389 
orders of the Commission and such legisla-
tive actions as may be appropriate to re-
solve problems with the Commission and 
self-regulatory organizations encountered 
by small businesses and small business in-
vestors and to encourage small business 
capital formation; and 
‘‘(vi) any other information, as deter-
mined appropriate by the Advocate for 
Small Business Capital Formation. 
‘‘(C) CONFIDENTIALITY.—No report re-
quired by subparagraph (A) may contain con-
fidential information. 
‘‘(D) INDEPENDENCE.—Each report re-
quired under subparagraph (A) shall be pro-
vided directly to the committees of Congress 
listed in such subparagraph without any prior 
review or comment from the Commission, any 
commissioner, any other officer or employee of 
the Commission, or the Office of Management 
and Budget. 
‘‘(7) REGULATIONS.—The Commission shall es-
tablish procedures requiring a formal response to all 
recommendations submitted to the Commission by 
the Advocate for Small Business Capital Formation, 
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390 
not later than 3 months after the date of such sub-
mission. 
‘‘(8) GOVERNMENT-BUSINESS FORUM ON SMALL 
BUSINESS CAPITAL FORMATION.—The Advocate for 
Small Business Capital Formation shall be respon-
sible for planning, organizing, and executing the an-
nual Government-Business Forum on Small Busi-
ness Capital Formation described in section 503 of 
the Small Business Investment Incentive Act of 
1980 (15 U.S.C. 80c–1). 
‘‘(9) RULE
OF
CONSTRUCTION.—Nothing in 
this subsection may be construed as replacing or re-
ducing the responsibilities of the Investor Advocate 
with respect to small business investors.’’. 
(b) SMALL BUSINESS CAPITAL FORMATION ADVI-
SORY COMMITTEE.—The Securities Exchange Act of 1934 
(15 U.S.C. 78a et seq.) is amended by inserting after sec-
tion 39 the following: 
‘‘SEC. 40. SMALL BUSINESS CAPITAL FORMATION ADVISORY 
COMMITTEE. 
‘‘(a) ESTABLISHMENT AND PURPOSE.— 
‘‘(1) ESTABLISHMENT.—There is established 
within the Commission the Small Business Capital 
Formation Advisory Committee (hereafter in this 
section referred to as the ‘Committee’). 
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391 
‘‘(2) FUNCTIONS.— 
‘‘(A) IN GENERAL.—The Committee shall 
provide the Commission with advice on the 
Commission’s rules, regulations, and policies 
with regard to the Commission’s mission of pro-
tecting investors, maintaining fair, orderly, and 
efficient markets, and facilitating capital forma-
tion, as such rules, regulations, and policies re-
late to— 
‘‘(i) capital raising by emerging, pri-
vately held small businesses (‘emerging 
companies’) and publicly traded companies 
with less than $250,000,000 in public mar-
ket capitalization (‘smaller public compa-
nies’) through securities offerings, includ-
ing private and limited offerings and initial 
and other public offerings; 
‘‘(ii) trading in the securities of 
emerging companies and smaller public 
companies; and 
‘‘(iii) public reporting and corporate 
governance requirements of emerging com-
panies and smaller public companies. 
‘‘(B) LIMITATION.—The Committee shall 
not provide any advice with respect to any poli-
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392 
cies, practices, actions, or decisions concerning 
the Commission’s enforcement program. 
