113TH CONGRESS 

2D SESSION H. R. 5405 

AN ACT 

To make technical corrections to the Dodd-Frank Wall Street 

Reform and Consumer Protection Act, to enhance the 

ability of small and emerging growth companies to access 

capital through public and private markets, to reduce 

regulatory burdens, 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, 
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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Promoting Job Cre3 ation and Reducing Small Business Burdens Act’’. 

4 SEC. 2. TABLE OF CONTENTS. 

5 The table of contents for this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Table of contents. 

TITLE I—BUSINESS RISK MITIGATION AND PRICE STABILIZATION 

ACT 

Sec. 101. Margin requirements. 

Sec. 102. Implementation. 

TITLE II—TREATMENT OF AFFILIATE TRANSACTIONS 

Sec. 201. Treatment of affiliate transactions. 

TITLE III—HOLDING COMPANY REGISTRATION THRESHOLD 

EQUALIZATION ACT 

Sec. 301. Registration threshold for savings and loan holding companies. 

TITLE IV—SMALL BUSINESS MERGERS, ACQUISITIONS, SALES, 

AND BROKERAGE SIMPLIFICATION ACT 

Sec. 401. Registration exemption for merger and acquisition brokers. 

Sec. 402. Effective date. 

TITLE V—SMALL CAP LIQUIDITY REFORM ACT 

Sec. 501. Liquidity pilot program for securities of certain emerging growth 

companies. 

TITLE VI—IMPROVING ACCESS TO CAPITAL FOR EMERGING 

GROWTH COMPANIES ACT 

Sec. 601. Filing requirement for public filing prior to public offering. 

Sec. 602. Grace period for change of status of emerging growth companies. 

Sec. 603. Simplified disclosure requirements for emerging growth companies. 

TITLE VII—SMALL COMPANY DISCLOSURE SIMPLIFICATION ACT 

Sec. 701. Exemption from XBRL requirements for emerging growth companies 

and other smaller companies. 

Sec. 702. Analysis by the SEC. 

Sec. 703. Report to Congress. 

Sec. 704. Definitions. 

TITLE VIII—RESTORING PROVEN FINANCING FOR AMERICAN 

EMPLOYERS ACT 

Sec. 801. Rules of construction relating to collateralized loan obligations. 
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TITLE IX—SBIC ADVISERS RELIEF ACT 

Sec. 901. Advisers of SBICs and venture capital funds. 

Sec. 902. Advisers of SBICs and private funds. 

Sec. 903. Relationship to State law. 

TITLE X—DISCLOSURE MODERNIZATION AND SIMPLIFICATION 

ACT 

Sec. 1001. Summary page for form 10–K. 

Sec. 1002. Improvement of regulation S–K. 

Sec. 1003. Study on modernization and simplification of regulation S–K. 

TITLE XI—ENCOURAGING EMPLOYEE OWNERSHIP ACT 

Sec. 1101. Increased threshold for disclosures relating to compensatory benefit 

plans. 

1 TITLE I—BUSINESS RISK MITI2 GATION AND PRICE STA3 BILIZATION ACT 

4 SEC. 101. MARGIN REQUIREMENTS. 

5 (a) COMMODITY EXCHANGE ACT AMENDMENT.— 

6 Section 4s(e) of the Commodity Exchange Act (7 U.S.C. 

7 6s(e)), as added by section 731 of the Dodd-Frank Wall 

8 Street Reform and Consumer Protection Act, is amended 

9 by adding at the end the following new paragraph: 

10 ‘‘(4) APPLICABILITY WITH RESPECT TO

11 COUNTERPARTIES.—The requirements of paragraphs 

12 (2)(A)(ii) and (2)(B)(ii), including the initial and 

13 variation margin requirements imposed by rules 

14 adopted pursuant to paragraphs (2)(A)(ii) and 

15 (2)(B)(ii), shall not apply to a swap in which a 

16 counterparty qualifies for an exception under section 

17 2(h)(7)(A), or an exemption issued under section 

18 4(c)(1) from the requirements of section 2(h)(1)(A) 
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1 for cooperative entities as defined in such exemption, 

2 or satisfies the criteria in section 2(h)(7)(D).’’. 

3 (b) SECURITIES EXCHANGE ACT AMENDMENT.— 

4 Section 15F(e) of the Securities Exchange Act of 1934 

5 (15 U.S.C. 78o–10(e)), as added by section 764(a) of the 

6 Dodd-Frank Wall Street Reform and Consumer Protec7 tion Act, is amended by adding at the end the following 

8 new paragraph: 

9 ‘‘(4) APPLICABILITY WITH RESPECT TO

10 COUNTERPARTIES.—The requirements of paragraphs 

11 (2)(A)(ii) and (2)(B)(ii) shall not apply to a secu12 rity-based swap in which a counterparty qualifies for 

13 an exception under section 3C(g)(1) or satisfies the 

14 criteria in section 3C(g)(4).’’. 

15 SEC. 102. IMPLEMENTATION. 

16 The amendments made by this title to the Commodity 

17 Exchange Act shall be implemented— 

18 (1) without regard to— 

19 (A) chapter 35 of title 44, United States 

20 Code; and 

21 (B) the notice and comment provisions of 

22 section 553 of title 5, United States Code; 

23 (2) through the promulgation of an interim 

24 final rule, pursuant to which public comment will be 

25 sought before a final rule is issued; and 
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1 (3) such that paragraph (1) shall apply solely 

2 to changes to rules and regulations, or proposed 

3 rules and regulations, that are limited to and di4 rectly a consequence of such amendments. 

