(g)(5)) to implement the amendment made by 

8 section 2. The Commission shall also adopt safe harbor 

9 provisions that issuers can follow when determining 

10 whether holders of their securities are accredited investors 

11 or that holders of their securities received the securities 

12 pursuant to an employee compensation plan in trans13 actions that were exempt from the registration require14 ments of section 5 of the Securities Act of 1933. 

15 SECTION 1. SHORT TITLE. 

16 This Act may be cited as the ‘‘Private Company Flexi17 bility and Growth Act’’. 

18 SEC. 2. THRESHOLD FOR REGISTRATION. 

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

20 1934 (15 U.S.C. 78l(g)(1)) is amended by striking ‘‘shall— 

21 ’’ and all that follows through the first instance of ‘‘register’’ 

22 and insert ‘‘shall, within 120 days after the last day of its 

23 first fiscal year ended on which the issuer has total assets 

24 exceeding $10,000,000 and a class of equity security (other 


rfrederick on DSK6VPTVN1PROD with BILLS
5 

•HR 2167 RH

1 than an exempted security) held of record by 1,000 persons, 

2 register’’. 

3 SEC. 3. EMPLOYEES. 

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

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

6 end the following: ‘‘For purposes of determining whether an 

7 issuer is required to register a security with the Commission 

8 pursuant to paragraph (1), the definition of ‘held of record’ 

9 shall not include securities held by persons who received the 

10 securities pursuant to an employee compensation plan in 

11 transactions exempted from the registration requirements of 

12 section 5 of the Securities Act of 1933.’’. 

13 SEC. 4. COMMISSION RULEMAKING. 

14 The Securities and Exchange Commission shall revise 

15 the definition of ‘‘held of record’’ pursuant to section 

16 12(g)(5) of the Securities Exchange Act of 1934 (15 U.S.C. 

17 78l(g)(5)) to implement the amendment made by section 2. 

18 The Commission shall also adopt safe harbor provisions 

19 that issuers can follow when determining that holders of 

20 their securities received the securities pursuant to an em21 ployee compensation plan in transactions that were exempt 

22 from the registration requirements of section 5 of the Secu23 rities Act of 1933. 


rfrederick on DSK6VPTVN1PROD with BILLS
Union Calendar No. 223 

112TH CONGRESS 

1ST SESSION H. R. 2167 

[Report No. 112–327] 

A BILL 

To amend the Securities Exchange Act of 1934 to 

required registration under that Act. change the threshold number of shareholders for 

DECEMBER 12, 2011 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


rfrederick on DSK6VPTVN1PROD with BILLS