pany, the securities of such issuer shall be 
quoted at the increment at which such securi-
ties would be quoted without regard to the min-
imum increments established under this para-
graph. 
‘‘(ii) EXCEPTIONS.—The Commission may 
by regulation, as the Commission considers ap-
propriate, specify any circumstances under 
which an issuer shall continue to be considered 
a covered emerging growth company for pur-
poses of this paragraph after the issuer ceases 
to meet the requirements of subparagraph 
(L)(i). 
‘‘(F) SECURITIES TRADING BELOW $1.— 
‘‘(i) INITIAL PRICE.— 
‘‘(I) AT
EFFECTIVE
DATE.—If the 
trading price of the securities of a covered 
emerging growth company is below $1 at 
the close of the last trading day before the 
date that is 90 days after the date of the 
enactment of the Small Cap Liquidity Re-
form Act of 2014, the securities of such 
company shall be quoted using the incre-
ment at which such securities would be
quoted without regard to the minimum in-
crements established under this paragraph. 
‘‘(II) AT IPO.—If a covered emerging 
growth company makes an initial public of-
fering after the day described in subclause 
(I) and the first share of the securities of 
such company is offered to the public at a 
price below $1, the securities of such com-
pany shall be quoted using the increment 
at which such securities would be quoted 
without regard to the minimum increments 
established under this paragraph. 
‘‘(ii) AVERAGE TRADING PRICE.—If the av-
erage trading price of the securities of a cov-
ered emerging growth company falls below $1 
for any 90-day period beginning on or after the 
day before the date of the enactment of the 
Small Cap Liquidity Reform Act of 2014, the 
securities of such company shall, after the end 
of such period, be quoted using the increment 
at which such securities would be quoted with-
out regard to the minimum increments estab-
lished under this paragraph. 
‘‘(G) FRAUD OR MANIPULATION.—If the Com-
mission determines that a covered emerging growth
company has violated any provision of the securities 
laws prohibiting fraudulent, manipulative, or decep-
tive acts or practices, the securities of such company 
shall, after the date of the determination, be quoted 
using the increment at which such securities would 
be quoted without regard to the minimum incre-
ments established under this paragraph. 
‘‘(H) INELIGIBILITY FOR INCREASED MINIMUM 
INCREMENT
PERMANENT.—The securities of an 
issuer may not be quoted at a minimum increment 
of $0.05 or $0.10 under this paragraph at any time 
after— 
‘‘(i) such issuer makes an election under 
subparagraph (A)(ii)(II); 
‘‘(ii) such issuer makes an election under 
subparagraph (C)(i)(I), except during the pe-
riod before such election takes effect; or 
‘‘(iii) the securities of such issuer are re-
quired by this paragraph to be quoted using the 
increment at which such securities would be 
quoted without regard to the minimum incre-
ments established under this paragraph. 
‘‘(I) 
ADDITIONAL
REPORTS
AND
DISCLO-
SURES.—The Commission shall require a covered 
emerging growth company the securities of which
are quoted at a minimum increment of $0.05 or 
$0.10 under this paragraph to make such reports 
and disclosures as the Commission considers nec-
essary or appropriate in the public interest or for 
the protection of investors. 
‘‘(J) LIMITATION OF LIABILITY.—An issuer (or 
any officer, director, manager, or other agent of 
such issuer) shall not be liable to any person (other 
than such issuer) under any law or regulation of the 
United States, any constitution, law, or regulation of 
any State or political subdivision thereof, or any con-
tract or other legally enforceable agreement (includ-
ing any arbitration agreement) for any losses caused 
solely by the quoting of the securities of such issuer 
at a minimum increment of $0.05 or $0.10, by the 
trading of such securities at the increment deter-
mined by the Commission under subparagraph (B), 
or by both such quoting and trading, as provided in 
this paragraph. 
‘‘(K) REPORT TO CONGRESS.—Not later than 6 
months after the date of the enactment of the Small 
Cap Liquidity Reform Act of 2014, and every 6 
months thereafter, the Commission, in coordination 
with each exchange on which the securities of cov-
ered emerging growth companies are quoted or trad-
ed, shall submit to Congress a report on the quoting 
and trading of securities in increments permitted by 
this paragraph and the extent to which such quoting 
and trading are increasing liquidity and active trad-
ing by incentivizing capital commitment, research 
coverage, and brokerage support, together with any 
legislative recommendations the Commission may 
have. 