5 TITLE II—TREATMENT OF 

6 AFFILIATE TRANSACTIONS 

7 SEC. 201. TREATMENT OF AFFILIATE TRANSACTIONS. 

8 (a) IN GENERAL.— 

9 (1) COMMODITY EXCHANGE ACT AMEND10 MENT.—Section 2(h)(7)(D)(i) of the Commodity Ex11 change Act (7 U.S.C. 2(h)(7)(D)(i)) is amended to 

12 read as follows: 

13 ‘‘(i) IN GENERAL.—An affiliate of a 

14 person that qualifies for an exception 

15 under subparagraph (A) (including affiliate 

16 entities predominantly engaged in pro17 viding financing for the purchase of the 

18 merchandise or manufactured goods of the 

19 person) may qualify for the exception only 

20 if the affiliate enters into the swap to 

21 hedge or mitigate the commercial risk of 

22 the person or other affiliate of the person 

23 that is not a financial entity, provided that 

24 if the transfer of commercial risk is ad25 dressed by entering into a swap with a 
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1 swap dealer or major swap participant, an 

2 appropriate credit support measure or 

3 other mechanism is utilized.’’. 

4 (2) SECURITIES EXCHANGE ACT OF 1934

5 AMENDMENT.—Section 3C(g)(4)(A) of the Securities 

6 Exchange Act of 1934 (15 U.S.C. 78c–3(g)(4)(A)) 

7 is amended to read as follows: 

8 ‘‘(A) IN GENERAL.—An affiliate of a per9 son that qualifies for an exception under para10 graph (1) (including affiliate entities predomi11 nantly engaged in providing financing for the 

12 purchase of the merchandise or manufactured 

13 goods of the person) may qualify for the excep14 tion only if the affiliate enters into the security15 based swap to hedge or mitigate the commercial 

16 risk of the person or other affiliate of the per17 son that is not a financial entity, provided that 

18 if the transfer of commercial risk is addressed 

19 by entering into a security-based swap with a 

20 security-based swap dealer or major security21 based swap participant, an appropriate credit 

22 support measure or other mechanism is uti23 lized.’’. 

24 (b) APPLICABILITY OF CREDIT SUPPORT MEASURE

25 REQUIREMENT.—Notwithstanding section 371 of this Act, 
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1 the requirements in section 2(h)(7)(D)(i) of the Com2 modity Exchange Act and section 3C(g)(4)(A) of the Se3 curities Exchange Act of 1934, as amended by subsection 

4 (a), requiring that a credit support measure or other 

5 mechanism be utilized if the transfer of commercial risk 

6 referred to in such sections is addressed by entering into 

7 a swap with a swap dealer or major swap participant or 

8 a security-based swap with a security-based swap dealer 

9 or major security-based swap participant, as appropriate, 

10 shall not apply with respect to swaps or security-based 

11 swaps, as appropriate, entered into before the date of the 

12 enactment of this Act. 

13 TITLE III—HOLDING COMPANY 

14 REGISTRATION THRESHOLD 

15 EQUALIZATION ACT 

16 SEC. 301. REGISTRATION THRESHOLD FOR SAVINGS AND 

17 LOAN HOLDING COMPANIES. 

18 The Securities Exchange Act of 1934 (15 U.S.C. 78a 

19 et seq.) is amended— 

20 (1) in section 12(g)— 

21 (A) in paragraph (1)(B), by inserting after 

22 ‘‘is a bank’’ the following: ‘‘, a savings and loan 

23 holding company (as defined in section 10 of 

24 the Home Owners’ Loan Act),’’; and 
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1 (B) in paragraph (4), by inserting after 

2 ‘‘case of a bank’’ the following: ‘‘, a savings and 

3 loan holding company (as defined in section 10 

4 of the Home Owners’ Loan Act),’’; and 

5 (2) in section 15(d), by striking ‘‘case of bank’’ 

6 and inserting the following: ‘‘case of a bank, a sav7 ings and loan holding company (as defined in section 

8 10 of the Home Owners’ Loan Act),’’. 

9 TITLE IV—SMALL BUSINESS 

10 MERGERS, ACQUISITIONS, 

11 SALES, AND BROKERAGE SIM12 PLIFICATION ACT 

13 SEC. 401. REGISTRATION EXEMPTION FOR MERGER AND 

14 ACQUISITION BROKERS. 

15 Section 15(b) of the Securities Exchange Act of 1934 

16 (15 U.S.C. 78o(b)) is amended by adding at the end the 

17 following: 

18 ‘‘(13) REGISTRATION EXEMPTION FOR MERGER

19 AND ACQUISITION BROKERS.— 

20 ‘‘(A) IN GENERAL.—Except as provided in 

21 subparagraph (B), an M&A broker shall be ex22 empt from registration under this section. 

23 ‘‘(B) EXCLUDED ACTIVITIES.—An M&A 

24 broker is not exempt from registration under 
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1 this paragraph if such broker does any of the 

2 following: 

3 ‘‘(i) Directly or indirectly, in connec4 tion with the transfer of ownership of an 

5 eligible privately held company, receives, 

6 holds, transmits, or has custody of the 

7 funds or securities to be exchanged by the 

8 parties to the transaction. 

9 ‘‘(ii) Engages on behalf of an issuer in 

10 a public offering of any class of securities 

11 that is registered, or is required to be reg12 istered, with the Commission under section 

13 12 or with respect to which the issuer files, 

14 or is required to file, periodic information, 

15 documents, and reports under subsection 

16 (d). 