‘‘(b) MEMBERSHIP.— 
‘‘(1) IN GENERAL.—The members of the Com-
mittee shall be— 
‘‘(A) the Advocate for Small Business Cap-
ital Formation; 
‘‘(B) not fewer than 10, and not more than 
20, members appointed by the Commission, 
from among individuals— 
‘‘(i) who represent— 
‘‘(I) emerging companies engag-
ing in private and limited securities 
offerings or considering initial public 
offerings (‘IPO’) (including the com-
panies’ officers and directors); 
‘‘(II) the professional advisors of 
such companies (including attorneys, 
accountants, investment bankers, and 
financial advisors); and 
‘‘(III) the investors in such com-
panies (including angel investors, ven-
ture capital funds, and family offices); 
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393 
‘‘(ii) who are officers or directors of 
minority-owned 
small 
businesses 
and 
women-owned small businesses; 
‘‘(iii) who represent— 
‘‘(I) smaller public companies 
(including the companies’ officers and 
directors); 
‘‘(II) the professional advisors of 
such companies (including attorneys, 
auditors, underwriters, and financial 
advisors); and 
‘‘(III) the pre-IPO and post-IPO 
investors in such companies (both in-
stitutional, such as venture capital 
funds, and individual, such as angel 
investors); and 
‘‘(iv) who represent participants in the 
marketplace for the securities of emerging 
companies and smaller public companies, 
such as securities exchanges, alternative 
trading systems, analysts, information 
processors, and transfer agents; and 
‘‘(C) 3 non-voting members— 
‘‘(i) 1 of whom shall be appointed by 
the Investor Advocate; 
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394 
‘‘(ii) 1 of whom shall be appointed by 
the North American Securities Administra-
tors Association; and 
‘‘(iii) 1 of whom shall be appointed by 
the Administrator of the Small Business 
Administration. 
‘‘(2) TERM.—Each member of the Committee 
appointed under subparagraph (B), (C)(ii), or 
(C)(iii) of paragraph (1) shall serve for a term of 4 
years. 
‘‘(3) MEMBERS
NOT
COMMISSION
EMPLOY-
EES.—Members appointed under subparagraph (B), 
(C)(ii), or (C)(iii) of paragraph (1) shall not be 
treated as employees or agents of the Commission 
solely because of membership on the Committee. 
‘‘(c) CHAIRMAN; VICE CHAIRMAN; SECRETARY; AS-
SISTANT SECRETARY.— 
‘‘(1) IN GENERAL.—The members of the Com-
mittee shall elect, from among the members of the 
Committee— 
‘‘(A) a chairman; 
‘‘(B) a vice chairman; 
‘‘(C) a secretary; and 
‘‘(D) an assistant secretary. 
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395 
‘‘(2) TERM.—Each member elected under para-
graph (1) shall serve for a term of 3 years in the 
capacity for which the member was elected under 
paragraph (1). 
‘‘(d) MEETINGS.— 
‘‘(1) FREQUENCY
OF
MEETINGS.—The Com-
mittee shall meet— 
‘‘(A) not less frequently than four times 
annually, at the call of the chairman of the 
Committee; and 
‘‘(B) from time to time, at the call of the 
Commission. 
‘‘(2) NOTICE.—The chairman of the Committee 
shall give the members of the Committee written no-
tice of each meeting, not later than 2 weeks before 
the date of the meeting. 
‘‘(e) COMPENSATION
AND TRAVEL EXPENSES.— 
Each member of the Committee who is not a full-time em-
ployee of the United States shall— 
‘‘(1) be entitled to receive compensation at a 
rate not to exceed the daily equivalent of the annual 
rate of basic pay in effect for a position at level V 
of the Executive Schedule under section 5316 of title 
5, United States Code, for each day during which 
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396 
the member is engaged in the actual performance of 
the duties of the Committee; and 
‘‘(2) while away from the home or regular place 
of business of the member in the performance of 
services for the Committee, be allowed travel ex-
penses, including per diem in lieu of subsistence, in 
the same manner as persons employed intermittently 
in the Government service are allowed expenses 
under section 5703 of title 5, United States Code. 
‘‘(f) STAFF.—The Commission shall make available 
to the Committee such staff as the chairman of the Com-
mittee determines are necessary to carry out this section. 
‘‘(g) REVIEW
BY COMMISSION.—The Commission 
shall— 
‘‘(1) review the findings and recommendations 
of the Committee; and 
‘‘(2) each time the Committee submits a finding 
or recommendation to the Commission, promptly 
issue a public statement— 
‘‘(A) assessing the finding or recommenda-
tion of the Committee; and 
‘‘(B) disclosing the action, if any, the Com-
mission intends to take with respect to the find-
ing or recommendation.’’. 