‘‘(L) DEFINITIONS.—In this paragraph: 
‘‘(i) COVERED
EMERGING
GROWTH
COM-
PANY.—The term ‘covered emerging growth 
company’ means an emerging growth company, 
as defined in the first paragraph (80) of section 
3(a), except that— 
‘‘(I) such paragraph shall be applied 
by 
substituting 
‘$750,000,000’ 
for 
‘$1,000,000,000’ each place it appears; 
and 
‘‘(II) subparagraphs (B), (C), and (D) 
of such paragraph do not apply. 
‘‘(ii) 
SECURITY.—The 
term 
‘security’ 
means an equity security. 
‘‘(M) SAVINGS
PROVISION.—Notwithstanding 
any other provision of this paragraph, the Commis-
sion may—
‘‘(i) make such adjustments to the pilot 
program specified in this paragraph as the 
Commission considers necessary or appropriate 
to ensure that such program can provide statis-
tically meaningful or reliable results, including 
adjustments to eliminate selection bias among 
participants, expand the number of participants 
eligible to participate in such program, and 
change the duration of such program for one or 
more participants; and 
‘‘(ii) conduct any other study or pilot pro-
gram, in conjunction with or separate from the 
pilot program specified in this paragraph (as 
such program may be adjusted pursuant to 
clause (i)), to evaluate quoting or trading in 
various minimum increments.’’. 
(b) SUNSET.—Effective on the date that is 5 years 
after the date of the enactment of this Act, section 
11A(c)(6) of the Securities Exchange Act of 1934 (15 
U.S.C. 78k–1(c)(6)) is repealed.
TITLE VI—IMPROVING ACCESS 
TO CAPITAL FOR EMERGING 
GROWTH COMPANIES ACT 
SEC. 601. FILING REQUIREMENT FOR PUBLIC FILING 
PRIOR TO PUBLIC OFFERING. 
Section 6(e)(1) of the Securities Act of 1933 (15 
U.S.C. 77f(e)(1)) is amended by striking ‘‘21 days’’ and 
inserting ‘‘15 days’’. 
SEC. 602. GRACE PERIOD FOR CHANGE OF STATUS OF 
EMERGING GROWTH COMPANIES. 
Section 6(e)(1) of the Securities Act of 1933 (15 
U.S.C. 77f(e)(1)) is further amended by adding at the end 
the following: ‘‘An issuer that was an emerging growth 
company at the time it submitted a confidential registra-
tion statement or, in lieu thereof, a publicly filed registra-
tion statement for review under this subsection but ceases 
to be an emerging growth company thereafter shall con-
tinue to be treated as an emerging market growth com-
pany for the purposes of this subsection through the ear-
lier of the date on which the issuer consummates its initial 
public offering pursuant to such registrations statement 
or the end of the 1-year period beginning on the date the 
company ceases to be an emerging growth company.’’.
SEC. 603. SIMPLIFIED DISCLOSURE REQUIREMENTS FOR 
EMERGING GROWTH COMPANIES. 
Section 102 of the Jumpstart Our Business Startups 
Act (Public Law 112–106) is amended by adding at the 
end the following: 
‘‘(d) SIMPLIFIED DISCLOSURE REQUIREMENTS.— 
With respect to an emerging growth company (as such 
term is defined under section 2 of the Securities Act of 
1933): 
‘‘(1) REQUIREMENT TO INCLUDE NOTICE ON 
FORM S–1.—Not later than 30 days after the date 
of enactment of this subsection, the Securities and 
Exchange Commission shall revise its general in-
structions on Form S–1 to indicate that a registra-
tion statement filed (or submitted for confidential 
review) by an issuer prior to an initial public offer-
ing may omit financial information for historical pe-
riods otherwise required by regulation S–X (17 CFR 
210.1–01 et seq.) as of the time of filing (or con-
fidential submission) of such registration statement, 
provided that— 
‘‘(A) the omitted financial information re-
lates to a historical period that the issuer rea-
sonably believes will not be required to be in-
cluded in the Form S–1 at the time of the con-
templated offering; and
‘‘(B) prior to the issuer distributing a pre-
liminary prospectus to investors, such registra-
tion statement is amended to include all finan-
cial information required by such regulation S– 
X at the date of such amendment. 