17 ‘‘(C) RULE OF CONSTRUCTION.—Nothing 

18 in this paragraph shall be construed to limit 

19 any other authority of the Commission to ex20 empt any person, or any class of persons, from 

21 any provision of this title, or from any provision 

22 of any rule or regulation thereunder. 

23 ‘‘(D) DEFINITIONS.—In this paragraph: 

24 ‘‘(i) CONTROL.—The term ‘control’ 

25 means the power, directly or indirectly, to 
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1 direct the management or policies of a 

2 company, whether through ownership of 

3 securities, by contract, or otherwise. There 

4 is a presumption of control for any person 

5 who— 

6 ‘‘(I) is a director, general part7 ner, member or manager of a limited 

8 liability company, or officer exercising 

9 executive responsibility (or has similar 

10 status or functions); 

11 ‘‘(II) has the right to vote 20 

12 percent or more of a class of voting 

13 securities or the power to sell or direct 

14 the sale of 20 percent or more of a 

15 class of voting securities; or 

16 ‘‘(III) in the case of a partner17 ship or limited liability company, has 

18 the right to receive upon dissolution, 

19 or has contributed, 20 percent or 

20 more of the capital. 

21 ‘‘(ii) ELIGIBLE PRIVATELY HELD

22 COMPANY.—The term ‘eligible privately 

23 held company’ means a company that 

24 meets both of the following conditions: 
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1 ‘‘(I) The company does not have 

2 any class of securities registered, or 

3 required to be registered, with the 

4 Commission under section 12 or with 

5 respect to which the company files, or 

6 is required to file, periodic informa7 tion, documents, and reports under 

8 subsection (d). 

9 ‘‘(II) In the fiscal year ending 

10 immediately before the fiscal year in 

11 which the services of the M&A broker 

12 are initially engaged with respect to 

13 the securities transaction, the com14 pany meets either or both of the fol15 lowing conditions (determined in ac16 cordance with the historical financial 

17 accounting records of the company): 

18 ‘‘(aa) The earnings of the 

19 company before interest, taxes, 

20 depreciation, and amortization 

21 are less than $25,000,000. 

22 ‘‘(bb) The gross revenues of 

23 the company are less than 

24 $250,000,000. 
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1 ‘‘(iii) M&A BROKER.—The term ‘M&A 

2 broker’ means a broker, and any person 

3 associated with a broker, engaged in the 

4 business of effecting securities transactions 

5 solely in connection with the transfer of 

6 ownership of an eligible privately held com7 pany, regardless of whether the broker acts 

8 on behalf of a seller or buyer, through the 

9 purchase, sale, exchange, issuance, repur10 chase, or redemption of, or a business com11 bination involving, securities or assets of 

12 the eligible privately held company, if the 

13 broker reasonably believes that— 

14 ‘‘(I) upon consummation of the 

15 transaction, any person acquiring se16 curities or assets of the eligible pri17 vately held company, acting alone or 

18 in concert, will control and, directly or 

19 indirectly, will be active in the man20 agement of the eligible privately held 

21 company or the business conducted 

22 with the assets of the eligible privately 

23 held company; and 

24 ‘‘(II) if any person is offered se25 curities in exchange for securities or 
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1 assets of the eligible privately held 

2 company, such person will, prior to 

3 becoming legally bound to consum4 mate the transaction, receive or have 

5 reasonable access to the most recent 

6 year-end balance sheet, income state7 ment, statement of changes in finan8 cial position, and statement of owner’s 

9 equity of the issuer of the securities 

10 offered in exchange, and, if the finan11 cial statements of the issuer are au12 dited, the related report of the inde13 pendent auditor, a balance sheet 

14 dated not more than 120 days before 

15 the date of the offer, and information 

16 pertaining to the management, busi17 ness, results of operations for the pe18 riod covered by the foregoing financial 

19 statements, and material loss contin20 gencies of the issuer. 

21 ‘‘(E) INFLATION ADJUSTMENT.— 

22 ‘‘(i) IN GENERAL.—On the date that 

23 is 5 years after the date of the enactment 

24 of the Small Business Mergers, Acquisi25 tions, Sales, and Brokerage Simplification 
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1 Act of 2014, and every 5 years thereafter, 

2 each dollar amount in subparagraph 

3 (D)(ii)(II) shall be adjusted by— 

4 ‘‘(I) dividing the annual value of 

5 the Employment Cost Index For 

6 Wages and Salaries, Private Industry 

7 Workers (or any successor index), as 

8 published by the Bureau of Labor 

9 Statistics, for the calendar year pre10 ceding the calendar year in which the 

11 adjustment is being made by the an12 nual value of such index (or suc13 cessor) for the calendar year ending 

14 December 31, 2012; and 

15 ‘‘(II) multiplying such dollar 

16 amount by the quotient obtained 

17 under subclause (I). 

18 ‘‘(ii) ROUNDING.—Each dollar 

19 amount determined under clause (i) shall 

20 be rounded to the nearest multiple of 

21 $100,000.’’. 