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397 
(c) ANNUAL GOVERNMENT-BUSINESS FORUM
ON 
SMALL BUSINESS CAPITAL FORMATION.—Section 503(a) 
of the Small Business Investment Incentive Act of 1980 
(15 U.S.C. 80c–1(a)) is amended by inserting ‘‘(acting 
through the Office of the Advocate for Small Business 
Capital Formation and in consultation with the Small 
Business Capital Formation Advisory Committee)’’ after 
‘‘Securities and Exchange Commission’’. 
Subtitle H—Small Business Credit 
Availability 
SEC. 1036. BUSINESS DEVELOPMENT COMPANY OWNER-
SHIP OF SECURITIES OF INVESTMENT ADVIS-
ERS AND CERTAIN FINANCIAL COMPANIES. 
(a) IN GENERAL.— 
(1) IN GENERAL.—Not later than 1 year after 
the date of enactment of this Act, the Securities and 
Exchange Commission shall promulgate regulations 
to codify the order in Investment Company Act Re-
lease No. 30024, dated March 30, 2012. If the Com-
mission fails to complete the regulations as required 
by this subsection, a business development company 
shall be entitled to treat such regulations as having 
been completed in accordance with the actions re-
quired to be taken by the Commission until such 
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398 
time as such regulations are completed by the Com-
mission. 
(2) RULE OF CONSTRUCTION.—Nothing in this 
subsection shall prevent the Commission from 
issuing rules to address potential conflicts of interest 
between business development companies and invest-
ment advisers. 
(b) PERMISSIBLE ASSETS OF AN ELIGIBLE PORT-
FOLIO COMPANY.—Section 55 of the Investment Company 
Act of 1940 (15 U.S.C. 80a–54) is amended by adding 
at the end the following: 
‘‘(c) SECURITIES DEEMED TO BE PERMISSIBLE AS-
SETS.—Notwithstanding subsection (a), securities that 
would be described in paragraphs (1) through (6) of such 
subsection except that the issuer is a company described 
in paragraph (2), (3), (4), (5), (6), or (9) of section 3(c) 
may be deemed to be assets described in paragraphs (1) 
through (6) of subsection (a) to the extent necessary for 
the sum of the assets to equal 70 percent of the value 
of a business development company’s total assets (other 
than assets described in paragraph (7) of subsection (a)), 
provided that the aggregate value of such securities count-
ing toward such 70 percent shall not exceed 20 percent 
of the value of the business development company’s total 
assets.’’. 
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399 
SEC. 1037. EXPANDING ACCESS TO CAPITAL FOR BUSINESS 
DEVELOPMENT COMPANIES. 
(a) IN GENERAL.—Section 61(a) of the Investment 
Company Act of 1940 (15 U.S.C. 80a–60(a)) is amend-
ed— 
(1) by redesignating paragraphs (2) through 
(4) as paragraphs (3) through (5), respectively; 
(2) by striking paragraph (1) and inserting the 
following: 
‘‘(1) Except as provided in paragraph (2), the 
asset coverage requirements of subparagraphs (A) 
and (B) of section 18(a)(1) (and any related rule 
promulgated under this Act) applicable to business 
development companies shall be 200 percent. 
