documents, in such form and with such 
content as prescribed by the Commission, 
including audited financial statements, a 
description of the issuer’s business oper-
ations, its financial condition, its corporate 
governance principles, its use of investor 
funds, and other appropriate matters; and 
‘‘(ii) disqualification provisions under 
which the exemption shall not be available 
to the issuer or its predecessors, affiliates, 
officers, directors, underwriters, or other 
related persons, which shall be substan-
tially similar to the disqualification provi-
sions contained in the regulations adopted 
in accordance with section 926 of the 
Dodd-Frank Wall Street Reform and Con-
sumer Protection Act (15 U.S.C. 77d 
note). 
‘‘(3) LIMITATION.—Only the following types of 
securities may be exempted under a rule or regula-
tion adopted pursuant to paragraph (2): equity secu-
rities, debt securities, and debt securities convertible 
or exchangeable to equity interests, including any 
guarantees of such securities.
‘‘(4) 
PERIODIC
DISCLOSURES.—Upon 
such 
terms and conditions as the Commission determines 
necessary in the public interest and for the protec-
tion of investors, the Commission by rule or regula-
tion may require an issuer of a class of securities ex-
empted under paragraph (2) to make available to in-
vestors and file with the Commission periodic disclo-
sures regarding the issuer, its business operations, 
its financial condition, its corporate governance prin-
ciples, its use of investor funds, and other appro-
priate matters, and also may provide for the suspen-
sion and termination of such a requirement with re-
spect to that issuer. 
‘‘(5) ADJUSTMENT.—Not later than 2 years 
after the date of enactment of the Small Company 
Capital Formation Act of 2011 and every 2 years 
thereafter, the Commission shall review the offering 
amount limitation described in paragraph (2)(A) and 
shall increase such amount as the Commission deter-
mines appropriate. If the Commission determines 
not to increase such amount, it shall report to the 
Committee on Financial Services of the House of 
Representatives and the Committee on Banking, 
Housing, and Urban Affairs of the Senate on its 
reasons for not increasing the amount.’’.
(b) TREATMENT AS COVERED SECURITIES FOR PUR-
POSES OF NSMIA.—Section 18(b)(4) of the Securities 
Act of 1933 (as amended by section 303) (15 U.S.C. 
77r(b)(4)) is further amended by inserting after subpara-
graph (C) (as added by such section) the following: 
‘‘(D) a rule or regulation adopted pursuant 
to section 3(b)(2) and such security is— 
‘‘(i) offered or sold on a national secu-
rities exchange; or 
‘‘(ii) offered or sold to a qualified pur-
chaser, as defined by the Commission pur-
suant to paragraph (3) with respect to that 
purchase or sale;’’. 
(c) CONFORMING AMENDMENT.—Section 4(5) of the 
Securities Act of 1933 is amended by striking ‘‘section 
3(b)’’ and inserting ‘‘section 3(b)(1)’’. 
SEC. 402. STUDY ON THE IMPACT OF STATE BLUE SKY 
LAWS ON REGULATION A OFFERINGS. 
The Comptroller General shall conduct a study on the 
impact of State laws regulating securities offerings, or 
‘‘Blue Sky laws’’, on offerings made under Regulation A 
(17 CFR 230.251 et seq.). The Comptroller General shall 
transmit a report on the findings of the study to the Com-
mittee on Financial Services of the House of Representa-
tives, and the Committee on Banking, Housing, and
Urban Affairs of the Senate not later than 3 months after 
the date of enactment of this Act. 
TITLE V—PRIVATE COMPANY 
FLEXIBILITY AND GROWTH 
SEC. 501. THRESHOLD FOR REGISTRATION. 
Section 12(g)(1)(A) of the Securities Exchange Act 
of 1934 (15 U.S.C. 78l(g)(1)(A)) is amended to read as 
follows: 
‘‘(A) 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 than an exempted security) held of 
record by either— 
‘‘(i) 2,000 persons, or 
‘‘(ii) 500 persons who are not accredited inves-
tors (as such term is defined by the Commission), 
and’’. 
SEC. 502. EMPLOYEES. 
Section 12(g)(5) of the Securities Exchange Act of 
1934 (15 U.S.C. 78l(g)(5)), as amended by section 302, 
is amended in subparagraph (A) by adding at the end the 
following: ‘‘For purposes of determining whether an issuer 
is required to register a security with the Commission pur-
suant 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 require-
ments of section 5 of the Securities Act of 1933.’’. 
SEC. 503. 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 502. The Commission shall also adopt safe harbor 
provisions that issuers can follow when determining 
whether 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. 
SEC. 504. COMMISSION STUDY OF ENFORCEMENT AUTHOR-
ITY UNDER RULE 12G5–1. 
The Securities and Exchange Commission shall ex-
amine its authority to enforce Rule 12g5–1 to determine 
if new enforcement tools are needed to enforce the anti- 
evasion provision contained in subsection (b)(3) of the 
rule, and shall, not later than 120 days after the date of 
enactment of this Act transmit its recommendations to 
Congress.