22 SEC. 402. EFFECTIVE DATE. 

23 This Act and any amendment made by this Act shall 

24 take effect on the date that is 90 days after the date of 

25 the enactment of this Act. 
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1 TITLE V—SMALL CAP LIQUIDITY 

2 REFORM ACT 

3 SEC. 501. LIQUIDITY PILOT PROGRAM FOR SECURITIES OF 

4 CERTAIN EMERGING GROWTH COMPANIES. 

5 (a) IN GENERAL.—Section 11A(c)(6) of the Securi6 ties Exchange Act of 1934 (15 U.S.C. 78k–1(c)(6)) is 

7 amended to read as follows: 

8 ‘‘(6) LIQUIDITY PILOT PROGRAM FOR SECURITIES

9 OF CERTAIN EMERGING GROWTH COMPANIES.— 

10 ‘‘(A) QUOTING INCREMENT.—Beginning on the 

11 date that is 90 days after the date of the enactment 

12 of the Small Cap Liquidity Reform Act of 2014, the 

13 securities of a covered emerging growth company 

14 shall be quoted using— 

15 ‘‘(i) a minimum increment of $0.05; or 

16 ‘‘(ii) if, not later than 60 days after such 

17 date of enactment, the company so elects in the 

18 manner described in subparagraph (D)— 

19 ‘‘(I) a minimum increment of $0.10; 

20 or 

21 ‘‘(II) the increment at which such se22 curities would be quoted without regard to 

23 the minimum increments established under 

24 this paragraph. 
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1 ‘‘(B) TRADING INCREMENT.—In the case of a 

2 covered emerging growth company the securities of 

3 which are quoted at a minimum increment of $0.05 

4 or $0.10 under this paragraph, the Commission shall 

5 determine the increment at which the securities of 

6 such company are traded. 

7 ‘‘(C) FUTURE RIGHT TO OPT OUT OR CHANGE

8 MINIMUM INCREMENT.— 

9 ‘‘(i) IN GENERAL.—At any time beginning 

10 on the date that is 90 days after the date of the 

11 enactment of the Small Cap Liquidity Reform 

12 Act of 2014, a covered emerging growth com13 pany the securities of which are quoted at a 

14 minimum increment of $0.05 or $0.10 under 

15 this paragraph may elect in the manner de16 scribed in subparagraph (D)— 

17 ‘‘(I) for the securities of such com18 pany to be quoted at the increment at 

19 which such securities would be quoted 

20 without regard to the minimum increments 

21 established under this paragraph; or 

22 ‘‘(II) to change the minimum incre23 ment at which the securities of such com24 pany are quoted from $0.05 to $0.10 or 

25 from $0.10 to $0.05. 
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1 ‘‘(ii) WHEN ELECTION EFFECTIVE.—An 

2 election under this subparagraph shall take ef3 fect on the date that is 30 days after such elec4 tion is made. 

5 ‘‘(iii) SINGLE ELECTION TO CHANGE MIN6 IMUM INCREMENT.—A covered emerging growth 

7 company may not make more than one election 

8 under clause (i)(II). 

9 ‘‘(D) MANNER OF ELECTION.— 

10 ‘‘(i) IN GENERAL.—An election is made in 

11 the manner described in this subparagraph by 

12 informing the Commission of such election. 

13 ‘‘(ii) NOTIFICATION OF EXCHANGES AND

14 OTHER TRADING VENUES.—Upon being in15 formed of an election under clause (i), the Com16 mission shall notify each exchange or other 

17 trading venue where the securities of the cov18 ered emerging growth company are quoted or 

19 traded. 

20 ‘‘(E) ISSUERS CEASING TO BE COVERED

21 EMERGING GROWTH COMPANIES.— 

22 ‘‘(i) IN GENERAL.—If an issuer the securi23 ties of which are quoted at a minimum incre24 ment of $0.05 or $0.10 under this paragraph 

25 ceases to be a covered emerging growth com-
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1 pany, the securities of such issuer shall be 

2 quoted at the increment at which such securi3 ties would be quoted without regard to the min4 imum increments established under this para5 graph. 

6 ‘‘(ii) EXCEPTIONS.—The Commission may 

7 by regulation, as the Commission considers ap8 propriate, specify any circumstances under 

9 which an issuer shall continue to be considered 

10 a covered emerging growth company for pur11 poses of this paragraph after the issuer ceases 

12 to meet the requirements of subparagraph 

13 (L)(i). 

14 ‘‘(F) SECURITIES TRADING BELOW $1.— 

15 ‘‘(i) INITIAL PRICE.— 

16 ‘‘(I) AT EFFECTIVE DATE.—If the 

17 trading price of the securities of a covered 

18 emerging growth company is below $1 at 

19 the close of the last trading day before the 

20 date that is 90 days after the date of the 

21 enactment of the Small Cap Liquidity Re22 form Act of 2014, the securities of such 

23 company shall be quoted using the incre24 ment at which such securities would be 
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1 quoted without regard to the minimum in2 crements established under this paragraph. 

3 ‘‘(II) AT IPO.—If a covered emerging 

4 growth company makes an initial public of5 fering after the day described in subclause 

6 (I) and the first share of the securities of 

7 such company is offered to the public at a 

8 price below $1, the securities of such com9 pany shall be quoted using the increment 

10 at which such securities would be quoted 

11 without regard to the minimum increments 

12 established under this paragraph. 

13 ‘‘(ii) AVERAGE TRADING PRICE.—If the av14 erage trading price of the securities of a cov15 ered emerging growth company falls below $1 

16 for any 90-day period beginning on or after the 

17 day before the date of the enactment of the 

18 Small Cap Liquidity Reform Act of 2014, the 

19 securities of such company shall, after the end 

20 of such period, be quoted using the increment 

21 at which such securities would be quoted with22 out regard to the minimum increments estab23 lished under this paragraph. 

24 ‘‘(G) FRAUD OR MANIPULATION.—If the Com25 mission determines that a covered emerging growth 
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1 company has violated any provision of the securities 

2 laws prohibiting fraudulent, manipulative, or decep3 tive acts or practices, the securities of such company 

4 shall, after the date of the determination, be quoted 

5 using the increment at which such securities would 

6 be quoted without regard to the minimum incre7 ments established under this paragraph. 