‘‘(2) The asset coverage requirements of sub-
paragraphs (A) and (B) of section 18(a)(1) and of 
subparagraphs (A) and (B) of section 18(a)(2) (and 
any related rule promulgated under this Act) appli-
cable to a business development company shall be 
150 percent if— 
‘‘(A) within five business days of the ap-
proval of the adoption of the asset coverage re-
quirements described in clause (ii), the business 
development company discloses such approval 
and the date of its effectiveness in a Form 8– 
K filed with the Commission and in a notice on 
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400 
its website and discloses in its periodic filings 
made under section 13 of the Securities Ex-
change Act of 1934 (15 U.S.C. 78m)— 
‘‘(i) the aggregate value of the senior 
securities issued by such company and the 
asset coverage percentage as of the date of 
such company’s most recent financial 
statements; and 
‘‘(ii) that such company has adopted 
the asset coverage requirements of this 
subparagraph and the effective date of 
such requirements; 
‘‘(B) with respect to a business develop-
ment company that issues equity securities that 
are registered on a national securities exchange, 
the periodic filings of the company under sec-
tion 13(a) of the Securities Exchange Act of 
1934 (15 U.S.C. 78m) include disclosures rea-
sonably designed to ensure that shareholders 
are informed of— 
‘‘(i) the amount of indebtedness and 
asset coverage ratio of the company, deter-
mined as of the date of the financial state-
ments of the company dated on or most re-
cently before the date of such filing; and 
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401 
‘‘(ii) the principal risk factors associ-
ated with such indebtedness, to the extent 
such risk is incurred by the company; and 
‘‘(C)(i) the application of this paragraph to 
the company is approved by the required major-
ity (as defined in section 57(o)) of the directors 
of or general partners of such company who are 
not interested persons of the business develop-
ment company, which application shall become 
effective on the date that is 1 year after the 
date of the approval, and, with respect to a 
business development company that issues eq-
uity securities that are not registered on a na-
tional securities exchange, the company extends, 
to each person who is a shareholder as of the 
date of the approval, an offer to repurchase the 
equity securities held by such person as of such 
approval date, with 25 percent of such securi-
ties to be repurchased in each of the four quar-
ters following such approval date; or 
‘‘(ii) the company obtains, at a special or 
annual meeting of shareholders or partners at 
which a quorum is present, the approval of 
more than 50 percent of the votes cast of the 
application of this paragraph to the company, 
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402 
which application shall become effective on the 
date immediately after the date of the ap-
proval.’’; 
(3) in paragraph (3) (as redesignated), by in-
serting ‘‘or which is a stock, provided that all such 
stock is issued in accordance with paragraph (6)’’ 
after ‘‘indebtedness’’; 
(4) in subparagraph (A) of paragraph (4) (as 
redesignated)— 
(A) in the matter preceding clause (i), by 
striking ‘‘voting’’; and 
(B) by amending clause (iii) to read as fol-
lows: 
‘‘(iii) the exercise or conversion price 
at the date of issuance of such warrants, 
options, or rights is not less than— 
‘‘(I) the market value of the se-
curities issuable upon the exercise of 
such warrants, options, or rights at 
the date of issuance of such warrants, 
options, or rights; or 
‘‘(II) if no such market value ex-
ists, the net asset value of the securi-
ties issuable upon the exercise of such 
warrants, options, or rights at the 
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403 
date of issuance of such warrants, op-
tions, or rights; and’’; and 
(5) by adding at the end the following: 
‘‘(6)(A) QUALIFIED INSTITUTIONAL BUYER.— 
Except as provided in subparagraph (B), the fol-
lowing shall not apply to a senior security which is 
a stock and which is issued to and held by a quali-
fied institutional buyer (as defined in section 
3(a)(64) of the Securities Exchange Act of 1934): 
‘‘(i) Subparagraphs (C) and (D) of section 
18(a)(2). 
‘‘(ii) Subparagraph (E) of section 18(a)(2), 
to the extent such subparagraph requires any 
priority over any other class of stock as to dis-
tribution of assets upon liquidation. 
‘‘(iii) With respect to a senior security 
which is a stock, subsections (c) and (i) of sec-
tion 18. 
‘‘(B) INDIVIDUAL
INVESTORS
WHO
ARE
NOT 
QUALIFIED INSTITUTIONAL BUYERS.—Subparagraph 
(A) shall not apply with respect to a senior security 
which is a stock and which is issued to a person who 
is not known by the business development company 
to be a qualified institutional buyer (as defined in 
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404 
section 3(a) of the Securities Exchange Act of 
1934). 
‘‘(7) 
RULE
OF
CONSTRUCTION.—Notwith-
standing any other provision of law, any additional 
class of stock issued pursuant to this section must 
be issued in accordance with all investor protections 
contained in all applicable federal securities laws ad-
ministered by the Commission.’’. 
(b) CONFORMING AMENDMENTS.—The Investment 
Company Act of 1940 (15 U.S.C. 80a–1 et seq.) is amend-
ed— 
(1) in section 57— 
(A) in subsection (j)(1), by striking ‘‘sec-
tion 
61(a)(3)(B)’’ 
and 
inserting 
‘‘section 
61(a)(4)(B)’’; and 
(B) in subsection (n)(2), by striking ‘‘sec-
tion 
61(a)(3)(B)’’ 
and 
inserting 
‘‘section 
61(a)(4)(B)’’; and 
(2) in section 63(3), by striking ‘‘section 
61(a)(3)’’ and inserting ‘‘section 61(a)(4)’’. 
