IIB 
114TH CONGRESS 
2D SESSION 
H. R. 1675 
IN THE SENATE OF THE UNITED STATES 
FEBRUARY 4, 2016 
Received; read twice and referred to the Committee on Banking, Housing, and 
Urban Affairs 
AN ACT 
To direct the Securities and Exchange Commission to revise 
its rules so as to increase the threshold amount for 
requiring issuers to provide certain disclosures relating 
to compensatory benefit plans. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Capital Markets Improvement Act of 2016’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
TITLE I—ENCOURAGING EMPLOYEE OWNERSHIP 
Sec. 101. Increased threshold for disclosures relating to compensatory benefit 
plans. 
TITLE II—FAIR ACCESS TO INVESTMENT RESEARCH 
Sec. 201. Safe harbor for investment fund research. 
TITLE III—SMALL BUSINESS MERGERS, ACQUISITIONS, SALES, 
AND BROKERAGE SIMPLIFICATION 
Sec. 301. Registration exemption for merger and acquisition brokers. 
Sec. 302. Effective date. 
TITLE IV—SMALL COMPANY DISCLOSURE SIMPLIFICATION 
Sec. 401. Exemption from XBRL requirements for emerging growth companies 
and other smaller companies. 
Sec. 402. Analysis by the SEC. 
Sec. 403. Report to Congress. 
Sec. 404. Definitions. 
TITLE V—STREAMLINING EXCESSIVE AND COSTLY REGULATIONS 
REVIEW 
Sec. 501. Regulatory review. 
TITLE I—ENCOURAGING 
EMPLOYEE OWNERSHIP 
SEC. 101. INCREASED THRESHOLD FOR DISCLOSURES RE-
LATING TO COMPENSATORY BENEFIT PLANS. 
Not later than 60 days after the date of the enact-
ment of this Act, the Securities and Exchange Commission 
shall revise section 230.701(e) of title 17, Code of Federal 
Regulations, so as to increase from $5,000,000 to 
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$10,000,000 the aggregate sales price or amount of secu-
rities sold during any consecutive 12-month period in ex-
cess of which the issuer is required under such section to 
deliver an additional disclosure to investors. The Commis-
sion shall index for inflation such aggregate sales price 
or amount every 5 years to reflect the change in the Con-
sumer Price Index for All Urban Consumers published by 
the Bureau of Labor Statistics, rounding to the nearest 
$1,000,000. 
TITLE II—FAIR ACCESS TO 
INVESTMENT RESEARCH 
SEC. 201. SAFE HARBOR FOR INVESTMENT FUND RE-
SEARCH. 
(a) EXPANSION OF SAFE HARBOR.—Not later than 
the end of the 45-day period beginning on the date of en-
actment of this Act, the Securities and Exchange Commis-
sion shall propose, and not later than the end of the 120- 
day period beginning on such date, the Commission shall 
adopt, upon such terms, conditions, or requirements as the 
Commission may determine necessary or appropriate in 
the public interest, for the protection of investors, and for 
the promotion of capital formation, revisions to section 
230.139 of title 17, Code of Federal Regulations, to pro-
vide that a covered investment fund research report— 
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(1) shall be deemed, for purposes of sections 
2(a)(10) and 5(c) of the Securities Act of 1933, not 
to constitute an offer for sale or an offer to sell a 
security that is the subject of an offering pursuant 
to a registration statement that the issuer proposes 
to file, or has filed, or that is effective, even if the 
broker or dealer is participating or will participate 
in the registered offering of the covered investment 
fund’s securities; and 
(2) shall be deemed to satisfy the conditions of 
subsection (a)(1) or (a)(2) of section 230.139 of title 
17, Code of Federal Regulations, or any successor 
provisions, for purposes of the Commission’s rules 
and regulations under the Federal securities laws 
and the rules of any self-regulatory organization. 
(b) IMPLEMENTATION OF SAFE HARBOR.—In imple-
menting the safe harbor pursuant to subsection (a), the 
Commission shall— 
(1) not, in the case of a covered investment 
fund with a class of securities in substantially con-
tinuous distribution, condition the safe harbor on 
whether the broker’s or dealer’s publication or dis-
tribution of a covered investment fund research re-
port constitutes such broker’s or dealer’s initiation 
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or reinitiation of research coverage on such covered 
investment fund or its securities; 
(2) not— 
(A) require the covered investment fund to 
have been registered as an investment company 
under the Investment Company Act of 1940 or 
subject to the reporting requirements of section 
13 or 15(d) of the Securities Exchange Act of 
1934 for any period exceeding twelve months; 
or 
(B) impose a minimum float provision ex-
ceeding 
that 
referenced 
in 
subsection 
(a)(1)(i)(A)(1)(i) of section 230.139 of title 17, 
Code of Federal Regulations; 
(3) provide that a self-regulatory organization 
may not maintain or enforce any rule that would— 
(A) condition the ability of a member to 
publish or distribute a covered investment fund 
research report on whether the member is also 
participating in a registered offering or other 
distribution of any securities of such covered in-
vestment fund; 
(B) condition the ability of a member to 
participate in a registered offering or other dis-
tribution of securities of a covered investment 
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fund on whether the member has published or 
distributed a covered investment fund research 
report about such covered investment fund or 
its securities; or 
(C) require the filing of a covered invest-
ment fund research report with such self-regu-
latory organization; and 
(4) provide that a covered investment fund re-
search report shall not be subject to sections 24(b) 
or 34(b) of the Investment Company Act of 1940 or 
the rules and regulations thereunder. 