8 ‘‘(H) INELIGIBILITY FOR INCREASED MINIMUM

9 INCREMENT PERMANENT.—The securities of an 

10 issuer may not be quoted at a minimum increment 

11 of $0.05 or $0.10 under this paragraph at any time 

12 after— 

13 ‘‘(i) such issuer makes an election under 

14 subparagraph (A)(ii)(II); 

15 ‘‘(ii) such issuer makes an election under 

16 subparagraph (C)(i)(I), except during the pe17 riod before such election takes effect; or 

18 ‘‘(iii) the securities of such issuer are re19 quired by this paragraph to be quoted using the 

20 increment at which such securities would be 

21 quoted without regard to the minimum incre22 ments established under this paragraph. 

23 ‘‘(I) ADDITIONAL REPORTS AND DISCLO24 SURES.—The Commission shall require a covered 

25 emerging growth company the securities of which 
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1 are quoted at a minimum increment of $0.05 or 

2 $0.10 under this paragraph to make such reports 

3 and disclosures as the Commission considers nec4 essary or appropriate in the public interest or for 

5 the protection of investors. 

6 ‘‘(J) LIMITATION OF LIABILITY.—An issuer (or 

7 any officer, director, manager, or other agent of 

8 such issuer) shall not be liable to any person (other 

9 than such issuer) under any law or regulation of the 

10 United States, any constitution, law, or regulation of 

11 any State or political subdivision thereof, or any con12 tract or other legally enforceable agreement (includ13 ing any arbitration agreement) for any losses caused 

14 solely by the quoting of the securities of such issuer 

15 at a minimum increment of $0.05 or $0.10, by the 

16 trading of such securities at the increment deter17 mined by the Commission under subparagraph (B), 

18 or by both such quoting and trading, as provided in 

19 this paragraph. 

20 ‘‘(K) REPORT TO CONGRESS.—Not later than 6 

21 months after the date of the enactment of the Small 

22 Cap Liquidity Reform Act of 2014, and every 6 

23 months thereafter, the Commission, in coordination 

24 with each exchange on which the securities of cov25 ered emerging growth companies are quoted or trad-
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1 ed, shall submit to Congress a report on the quoting 

2 and trading of securities in increments permitted by 

3 this paragraph and the extent to which such quoting 

4 and trading are increasing liquidity and active trad5 ing by incentivizing capital commitment, research 

6 coverage, and brokerage support, together with any 

7 legislative recommendations the Commission may 

8 have. 

9 ‘‘(L) DEFINITIONS.—In this paragraph: 

10 ‘‘(i) COVERED EMERGING GROWTH COM11 PANY.—The term ‘covered emerging growth 

12 company’ means an emerging growth company, 

13 as defined in the first paragraph (80) of section 

14 3(a), except that— 

15 ‘‘(I) such paragraph shall be applied 

16 by substituting ‘$750,000,000’ for 

17 ‘$1,000,000,000’ each place it appears; 

18 and 

19 ‘‘(II) subparagraphs (B), (C), and (D) 

20 of such paragraph do not apply. 

21 ‘‘(ii) SECURITY.—The term ‘security’ 

22 means an equity security. 

23 ‘‘(M) SAVINGS PROVISION.—Notwithstanding 

24 any other provision of this paragraph, the Commis25 sion may— 
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1 ‘‘(i) make such adjustments to the pilot 

2 program specified in this paragraph as the 

3 Commission considers necessary or appropriate 

4 to ensure that such program can provide statis5 tically meaningful or reliable results, including 

6 adjustments to eliminate selection bias among 

7 participants, expand the number of participants 

8 eligible to participate in such program, and 

9 change the duration of such program for one or 

10 more participants; and 

11 ‘‘(ii) conduct any other study or pilot pro12 gram, in conjunction with or separate from the 

13 pilot program specified in this paragraph (as 

14 such program may be adjusted pursuant to 

15 clause (i)), to evaluate quoting or trading in 

16 various minimum increments.’’. 

17 (b) SUNSET.—Effective on the date that is 5 years 

18 after the date of the enactment of this Act, section 

19 11A(c)(6) of the Securities Exchange Act of 1934 (15 

20 U.S.C. 78k–1(c)(6)) is repealed. 
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1 TITLE VI—IMPROVING ACCESS 

2 TO CAPITAL FOR EMERGING 

3 GROWTH COMPANIES ACT 

4 SEC. 601. FILING REQUIREMENT FOR PUBLIC FILING 

5 PRIOR TO PUBLIC OFFERING. 

6 Section 6(e)(1) of the Securities Act of 1933 (15 

7 U.S.C. 77f(e)(1)) is amended by striking ‘‘21 days’’ and 

8 inserting ‘‘15 days’’. 

9 SEC. 602. GRACE PERIOD FOR CHANGE OF STATUS OF 

10 EMERGING GROWTH COMPANIES. 

11 Section 6(e)(1) of the Securities Act of 1933 (15 

12 U.S.C. 77f(e)(1)) is further amended by adding at the end 

13 the following: ‘‘An issuer that was an emerging growth 

14 company at the time it submitted a confidential registra15 tion statement or, in lieu thereof, a publicly filed registra16 tion statement for review under this subsection but ceases 

17 to be an emerging growth company thereafter shall con18 tinue to be treated as an emerging market growth com19 pany for the purposes of this subsection through the ear20 lier of the date on which the issuer consummates its initial 

21 public offering pursuant to such registrations statement 

22 or the end of the 1-year period beginning on the date the 

23 company ceases to be an emerging growth company.’’. 
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1 SEC. 603. SIMPLIFIED DISCLOSURE REQUIREMENTS FOR 