SEC. 1038. PARITY FOR BUSINESS DEVELOPMENT COMPA-
NIES REGARDING OFFERING AND PROXY 
RULES. 
(a) REVISION TO RULES.—Not later than 1 year 
after the date of enactment of this Act, the Securities and 
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405 
Exchange Commission shall revise any rules to the extent 
necessary to allow a business development company that 
has filed an election pursuant to section 54 of the Invest-
ment Company Act of 1940 (15 U.S.C. 80a–53) to use 
the securities offering and proxy rules that are available 
to other issuers that are required to file reports under sec-
tion 13 or section 15(d) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78m; 78o(d)). Any action that the 
Commission takes pursuant to this subsection shall in-
clude the following: 
(1) The Commission shall revise rule 405 under 
the Securities Act of 1933 (17 C.F.R. 230.405)— 
(A) to remove the exclusion of a business 
development company from the definition of a 
well-known seasoned issuer provided by that 
rule; and 
(B) to add registration statements filed on 
Form N–2 to the definition of automatic shelf 
registration statement provided by that rule. 
(2) The Commission shall revise rules 168 and 
169 under the Securities Act of 1933 (17 C.F.R. 
230.168 and 230.169) to remove the exclusion of a 
business development company from an issuer that 
can use the exemptions provided by those rules. 
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406 
(3) The Commission shall revise rules 163 and 
163A under the Securities Act of 1933 (17 C.F.R. 
230.163 and 230.163A) to remove a business devel-
opment company from the list of issuers that are in-
eligible to use the exemptions provided by those 
rules. 
(4) The Commission shall revise rule 134 under 
the Securities Act of 1933 (17 C.F.R. 230.134) to 
remove the exclusion of a business development com-
pany from that rule. 
(5) The Commission shall revise rules 138 and 
139 under the Securities Act of 1933 (17 C.F.R. 
230.138 and 230.139) to specifically include a busi-
ness development company as an issuer to which 
those rules apply. 
(6) The Commission shall revise rule 164 under 
the Securities Act of 1933 (17 C.F.R. 230.164) to 
remove a business development company from the 
list of issuers that are excluded from that rule. 
(7) The Commission shall revise rule 433 under 
the Securities Act of 1933 (17 C.F.R. 230.433) to 
specifically include a business development company 
that is a well-known seasoned issuer as an issuer to 
which that rule applies. 
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407 
(8) The Commission shall revise rule 415 under 
the Securities Act of 1933 (17 C.F.R. 230.415)— 
(A) to state that the registration for secu-
rities provided by that rule includes securities 
registered by a business development company 
on Form N–2; and 
(B) to provide an exception for a business 
development company from the requirement 
that a Form N–2 registrant must furnish the 
undertakings required by item 34.4 of Form N– 
2. 
(9) The Commission shall revise rule 497 under 
the Securities Act of 1933 (17 C.F.R. 230.497) to 
include a process for a business development com-
pany to file a form of prospectus that is parallel to 
the process for filing a form of prospectus under 
rule 424(b). 
(10) The Commission shall revise rules 172 and 
173 under the Securities Act of 1933 (17 C.F.R. 
230.172 and 230.173) to remove the exclusion of an 
offering of a business development company from 
those rules. 
(11) The Commission shall revise rule 418 
under the Securities Act of 1933 (17 C.F.R. 
230.418) to provide that a business development 
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408 
company that would otherwise meet the eligibility re-
quirements of General Instruction I.A of Form S–3 
shall be exempt from paragraph (a)(3) of that rule. 
(12) The Commission shall revise rule 14a–101 
under the Securities Exchange Act of 1934 (17 
C.F.R. 240.14a–101) to provide that a business de-
velopment company that would otherwise meet the 
requirements of General Instruction I.A of Form S– 
3 shall be deemed to meet the requirements of Form 
S–3 for purposes of Schedule 14A. 
