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] 
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A BILL 
To amend the Securities Exchange Act of 1934 to change 
the threshold number of shareholders for required reg-
istration under that Act. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Private Company 
Flexibility and Growth Act’’. 
SEC. 2. THRESHOLD FOR REGISTRATION. 
Section 12(g)(1)(B) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78l(g)(1)(B)) is amended by striking 
‘‘shall—’’ and all that follows through ‘‘register’’ and in-
sert ‘‘shall, within 120 days after the last day of its first 
fiscal year ended on which the issuer has total assets ex-
ceeding $10,000,000 and a class of equity security (other 
than an exempted security) held of record by 1,000 per-
sons, register’’. 
SEC. 3. ACCREDITED INVESTORS AND EMPLOYEES. 
Section 12(g)(5) of the Securities Exchange Act of 
1934 (15 U.S.C. 78l(g)(5)) is amended by adding at the 
end the following: ‘‘For purposes of determining whether 
an issuer is required to register a security with the Com-
mission pursuant to paragraph (1), the definition of ‘held 
of record’ shall not include securities held by persons who 
qualify as accredited investors (as that term is defined by 
the Commission) or securities that are held by persons 
who received the securities pursuant to an employee com-
pensation plan in transactions exempted from the registra-
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tion requirements of section 5 of the Securities Act of 
1933.’’. 
SEC. 4. COMMISSION RULEMAKING. 
The Securities and Exchange Commission shall revise 
the definition of ‘‘held of record’’ pursuant to section 
12(g)(5) of the Securities Exchange Act of 1934 (15 
U.S.C. 78l(g)(5)) to implement the amendment made by 
section 2. The Commission shall also adopt safe harbor 
provisions that issuers can follow when determining 
whether holders of their securities are accredited investors 
or that holders of their securities received the securities 
pursuant to an employee compensation plan in trans-
actions that were exempt from the registration require-
ments of section 5 of the Securities Act of 1933. 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Private Company Flexi-
bility and Growth Act’’. 
SEC. 2. THRESHOLD FOR REGISTRATION. 
Section 12(g)(1) of the Securities Exchange Act of 
1934 (15 U.S.C. 78l(g)(1)) is amended by striking ‘‘shall— 
’’ and all that follows through the first instance of ‘‘register’’ 
and insert ‘‘shall, within 120 days after the last day of its 
first fiscal year ended on which the issuer has total assets 
exceeding $10,000,000 and a class of equity security (other 
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than an exempted security) held of record by 1,000 persons, 
register’’. 
SEC. 3. EMPLOYEES. 
Section 12(g)(5) of the Securities Exchange Act of 
1934 (15 U.S.C. 78l(g)(5)) is amended by adding at the 
end the following: ‘‘For purposes of determining whether an 
issuer is required to register a security with the Commission 
pursuant to paragraph (1), the definition of ‘held of record’ 
shall not include securities held by persons who received the 
securities pursuant to an employee compensation plan in 
transactions exempted from the registration requirements of 
section 5 of the Securities Act of 1933.’’. 
SEC. 4. COMMISSION RULEMAKING. 
The Securities and Exchange Commission shall revise 
the definition of ‘‘held of record’’ pursuant to section 
12(g)(5) of the Securities Exchange Act of 1934 (15 U.S.C. 
78l(g)(5)) to implement the amendment made by section 2. 
The Commission shall also adopt safe harbor provisions 
that issuers can follow when determining that holders of 
their securities received the securities pursuant to an em-
ployee compensation plan in transactions that were exempt 
from the registration requirements of section 5 of the Secu-
rities Act of 1933. 
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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 
change the threshold number of shareholders for 
required registration under that Act. 
DECEMBER 12, 2011 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed 
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00:37 Dec 13, 2011
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