2 EMERGING GROWTH COMPANIES. 

3 Section 102 of the Jumpstart Our Business Startups 

4 Act (Public Law 112–106) is amended by adding at the 

5 end the following: 

6 ‘‘(d) SIMPLIFIED DISCLOSURE REQUIREMENTS.— 

7 With respect to an emerging growth company (as such 

8 term is defined under section 2 of the Securities Act of 

9 1933): 

10 ‘‘(1) REQUIREMENT TO INCLUDE NOTICE ON

11 FORM S–1.—Not later than 30 days after the date 

12 of enactment of this subsection, the Securities and 

13 Exchange Commission shall revise its general in14 structions on Form S–1 to indicate that a registra15 tion statement filed (or submitted for confidential 

16 review) by an issuer prior to an initial public offer17 ing may omit financial information for historical pe18 riods otherwise required by regulation S–X (17 CFR 

19 210.1–01 et seq.) as of the time of filing (or con20 fidential submission) of such registration statement, 

21 provided that— 

22 ‘‘(A) the omitted financial information re23 lates to a historical period that the issuer rea24 sonably believes will not be required to be in25 cluded in the Form S–1 at the time of the con26 templated offering; and 
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1 ‘‘(B) prior to the issuer distributing a pre2 liminary prospectus to investors, such registra3 tion statement is amended to include all finan4 cial information required by such regulation S– 

5 X at the date of such amendment. 

6 ‘‘(2) RELIANCE BY ISSUERS.—Effective 30 days 

7 after the date of enactment of this subsection, an 

8 issuer filing a registration statement (or submitting 

9 the statement for confidential review) on Form S– 

10 1 may omit financial information for historical peri11 ods otherwise required by regulation S–X (17 CFR 

12 210.1–01 et seq.) as of the time of filing (or con13 fidential submission) of such registration statement, 

14 provided that— 

15 ‘‘(A) the omitted financial information re16 lates to a historical period that the issuer rea17 sonably believes will not be required to be in18 cluded in the Form S–1 at the time of the con19 templated offering; and 

20 ‘‘(B) prior to the issuer distributing a pre21 liminary prospectus to investors, such registra22 tion statement is amended to include all finan23 cial information required by such regulation S– 

24 X at the date of such amendment.’’. 
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1 TITLE VII—SMALL COMPANY 

2 DISCLOSURE SIMPLIFICA3 TION ACT 

4 SEC. 701. EXEMPTION FROM XBRL REQUIREMENTS FOR 

5 EMERGING GROWTH COMPANIES AND OTHER 

6 SMALLER COMPANIES. 

7 (a) EXEMPTION FOR EMERGING GROWTH COMPA8 NIES.—Emerging growth companies are exempted from 

9 the requirements to use Extensible Business Reporting 

10 Language (XBRL) for financial statements and other 

11 periodic reporting required to be filed with the Commis12 sion under the securities laws. Such companies may elect 

13 to use XBRL for such reporting. 

14 (b) EXEMPTION FOR OTHER SMALLER COMPA15 NIES.—Issuers with total annual gross revenues of less 

16 than $250,000,000 are exempt from the requirements to 

17 use XBRL for financial statements and other periodic re18 porting required to be filed with the Commission under 

19 the securities laws. Such issuers may elect to use XBRL 

20 for such reporting. An exemption under this subsection 

21 shall continue in effect until— 

22 (1) the date that is five years after the date of 

23 enactment of this Act; or 

24 (2) the date that is two years after a deter25 mination by the Commission, by order after con-
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1 ducting the analysis required by section 702, that 

2 the benefits of such requirements to such issuers 

3 outweigh the costs, but no earlier than three years 

4 after enactment of this Act. 

5 (c) MODIFICATIONS TO REGULATIONS.—Not later 

6 than 60 days after the date of enactment of this Act, the 

7 Commission shall revise its regulations under parts 229, 

8 230, 232, 239, 240, and 249 of title 17, Code of Federal 

9 Regulations, to reflect the exemptions set forth in sub10 sections (a) and (b). 

11 SEC. 702. ANALYSIS BY THE SEC. 

12 The Commission shall conduct an analysis of the 

13 costs and benefits to issuers described in section 701(b) 

14 of the requirements to use XBRL for financial statements 

15 and other periodic reporting required to be filed with the 

16 Commission under the securities laws. Such analysis shall 

17 include an assessment of— 

18 (1) how such costs and benefits may differ from 

19 the costs and benefits identified by the Commission 

20 in the order relating to interactive data to improve 

21 financial reporting (dated January 30, 2009; 74 

22 Fed. Reg. 6776) because of the size of such issuers; 

23 (2) the effects on efficiency, competition, capital 

24 formation, and financing and on analyst coverage of 
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1 such issuers (including any such effects resulting 

2 from use of XBRL by investors); 

3 (3) the costs to such issuers of— 

4 (A) submitting data to the Commission in 

5 XBRL; 

6 (B) posting data on the website of the 

7 issuer in XBRL; 

8 (C) software necessary to prepare, submit, 

9 or post data in XBRL; and 

10 (D) any additional consulting services or 

11 filing agent services; 

12 (4) the benefits to the Commission in terms of 

13 improved ability to monitor securities markets, as14 sess the potential outcomes of regulatory alter15 natives, and enhance investor participation in cor16 porate governance and promote capital formation; 

17 and 

18 (5) the effectiveness of standards in the United 

19 States for interactive filing data relative to the 

20 standards of international counterparts. 