(13) The Commission shall revise rule 103 
under Regulation FD (17 C.F.R. 243.103) to pro-
vide that paragraph (a) of that rule applies for pur-
poses of Form N–2. 
(b) REVISION TO FORM N–2.—Not later than 1 year 
after the date of enactment of this Act, the Commission 
shall revise Form N–2— 
(1) to include an item or instruction that is 
similar to item 12 on Form S–3 to provide that a 
business development company that would otherwise 
meet the requirements of Form S–3 shall incor-
porate by reference its reports and documents filed 
under the Securities Exchange Act of 1934 into its 
registration statement filed on Form N–2; and 
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409 
(2) to include an item or instruction that is 
similar to the instruction regarding automatic shelf 
offerings by well-known seasoned issuers on Form 
S–3 to provide that a business development company 
that is a well-known seasoned issuer may file auto-
matic shelf offerings on Form N–2. 
(c) TREATMENT IF REVISIONS NOT COMPLETED IN 
TIMELY MANNER.—If the Commission fails to complete 
the revisions required by subsections (a) and (b) by the 
time required by such subsections, a business development 
company shall be entitled to treat such revisions as having 
been completed in accordance with the actions required to 
be taken by the Commission by such subsections until such 
time as such revisions are completed by the Commission. 
(d) RULE OF CONSTRUCTION.—Any reference in this 
section to a rule or form means such rule or form or any 
successor rule or form. 
Subtitle I—Fostering Innovation 
SEC. 1041. TEMPORARY EXEMPTION FOR LOW-REVENUE 
ISSUERS. 
Section 404 of the Sarbanes-Oxley Act of 2002 (15 
U.S.C. 7262) is amended by adding at the end the fol-
lowing: 
‘‘(d) TEMPORARY EXEMPTION FOR LOW-REVENUE 
ISSUERS.— 
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410 
‘‘(1) LOW-REVENUE
EXEMPTION.—Subsection 
(b) shall not apply with respect to an audit report 
prepared for an issuer that— 
‘‘(A) ceased to be an emerging growth 
company on the last day of the fiscal year of 
the issuer following the fifth anniversary of the 
date of the first sale of common equity securi-
ties of the issuer pursuant to an effective reg-
istration statement under the Securities Act of 
1933; 
‘‘(B) had average annual gross revenues of 
less than $50,000,000 as of its most recently 
completed fiscal year; and 
‘‘(C) is not a large accelerated filer. 
‘‘(2) EXPIRATION
OF
TEMPORARY
EXEMP-
TION.—An issuer ceases to be eligible for the exemp-
tion described under paragraph (1) at the earliest 
of— 
‘‘(A) the last day of the fiscal year of the 
issuer following the tenth anniversary of the 
date of the first sale of common equity securi-
ties of the issuer pursuant to an effective reg-
istration statement under the Securities Act of 
1933; 
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411 
‘‘(B) the last day of the fiscal year of the 
issuer during which the average annual gross 
revenues of the issuer exceed $50,000,000; or 
‘‘(C) the date on which the issuer becomes 
a large accelerated filer. 
‘‘(3) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) AVERAGE
ANNUAL
GROSS
REVE-
NUES.—The term ‘average annual gross reve-
nues’ means the total gross revenues of an 
issuer over its most recently completed three 
fiscal years divided by three. 
‘‘(B) EMERGING GROWTH COMPANY.—The 
term ‘emerging growth company’ has the mean-
ing given such term under section 3 of the Se-
curities Exchange Act of 1934 (15 U.S.C. 78c). 
‘‘(C) LARGE
ACCELERATED
FILER.—The 
term ‘large accelerated filer’ has the meaning 
given that term under section 240.12b–2 of title 
17, Code of Federal Regulations, or any suc-
cessor thereto.’’. 
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412 
Subtitle J—Small Business Capital 
Formation Enhancement 
SEC. 1046. ANNUAL REVIEW OF GOVERNMENT-BUSINESS 
FORUM ON CAPITAL FORMATION. 