(c) RULES OF CONSTRUCTION.—Nothing in this sec-
tion shall be construed as in any way limiting— 
(1) the applicability of the antifraud provisions 
of the Federal securities laws; or 
(2) the authority of any self-regulatory organi-
zation to examine or supervise a member’s practices 
in connection with such member’s publication or dis-
tribution of a covered investment fund research re-
port for compliance with otherwise applicable provi-
sions of the Federal securities laws or self-regulatory 
organization rules. 
(d) INTERIM EFFECTIVENESS OF SAFE HARBOR.— 
From and after the 120-day period beginning on the date 
of enactment of this Act, if the Commission has not met 
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its obligations pursuant to subsection (a) to adopt revi-
sions to section 230.139 of title 17, Code of Federal Regu-
lations, and until such time as the Commission has done 
so, a covered investment fund research report published 
or distributed by a broker or dealer after such date shall 
be deemed to meet the requirements of section 230.139 
of title 17, Code of Federal Regulations, and to satisfy 
the conditions of subsection (a)(1) or (a)(2) thereof for 
purposes of the Commission’s rules and regulations under 
the Federal securities laws and the rules of any self-regu-
latory organization, as if revised and implemented in ac-
cordance with subsections (a) and (b). 
(e) DEFINITIONS.—For purposes of this section: 
(1) COVERED
INVESTMENT
FUND
RESEARCH 
REPORT.—The term ‘‘covered investment fund re-
search report’’ means a research report published or 
distributed by a broker or dealer about a covered in-
vestment fund or any of its securities. 
(2) COVERED INVESTMENT FUND.—The term 
‘‘covered investment fund’’ means— 
(A) an investment company registered 
under, or that has filed an election to be treated 
as a business development company under, the 
Investment Company Act of 1940 and that has 
filed a registration statement under the Securi-
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ties Act of 1933 for the public offering of a 
class of its securities, which registration state-
ment has been declared effective by the Com-
mission; and 
(B) a trust or other person— 
(i) that has a class of securities listed 
for trading on a national securities ex-
change; 
(ii) the assets of which consist pri-
marily of commodities, currencies, or deriv-
ative instruments that reference commod-
ities or currencies, or interests in the fore-
going; and 
(iii) that allows its securities to be 
purchased or redeemed, subject to condi-
tions or limitations, for a ratable share of 
its assets. 
(3) RESEARCH REPORT.—The term ‘‘research 
report’’ has the meaning given to that term under 
section 2(a)(3) of the Securities Act of 1933, except 
that such term shall not include an oral communica-
tion. 
(4) SELF-REGULATORY
ORGANIZATION.—The 
term ‘‘self-regulatory organization’’ has the meaning 
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given to that term under section 3(a)(26) of the Se-
curities Exchange Act of 1934. 
TITLE 
III—SMALL 
BUSINESS 
MERGERS, 
ACQUISITIONS, 
SALES, AND BROKERAGE SIM-
PLIFICATION 
SEC. 301. REGISTRATION EXEMPTION FOR MERGER AND 
ACQUISITION BROKERS. 
Section 15(b) of the Securities Exchange Act of 1934 
(15 U.S.C. 78o(b)) is amended by adding at the end the 
following: 
‘‘(13) REGISTRATION EXEMPTION FOR MERGER 
AND ACQUISITION BROKERS.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), an M&A broker shall be ex-
empt from registration under this section. 
‘‘(B) EXCLUDED
ACTIVITIES.—An M&A 
broker is not exempt from registration under 
this paragraph if such broker does any of the 
following: 
‘‘(i) Directly or indirectly, in connec-
tion with the transfer of ownership of an 
eligible privately held company, receives, 
holds, transmits, or has custody of the 
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funds or securities to be exchanged by the 
parties to the transaction. 
‘‘(ii) Engages on behalf of an issuer in 
a public offering of any class of securities 
that is registered, or is required to be reg-
istered, with the Commission under section 
12 or with respect to which the issuer files, 
or is required to file, periodic information, 
documents, and reports under subsection 
(d). 
‘‘(iii) Engages on behalf of any party 
in a transaction involving a public shell 
company. 
‘‘(C) 
DISQUALIFICATIONS.—An 
M&A 
broker is not exempt from registration under 
this paragraph if such broker is subject to— 
‘‘(i) suspension or revocation of reg-
istration under paragraph (4); 
‘‘(ii) a statutory disqualification de-
scribed in section 3(a)(39); 
‘‘(iii) a disqualification under the 
rules adopted by the Commission under 
section 926 of the Investor Protection and 
Securities Reform Act of 2010 (15 U.S.C. 
77d note); or 
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