‘‘(2) RELIANCE BY ISSUERS.—Effective 30 days 
after the date of enactment of this subsection, an 
issuer filing a registration statement (or submitting 
the statement for confidential review) on Form S– 
1 may omit financial information for historical peri-
ods otherwise required by regulation S–X (17 CFR 
210.1–01 et seq.) as of the time of filing (or con-
fidential submission) of such registration statement, 
provided that— 
‘‘(A) the omitted financial information re-
lates to a historical period that the issuer rea-
sonably believes will not be required to be in-
cluded in the Form S–1 at the time of the con-
templated offering; and 
‘‘(B) prior to the issuer distributing a pre-
liminary prospectus to investors, such registra-
tion statement is amended to include all finan-
cial information required by such regulation S– 
X at the date of such amendment.’’.
TITLE 
VII—SMALL 
COMPANY 
DISCLOSURE 
SIMPLIFICA-
TION ACT 
SEC. 701. EXEMPTION FROM XBRL REQUIREMENTS FOR 
EMERGING GROWTH COMPANIES AND OTHER 
SMALLER COMPANIES. 
(a) EXEMPTION FOR EMERGING GROWTH COMPA-
NIES.—Emerging growth companies are exempted from 
the requirements to use Extensible Business Reporting 
Language (XBRL) for financial statements and other 
periodic reporting required to be filed with the Commis-
sion under the securities laws. Such companies may elect 
to use XBRL for such reporting. 
(b) EXEMPTION
FOR
OTHER
SMALLER
COMPA-
NIES.—Issuers with total annual gross revenues of less 
than $250,000,000 are exempt from the requirements to 
use XBRL for financial statements and other periodic re-
porting required to be filed with the Commission under 
the securities laws. Such issuers may elect to use XBRL 
for such reporting. An exemption under this subsection 
shall continue in effect until— 
(1) the date that is five years after the date of 
enactment of this Act; or 
(2) the date that is two years after a deter-
mination by the Commission, by order after con-
ducting the analysis required by section 702, that 
the benefits of such requirements to such issuers 
outweigh the costs, but no earlier than three years 
after enactment of this Act. 
(c) MODIFICATIONS
TO REGULATIONS.—Not later 
than 60 days after the date of enactment of this Act, the 
Commission shall revise its regulations under parts 229, 
230, 232, 239, 240, and 249 of title 17, Code of Federal 
Regulations, to reflect the exemptions set forth in sub-
sections (a) and (b). 
SEC. 702. ANALYSIS BY THE SEC. 
The Commission shall conduct an analysis of the 
costs and benefits to issuers described in section 701(b) 
of the requirements to use XBRL for financial statements 
and other periodic reporting required to be filed with the 
Commission under the securities laws. Such analysis shall 
include an assessment of— 
(1) how such costs and benefits may differ from 
the costs and benefits identified by the Commission 
in the order relating to interactive data to improve 
financial reporting (dated January 30, 2009; 74 
Fed. Reg. 6776) because of the size of such issuers; 
(2) the effects on efficiency, competition, capital 
formation, and financing and on analyst coverage of
such issuers (including any such effects resulting 
from use of XBRL by investors); 
(3) the costs to such issuers of— 
(A) submitting data to the Commission in 
XBRL; 
(B) posting data on the website of the 
issuer in XBRL; 
(C) software necessary to prepare, submit, 
or post data in XBRL; and 
(D) any additional consulting services or 
filing agent services; 
(4) the benefits to the Commission in terms of 
improved ability to monitor securities markets, as-
sess the potential outcomes of regulatory alter-
natives, and enhance investor participation in cor-
porate governance and promote capital formation; 
and 
(5) the effectiveness of standards in the United 
States for interactive filing data relative to the 
standards of international counterparts. 
SEC. 703. REPORT TO CONGRESS. 
Not later than one year after the date of enactment 
of this Act, the Commission shall provide the Committee 
on Financial Services of the House of Representatives and
the Committee on Banking, Housing, and Urban Affairs 
of the Senate a report regarding— 
(1) the progress in implementing XBRL report-
ing within the Commission; 
(2) the use of XBRL data by Commission offi-
cials; 
(3) the use of XBRL data by investors; 
(4) the results of the analysis required by sec-
tion 702; and 
(5) any additional information the Commission 
considers relevant for increasing transparency, de-
creasing costs, and increasing efficiency of regu-
latory filings with the Commission. 
SEC. 704. DEFINITIONS. 
