I 

112TH CONGRESS 

1ST SESSION H. R. 1070 

To amend the Securities Act of 1933 to authorize the Securities and Exchange Commission to exempt a certain class of securities from such 

Act. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 14, 2011 

Mr. SCHWEIKERT (for himself, Mr. GARRETT, Mr. WESTMORELAND, Mr. 

JONES, and Mrs. BIGGERT) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To amend the Securities Act of 1933 to authorize the Securities and Exchange Commission to exempt a certain class 

of securities from such Act. 

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 ‘‘Small Company Cap5 ital Formation Act of 2011’’. 

6 SEC. 2. AUTHORITY TO EXEMPT CERTAIN SECURITIES. 

7 Section 3(b) of the Securities Act of 1933 (15 U.S.C. 

8 77c(b)) is amended— 


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1 (1) by striking ‘‘(b) The Commission’’ and in2 serting the following: 

3 ‘‘(b) ADDITIONAL EXEMPTIONS.— 

4 ‘‘(1) IN GENERAL.—The Commission’’; 

5 (2) by inserting ‘‘, except as provided in para6 graph (2)’’ after ‘‘but’’; and 

7 (3) by adding at the end the following: 

8 ‘‘(2) EXCEPTION.—The Commission shall by 

9 rule or regulation exempt a class of securities pursu10 ant to paragraph (1) for which the aggregate offer11 ing amount exceeds $5,000,000 in accordance with 

12 the following terms and conditions: 

13 ‘‘(A) The aggregate offering amount shall 

14 not exceed $50,000,000. 

15 ‘‘(B) The securities may be offered and 

16 sold publicly. 

17 ‘‘(C) The securities shall not be restricted 

18 securities within the meaning of the Federal se19 curities laws and the regulations promulgated 

20 thereunder. 

21 ‘‘(D) The issuer may solicit interest in the 

22 offering prior to filing any offering statement, 

23 on such terms and conditions as the Commis24 sion may prescribe. 


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1 ‘‘(E) Such other terms, conditions, or re2 quirements as the Commission may determine 

3 necessary in the public interest and for the pro4 tection of investors, including, but not limited 

5 to— 

6 ‘‘(i) requiring the issuer to file au7 dited financial statements with the Com8 mission and distribute such statements to 

9 prospective investors; 

10 ‘‘(ii) requiring the issuer to submit its 

11 offering statement and related filings to 

12 the Commission electronically; and 

13 ‘‘(iii) establishing disqualification pro14 visions under which the exemption shall 

15 not be available based upon the discipli16 nary history of the issuer or its prede17 cessors, affiliates, officers, directors, un18 derwriters, or other related persons. 

19 ‘‘(3) PERIODIC DISCLOSURES.—Upon such 

20 terms and conditions as the Commission determines 

21 necessary in the public interest and for the protec22 tion of investors, the Commission by rule or regula23 tion may require an issuer of a class of securities ex24 empted under paragraph (2) to make available to in25 vestors periodic disclosures regarding the issuer, its 


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1 business operations, its financial condition, its use of 

2 investor funds, and other appropriate matters, and 

3 also may provide for the suspension and termination 

4 of such a requirement with respect to that issuer. 

5 ‘‘(4) ADJUSTMENT.—Not later than 2 years 

6 after the date of enactment of the Small Company 

7 Capital Formation Act of 2011 and every 2 years 

8 thereafter, the Commission shall review the offering 

9 amount limitation described in paragraph (2)(A) and 

10 shall increase such amount as the Commission deter11 mines appropriate. If the Commission determines 

12 not to increase such amount, it shall report to the 

13 Committee on Financial Services of the House of 

14 Representatives and the Committee on Banking of 

15 the Senate on its reasons for not increasing the 

16 amount.’’. 

Æ 


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