21 SEC. 703. REPORT TO CONGRESS. 

22 Not later than one year after the date of enactment 

23 of this Act, the Commission shall provide the Committee 

24 on Financial Services of the House of Representatives and 
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1 the Committee on Banking, Housing, and Urban Affairs 

2 of the Senate a report regarding— 

3 (1) the progress in implementing XBRL report4 ing within the Commission; 

5 (2) the use of XBRL data by Commission offi6 cials; 

7 (3) the use of XBRL data by investors; 

8 (4) the results of the analysis required by sec9 tion 702; and 

10 (5) any additional information the Commission 

11 considers relevant for increasing transparency, de12 creasing costs, and increasing efficiency of regu13 latory filings with the Commission. 

14 SEC. 704. DEFINITIONS. 

15 As used in this title, the terms ‘‘Commission’’, 

16 ‘‘emerging growth company’’, ‘‘issuer’’, and ‘‘securities 

17 laws’’ have the meanings given such terms in section 3 

18 of the Securities Exchange Act of 1934 (15 U.S.C. 78c). 
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1 TITLE VIII—RESTORING PROVEN 

2 FINANCING FOR AMERICAN 

3 EMPLOYERS ACT 

4 SEC. 801. RULES OF CONSTRUCTION RELATING TO 

5 COLLATERALIZED LOAN OBLIGATIONS. 

6 Section 13(g) of the Bank Holding Company Act of 

7 1956 (12 U.S.C. 1851(g)) is amended by adding at the 

8 end the following new paragraphs: 

9 ‘‘(4) COLLATERALIZED LOAN OBLIGATIONS.— 

10 ‘‘(A) INAPPLICABILITY TO CERTAIN

11 COLLATERALIZED LOAN OBLIGATIONS.—Noth12 ing in this section shall be construed to require 

13 the divestiture, prior to July 21, 2017, of any 

14 debt securities of collateralized loan obligations, 

15 if such debt securities were issued before Janu16 ary 31, 2014. 

17 ‘‘(B) OWNERSHIP INTEREST WITH RE18 SPECT TO COLLATERALIZED LOAN OBLIGA19 TIONS.—A banking entity shall not be consid20 ered to have an ownership interest in a 

21 collateralized loan obligation because it ac22 quires, has acquired, or retains a debt security 

23 in such collateralized loan obligation if the debt 

24 security has no indicia of ownership other than 

25 the right of the banking entity to participate in 
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1 the removal for cause, or in the selection of a 

2 replacement after removal for cause or resigna3 tion, of an investment manager or investment 

4 adviser of the collateralized loan obligation. 

5 ‘‘(C) DEFINITIONS.—For purposes of this 

6 paragraph: 

7 ‘‘(i) COLLATERALIZED LOAN OBLIGA8 TION.—The term ‘collateralized loan obli9 gation’ means any issuing entity of an 

10 asset-backed security, as defined in section 

11 3(a)(77) of the Securities Exchange Act of 

12 1934 (15 U.S.C. 78c(a)(77)), that is com13 prised primarily of commercial loans. 

14 ‘‘(ii) REMOVAL FOR CAUSE.—An in15 vestment manager or investment adviser 

16 shall be deemed to be removed ‘for cause’ 

17 if the investment manager or investment 

18 adviser is removed as a result of— 

19 ‘‘(I) a breach of a material term 

20 of the applicable management or advi21 sory agreement or the agreement gov22 erning the collateralized loan obliga23 tion; 

24 ‘‘(II) the inability of the invest25 ment manager or investment adviser 
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•HR 5405 EH

1 to continue to perform its obligations 

2 under any such agreement; 

3 ‘‘(III) any other action or inac4 tion by the investment manager or in5 vestment adviser that has or could 

6 reasonably be expected to have a ma7 terially adverse effect on the 

8 collateralized loan obligation, if the in9 vestment manager or investment ad10 viser fails to cure or take reasonable 

11 steps to cure such effect within a rea12 sonable time; or 

13 ‘‘(IV) a comparable event or cir14 cumstance that threatens, or could 

15 reasonably be expected to threaten, 

16 the interests of holders of the debt se17 curities.’’. 

18 TITLE IX—SBIC ADVISERS 

19 RELIEF ACT 

20 SEC. 901. ADVISERS OF SBICS AND VENTURE CAPITAL 

21 FUNDS. 

22 Section 203(l) of the Investment Advisers Act of 

23 1940 (15 U.S.C. 80b–3(l)) is amended— 

24 (1) by striking ‘‘No investment adviser’’ and in25 serting the following: 
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1 ‘‘(1) IN GENERAL.—No investment adviser’’; 

2 and 

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

4 ‘‘(2) ADVISERS OF SBICS.—For purposes of this 

5 subsection, a venture capital fund includes an entity 

6 described in subparagraph (A), (B), or (C) of sub7 section (b)(7) (other than an entity that has elected 

8 to be regulated or is regulated as a business develop9 ment company pursuant to section 54 of the Invest10 ment Company Act of 1940).’’. 

11 SEC. 902. ADVISERS OF SBICS AND PRIVATE FUNDS. 

12 Section 203(m) of the Investment Advisers Act of 

13 1940 (15 U.S.C. 80b–3(m)) is amended by adding at the 

14 end the following: 

15 ‘‘(3) ADVISERS OF SBICS.—For purposes of this 

16 subsection, the assets under management of a pri17 vate fund that is an entity described in subpara18 graph (A), (B), or (C) of subsection (b)(7) (other 

19 than an entity that has elected to be regulated or is 

20 regulated as a business development company pursu21 ant to section 54 of the Investment Company Act of 

22 1940) shall be excluded from the limit set forth in 

23 paragraph (1).’’. 
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1 SEC. 903. RELATIONSHIP TO STATE LAW. 