As used in this title, the terms ‘‘Commission’’, 
‘‘emerging growth company’’, ‘‘issuer’’, and ‘‘securities 
laws’’ have the meanings given such terms in section 3 
of the Securities Exchange Act of 1934 (15 U.S.C. 78c).
TITLE VIII—RESTORING PROVEN 
FINANCING FOR AMERICAN 
EMPLOYERS ACT 
SEC. 
801. 
RULES 
OF 
CONSTRUCTION 
RELATING 
TO 
COLLATERALIZED LOAN OBLIGATIONS. 
Section 13(g) of the Bank Holding Company Act of 
1956 (12 U.S.C. 1851(g)) is amended by adding at the 
end the following new paragraphs: 
‘‘(4) COLLATERALIZED LOAN OBLIGATIONS.— 
‘‘(A) 
INAPPLICABILITY
TO
CERTAIN 
COLLATERALIZED
LOAN
OBLIGATIONS.—Noth-
ing in this section shall be construed to require 
the divestiture, prior to July 21, 2017, of any 
debt securities of collateralized loan obligations, 
if such debt securities were issued before Janu-
ary 31, 2014. 
‘‘(B) OWNERSHIP
INTEREST
WITH
RE-
SPECT
TO
COLLATERALIZED
LOAN
OBLIGA-
TIONS.—A banking entity shall not be consid-
ered to have an ownership interest in a 
collateralized loan obligation because it ac-
quires, has acquired, or retains a debt security 
in such collateralized loan obligation if the debt 
security has no indicia of ownership other than 
the right of the banking entity to participate in
the removal for cause, or in the selection of a 
replacement after removal for cause or resigna-
tion, of an investment manager or investment 
adviser of the collateralized loan obligation. 
‘‘(C) DEFINITIONS.—For purposes of this 
paragraph: 
‘‘(i) COLLATERALIZED LOAN OBLIGA-
TION.—The term ‘collateralized loan obli-
gation’ means any issuing entity of an 
asset-backed security, as defined in section 
3(a)(77) of the Securities Exchange Act of 
1934 (15 U.S.C. 78c(a)(77)), that is com-
prised primarily of commercial loans. 
‘‘(ii) REMOVAL FOR CAUSE.—An in-
vestment manager or investment adviser 
shall be deemed to be removed ‘for cause’ 
if the investment manager or investment 
adviser is removed as a result of— 
‘‘(I) a breach of a material term 
of the applicable management or advi-
sory agreement or the agreement gov-
erning the collateralized loan obliga-
tion; 
‘‘(II) the inability of the invest-
ment manager or investment adviser
to continue to perform its obligations 
under any such agreement; 
‘‘(III) any other action or inac-
tion by the investment manager or in-
vestment adviser that has or could 
reasonably be expected to have a ma-
terially 
adverse 
effect 
on 
the 
collateralized loan obligation, if the in-
vestment manager or investment ad-
viser fails to cure or take reasonable 
steps to cure such effect within a rea-
sonable time; or 
‘‘(IV) a comparable event or cir-
cumstance that threatens, or could 
reasonably be expected to threaten, 
the interests of holders of the debt se-
curities.’’. 
TITLE IX—SBIC ADVISERS 
RELIEF ACT 
SEC. 901. ADVISERS OF SBICS AND VENTURE CAPITAL 
FUNDS. 
Section 203(l) of the Investment Advisers Act of 
1940 (15 U.S.C. 80b–3(l)) is amended— 
(1) by striking ‘‘No investment adviser’’ and in-
serting the following:
‘‘(1) IN
GENERAL.—No investment adviser’’; 
and 
(2) by adding at the end the following: 
‘‘(2) ADVISERS OF SBICS.—For purposes of this 
subsection, a venture capital fund includes an entity 
described in subparagraph (A), (B), or (C) of sub-
section (b)(7) (other than an entity that has elected 
to be regulated or is regulated as a business develop-
ment company pursuant to section 54 of the Invest-
ment Company Act of 1940).’’. 
SEC. 902. ADVISERS OF SBICS AND PRIVATE FUNDS. 
Section 203(m) of the Investment Advisers Act of 
1940 (15 U.S.C. 80b–3(m)) is amended by adding at the 
end the following: 
‘‘(3) ADVISERS OF SBICS.—For purposes of this 
subsection, the assets under management of a pri-
vate fund that is an entity described in subpara-
graph (A), (B), or (C) of subsection (b)(7) (other 
than an entity that has elected to be regulated or is 
regulated as a business development company pursu-
ant to section 54 of the Investment Company Act of 
1940) shall be excluded from the limit set forth in 
paragraph (1).’’.