Section 503 of the Small Business Investment Incen-
tive Act of 1980 (15 U.S.C. 80c–1) is amended by adding 
at the end the following: 
‘‘(e) The Commission shall— 
‘‘(1) review the findings and recommendations 
of the forum; and 
‘‘(2) each time the forum submits a finding or 
recommendation to the Commission, promptly issue 
a public statement— 
‘‘(A) assessing the finding or recommenda-
tion of the forum; and 
‘‘(B) disclosing the action, if any, the Com-
mission intends to take with respect to the find-
ing or recommendation.’’. 
Subtitle K—Helping Angels Lead 
Our Startups 
SEC. 1051. DEFINITION OF ANGEL INVESTOR GROUP. 
As used in this subtitle, the term ‘‘angel investor 
group’’ means any group that— 
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413 
(1) is composed of accredited investors inter-
ested in investing personal capital in early-stage 
companies; 
(2) holds regular meetings and has defined 
processes and procedures for making investment de-
cisions, either individually or among the membership 
of the group as a whole; and 
(3) is neither associated nor affiliated with bro-
kers, dealers, or investment advisers. 
SEC. 1052. CLARIFICATION OF GENERAL SOLICITATION. 
(a) IN GENERAL.—Not later than 6 months after the 
date of enactment of this Act, the Securities and Ex-
change Commission shall revise Regulation D of its rules 
(17 C.F.R. 230.500 et seq.) to require that in carrying 
out the prohibition against general solicitation or general 
advertising contained in section 230.502(c) of title 17, 
Code of Federal Regulations, the prohibition shall not 
apply to a presentation or other communication made by 
or on behalf of an issuer which is made at an event— 
(1) sponsored by— 
(A) the United States or any territory 
thereof, by the District of Columbia, by any 
State, by a political subdivision of any State or 
territory, or by any agency or public instrumen-
tality of any of the foregoing; 
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414 
(B) a college, university, or other institu-
tion of higher education; 
(C) a nonprofit organization; 
(D) an angel investor group; 
(E) a venture forum, venture capital asso-
ciation, or trade association; or 
(F) any other group, person or entity as 
the Securities and Exchange Commission may 
determine by rule; 
(2) where any advertising for the event does not 
reference any specific offering of securities by the 
issuer; 
(3) the sponsor of which— 
(A) 
does 
not 
make 
investment 
rec-
ommendations or provide investment advice to 
event attendees; 
(B) does not engage in an active role in 
any investment negotiations between the issuer 
and investors attending the event; 
(C) does not charge event attendees any 
fees other than administrative fees; and 
(D) does not receive any compensation 
with respect to such event that would require 
registration of the sponsor as a broker or a 
dealer under the Securities Exchange Act of 
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415 
1934, or as an investment advisor under the In-
vestment Advisers Act of 1940; and 
(4) where no specific information regarding an 
offering of securities by the issuer is communicated 
or distributed by or on behalf of the issuer, other 
than— 
(A) that the issuer is in the process of of-
fering securities or planning to offer securities; 
(B) the type and amount of securities 
being offered; 
(C) the amount of securities being offered 
that have already been subscribed for; and 
(D) the intended use of proceeds of the of-
fering. 
(b) RULE OF CONSTRUCTION.—Subsection (a) may 
only be construed as requiring the Securities and Ex-
change Commission to amend the requirements of Regula-
tion D with respect to presentations and communications, 
and not with respect to purchases or sales. 
Subtitle L—Main Street Growth 
SEC. 1056. VENTURE EXCHANGES. 
(a) SECURITIES EXCHANGE ACT OF 1934.—Section 
6 of the Securities Exchange Act of 1934 (15 U.S.C. 78f) 
is amended by adding at the end the following: 
‘‘(m) VENTURE EXCHANGE.— 
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416 
‘‘(1) REGISTRATION.— 
‘‘(A) IN GENERAL.—A national securities 
exchange may elect to be treated (or for a list-
ing tier of such exchange to be treated) as a 
venture exchange by notifying the Commission 
of such election, either at the time the exchange 
applies to be registered as a national securities 
exchange or after registering as a national secu-
rities exchange. 