2 Section 203A(b)(1) of the Investment Advisers Act 

3 of 1940 (15 U.S.C. 80b–3a(b)(1)) is amended— 

4 (1) in subparagraph (A), by striking ‘‘or’’ at 

5 the end; 

6 (2) in subparagraph (B), by striking the period 

7 at the end and inserting ‘‘; or’’; and 

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

9 ‘‘(C) that is not registered under section 

10 203 because that person is exempt from reg11 istration as provided in subsection (b)(7) of 

12 such section, or is a supervised person of such 

13 person.’’. 

14 TITLE X—DISCLOSURE MOD15 ERNIZATION AND SIM16 PLIFICATION ACT 

17 SEC. 1001. SUMMARY PAGE FOR FORM 10–K. 

18 Not later than the end of the 180-day period begin19 ning on the date of the enactment of this Act, the Securi20 ties and Exchange Commission shall issue regulations to 

21 permit issuers to submit a summary page on form 10– 

22 K (17 CFR 249.310), but only if each item on such sum23 mary page includes a cross-reference (by electronic link 

24 or otherwise) to the material contained in form 10–K to 

25 which such item relates. 
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1 SEC. 1002. IMPROVEMENT OF REGULATION S–K. 

2 Not later than the end of the 180-day period begin3 ning on the date of the enactment of this Act, the Securi4 ties and Exchange Commission shall take all such actions 

5 to revise regulation S–K (17 CFR 229.10 et seq.)— 

6 (1) to further scale or eliminate requirements of 

7 regulation S–K, in order to reduce the burden on 

8 emerging growth companies, accelerated filers, 

9 smaller reporting companies, and other smaller 

10 issuers, while still providing all material information 

11 to investors; 

12 (2) to eliminate provisions of regulation S–K, 

13 required for all issuers, that are duplicative, overlap14 ping, outdated, or unnecessary; and 

15 (3) for which the Commission determines that 

16 no further study under section 1003 is necessary to 

17 determine the efficacy of such revisions to regulation 

18 S–K. 

19 SEC. 1003. STUDY ON MODERNIZATION AND SIMPLIFICA20 TION OF REGULATION S–K. 

21 (a) STUDY.—The Securities and Exchange Commis22 sion shall carry out a study of the requirements contained 

23 in regulation S–K (17 CFR 229.10 et seq.). Such study 

24 shall— 

25 (1) determine how best to modernize and sim26 plify such requirements in a manner that reduces 
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1 the costs and burdens on issuers while still providing 

2 all material information; 

3 (2) emphasize a company by company approach 

4 that allows relevant and material information to be 

5 disseminated to investors without boilerplate lan6 guage or static requirements while preserving com7 pleteness and comparability of information across 

8 registrants; and 

9 (3) evaluate methods of information delivery 

10 and presentation and explore methods for discour11 aging repetition and the disclosure of immaterial in12 formation. 

13 (b) CONSULTATION.—In conducting the study re14 quired under subsection (a), the Commission shall consult 

15 with the Investor Advisory Committee and the Advisory 

16 Committee on Small and Emerging Companies. 

17 (c) REPORT.—Not later than the end of the 360-day 

18 period beginning on the date of enactment of this Act, the 

19 Commission shall issue a report to the Congress con20 taining— 

21 (1) all findings and determinations made in car22 rying out the study required under subsection (a); 

23 (2) specific and detailed recommendations on 

24 modernizing and simplifying the requirements in 

25 regulation S–K in a manner that reduces the costs 
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1 and burdens on companies while still providing all 

2 material information; and 

3 (3) specific and detailed recommendations on 

4 ways to improve the readability and navigability of 

5 disclosure documents and to discourage repetition 

6 and the disclosure of immaterial information. 

7 (d) RULEMAKING.—Not later than the end of the 

8 360-day period beginning on the date that the report is 

9 issued to the Congress under subsection (c), the Commis10 sion shall issue a proposed rule to implement the rec11 ommendations of the report issued under subsection (c). 

12 (e) RULE OF CONSTRUCTION.—Revisions made to 

13 regulation S–K by the Commission under section 1002 

14 shall not be construed as satisfying the rulemaking re15 quirements under this section. 

16 TITLE XI—ENCOURAGING 

17 EMPLOYEE OWNERSHIP ACT 

18 SEC. 1101. INCREASED THRESHOLD FOR DISCLOSURES RE19 LATING TO COMPENSATORY BENEFIT PLANS. 

20 Not later than 60 days after the date of the enact21 ment of this Act, the Securities and Exchange Commission 

22 shall revise section 230.701(e) of title 17, Code of Federal 

23 Regulations, so as to increase from $5,000,000 to 

24 $10,000,000 the aggregate sales price or amount of secu25 rities sold during any consecutive 12-month period in ex-
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1 cess of which the issuer is required under such section to 

2 deliver an additional disclosure to investors. The Commis3 sion shall index for inflation such aggregate sales price 

4 or amount every 5 years to reflect the change in the Con5 sumer Price Index for All Urban Consumers published by 

6 the Bureau of Labor Statistics, rounding to the nearest 

7 $1,000,000. 

Passed the House of Representatives September 16, 

2014. 

Attest: 

Clerk. 
113TH CONGRESS 

2D SESSION H. R. 5405 

AN ACT 

To make technical corrections to the Dodd-Frank 

dens, and for other purposes. lic and private markets, to reduce regulatory burgrowth companies to access capital through pubAct, to enhance the ability of small and emerging Wall Street Reform and Consumer Protection