SEC. 903. RELATIONSHIP TO STATE LAW. 
Section 203A(b)(1) of the Investment Advisers Act 
of 1940 (15 U.S.C. 80b–3a(b)(1)) is amended— 
(1) in subparagraph (A), by striking ‘‘or’’ at 
the end; 
(2) in subparagraph (B), by striking the period 
at the end and inserting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(C) that is not registered under section 
203 because that person is exempt from reg-
istration as provided in subsection (b)(7) of 
such section, or is a supervised person of such 
person.’’. 
TITLE 
X—DISCLOSURE 
MOD-
ERNIZATION 
AND 
SIM-
PLIFICATION ACT 
SEC. 1001. SUMMARY PAGE FOR FORM 10–K. 
Not later than the end of the 180-day period begin-
ning on the date of the enactment of this Act, the Securi-
ties and Exchange Commission shall issue regulations to 
permit issuers to submit a summary page on form 10– 
K (17 CFR 249.310), but only if each item on such sum-
mary page includes a cross-reference (by electronic link 
or otherwise) to the material contained in form 10–K to 
which such item relates.
SEC. 1002. IMPROVEMENT OF REGULATION S–K. 
Not later than the end of the 180-day period begin-
ning on the date of the enactment of this Act, the Securi-
ties and Exchange Commission shall take all such actions 
to revise regulation S–K (17 CFR 229.10 et seq.)— 
(1) to further scale or eliminate requirements of 
regulation S–K, in order to reduce the burden on 
emerging growth companies, accelerated filers, 
smaller reporting companies, and other smaller 
issuers, while still providing all material information 
to investors; 
(2) to eliminate provisions of regulation S–K, 
required for all issuers, that are duplicative, overlap-
ping, outdated, or unnecessary; and 
(3) for which the Commission determines that 
no further study under section 1003 is necessary to 
determine the efficacy of such revisions to regulation 
S–K. 
SEC. 1003. STUDY ON MODERNIZATION AND SIMPLIFICA-
TION OF REGULATION S–K. 
(a) STUDY.—The Securities and Exchange Commis-
sion shall carry out a study of the requirements contained 
in regulation S–K (17 CFR 229.10 et seq.). Such study 
shall— 
(1) determine how best to modernize and sim-
plify such requirements in a manner that reduces
the costs and burdens on issuers while still providing 
all material information; 
(2) emphasize a company by company approach 
that allows relevant and material information to be 
disseminated to investors without boilerplate lan-
guage or static requirements while preserving com-
pleteness and comparability of information across 
registrants; and 
(3) evaluate methods of information delivery 
and presentation and explore methods for discour-
aging repetition and the disclosure of immaterial in-
formation. 
(b) CONSULTATION.—In conducting the study re-
quired under subsection (a), the Commission shall consult 
with the Investor Advisory Committee and the Advisory 
Committee on Small and Emerging Companies. 
(c) REPORT.—Not later than the end of the 360-day 
period beginning on the date of enactment of this Act, the 
Commission shall issue a report to the Congress con-
taining— 
(1) all findings and determinations made in car-
rying out the study required under subsection (a); 
(2) specific and detailed recommendations on 
modernizing and simplifying the requirements in 
regulation S–K in a manner that reduces the costs
and burdens on companies while still providing all 
material information; and 
(3) specific and detailed recommendations on 
ways to improve the readability and navigability of 
disclosure documents and to discourage repetition 
and the disclosure of immaterial information. 
(d) RULEMAKING.—Not later than the end of the 
360-day period beginning on the date that the report is 
issued to the Congress under subsection (c), the Commis-
sion shall issue a proposed rule to implement the rec-
ommendations of the report issued under subsection (c). 
(e) RULE OF CONSTRUCTION.—Revisions made to 
regulation S–K by the Commission under section 1002 
shall not be construed as satisfying the rulemaking re-
quirements under this section. 
TITLE XI—ENCOURAGING 
EMPLOYEE OWNERSHIP ACT 
SEC. 1101. 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 
$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. 
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 
Wall Street Reform and Consumer Protection 
Act, to enhance the ability of small and emerging 
growth companies to access capital through pub-
lic and private markets, to reduce regulatory bur-
dens, and for other purposes.