‘‘(B) DETERMINATION
TIME
PERIOD.— 
With respect to a securities exchange electing to 
be treated (or for a listing tier of such exchange 
to be treated) as a venture exchange— 
‘‘(i) at the time the exchange applies 
to be registered as a national securities ex-
change, such application and election shall 
be deemed to have been approved by the 
Commission unless the Commission denies 
such application before the end of the 6- 
month period beginning on the date the 
Commission received such application; and 
‘‘(ii) after registering as a national se-
curities exchange, such election shall be 
deemed to have been approved by the Com-
mission unless the Commission denies such 
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417 
approval before the end of the 6-month pe-
riod beginning on the date the Commission 
received notification of such election. 
‘‘(2) POWERS AND RESTRICTIONS.—A venture 
exchange— 
‘‘(A) may only constitute, maintain, or pro-
vide a market place or facilities for bringing to-
gether purchasers and sellers of venture securi-
ties; 
‘‘(B) may determine the increment to be 
used for quoting and trading venture securities 
on the exchange; 
‘‘(C) shall disseminate last sale and 
quotation information on terms that are fair 
and reasonable and not unreasonably discrimi-
natory; 
‘‘(D) may choose to carry out periodic auc-
tions for the sale of a venture security instead 
of providing continuous trading of the venture 
security; and 
‘‘(E) may not extend unlisted trading 
privileges to any venture security. 
‘‘(3) EXEMPTIONS
FROM
CERTAIN
NATIONAL 
SECURITY EXCHANGE REGULATIONS.—A venture ex-
change shall not be required to— 
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418 
‘‘(A) comply with any of sections 242.600 
through 242.612 of title 17, Code of Federal 
Regulations; 
‘‘(B) comply with any of sections 242.300 
through 242.303 of title 17, Code of Federal 
Regulations; 
‘‘(C) submit any data to a securities infor-
mation processor; or 
‘‘(D) use decimal pricing. 
‘‘(4) TREATMENT OF CERTAIN EXEMPTED SE-
CURITIES.—A security that is exempt from registra-
tion pursuant to section 3(b) of the Securities Act 
of 1933 shall be exempt from section 12(a) of this 
title with respect to the trading of such security on 
a venture exchange, if the issuer of such security is 
in compliance with all disclosure obligations of such 
section 3(b) and the regulations issued under such 
section. 
‘‘(5) DEFINITIONS.—For purposes of this sub-
section: 
‘‘(A) EARLY-STAGE, GROWTH COMPANY.— 
‘‘(i) IN GENERAL.—The term ‘early- 
stage, growth company’ means an issuer— 
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‘‘(I) that has not made an initial 
public offering of any securities of the 
issuer; and 
‘‘(II) with a market capitalization 
of $1,000,000,000 (as such amount is 
indexed for inflation every 5 years by 
the Commission to reflect the change 
in the Consumer Price Index for All 
Urban Consumers published by the 
Bureau of Labor Statistics, setting 
the 
threshold 
to 
the 
nearest 
$1,000,000) or less. 
‘‘(ii) TREATMENT
WHEN
MARKET 
CAPITALIZATION EXCEEDS THRESHOLD.— 
‘‘(I) IN GENERAL.—In the case 
of an issuer that is an early-stage, 
growth company the securities of 
which are traded on a venture ex-
change, such issuer shall not cease to 
be an early-stage, growth company by 
reason of the market capitalization of 
such issuer exceeding the threshold 
specified in clause (i)(II) until the end 
of the period of 24 consecutive 
months during which the market cap-
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italization of such issuer exceeds 
$2,000,000,000 (as such amount is 
indexed for inflation every 5 years by 
the Commission to reflect the change 
in the Consumer Price Index for All 
Urban Consumers published by the 
Bureau of Labor Statistics, setting 
the 
threshold 
to 
the 
nearest 
$1,000,000). 
‘‘(II) EXEMPTIONS.—If an issuer 
would cease to be an early-stage, 
growth company under subclause (I), 
the venture exchange may, at the re-
quest of the issuer, exempt the issuer 
from the market capitalization re-
quirements of this subparagraph for 
the 1-year period that begins on the 
day after the end of the 24-month pe-
riod described in such subclause. The 
venture exchange may, at the request 
of the issuer, extend the exemption for 
1 additional year. 
‘‘(B) 
VENTURE
SECURITY.—The 
term 
‘venture security’ means— 
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