H. R. 3606—19 
‘‘(1) SMALL ISSUES EXEMPTIVE AUTHORITY.—The Commis-
sion’’; and 
(2) by adding at the end the following: 
‘‘(2) ADDITIONAL ISSUES.—The Commission shall by rule 
or regulation add a class of securities to the securities exempted 
pursuant to this section in accordance with the following terms 
and conditions: 
‘‘(A) The aggregate offering amount of all securities 
offered and sold within the prior 12-month period in reli-
ance on the exemption added in accordance with this para-
graph shall not exceed $50,000,000. 
‘‘(B) The securities may be offered and sold publicly. 
‘‘(C) The securities shall not be restricted securities 
within the meaning of the Federal securities laws and 
the regulations promulgated thereunder. 
‘‘(D) The civil liability provision in section 12(a)(2) shall 
apply to any person offering or selling such securities. 
‘‘(E) The issuer may solicit interest in the offering 
prior to filing any offering statement, on such terms and 
conditions as the Commission may prescribe in the public 
interest or for the protection of investors. 
‘‘(F) The Commission shall require the issuer to file 
audited 
financial 
statements 
with 
the 
Commission 
annually. 
‘‘(G) Such other terms, conditions, or requirements as 
the Commission may determine necessary in the public 
interest and for the protection of investors, which may 
include— 
‘‘(i) a requirement that the issuer prepare and 
electronically file with the Commission and distribute 
to prospective investors an offering statement, and any 
related documents, in such form and with such content 
as prescribed by the Commission, including audited 
financial statements, a description of the issuer’s busi-
ness operations, 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, under-
writers, or other related persons, which shall be 
substantially similar to the disqualification provisions 
contained in the regulations adopted in accordance 
with section 926 of the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (15 U.S.C. 77d note). 
‘‘(3) LIMITATION.—Only the following types of securities 
may be exempted under a rule or regulation adopted pursuant 
to paragraph (2): equity securities, debt securities, and debt 
securities convertible or exchangeable to equity interests, 
including any guarantees of such securities. 
‘‘(4) PERIODIC DISCLOSURES.—Upon such terms and condi-
tions as the Commission determines necessary in the public 
interest and for the protection of investors, the Commission 
by rule or regulation may require an issuer of a class of securi-
ties exempted under paragraph (2) to make available to inves-
tors and file with the Commission periodic disclosures regarding 
the issuer, its business operations, its financial condition, its
H. R. 3606—20 
corporate governance principles, its use of investor funds, and 
other appropriate matters, and also may provide for the suspen-
sion and termination of such a requirement with respect 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 PURPOSES
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 subparagraph (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 securities 
exchange; or 
‘‘(ii) offered or sold to a qualified purchaser, as 
defined by the Commission pursuant 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 REGU-
LATION 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 Committee on Financial Services of the House 
of Representatives, 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 investors (as such 
term is defined by the Commission), and’’.
H. R. 3606—21 
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 subpara-
graph (A) 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. 503. COMMISSION RULEMAKING. 
The Securities and Exchange Commission shall revise the defi-
nition of ‘‘held of record’’ pursuant to section 12(g)(5) of the Securi-
ties 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 transactions that were exempt 
from the registration requirements of section 5 of the Securities 
Act of 1933. 
SEC. 504. COMMISSION STUDY OF ENFORCEMENT AUTHORITY UNDER 
RULE 12G5–1. 
The Securities and Exchange Commission shall examine 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. 
TITLE VI—CAPITAL EXPANSION 
SEC. 601. SHAREHOLDER THRESHOLD FOR REGISTRATION. 
(a) AMENDMENTS TO SECTION 12 OF THE SECURITIES EXCHANGE 
ACT
OF 1934.—Section 12(g) of the Securities Exchange Act of 
1934 (15 U.S.C. 78l(g)) is further amended— 
(1) in paragraph (1), by amending subparagraph (B) to 
read as follows: 
‘‘(B) in the case of an issuer that is a bank or a bank 
holding company, as such term is defined in section 2 of the 
Bank Holding Company Act of 1956 (12 U.S.C. 1841), not 
later than 120 days after the last day of its first fiscal year 
ended after the effective date of this subsection, 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 2,000 or more persons,’’; and 
(2) in paragraph (4), by striking ‘‘three hundred’’ and 
inserting ‘‘300 persons, or, in the case of a bank or a bank 
holding company, as such term is defined in section 2 of the 
Bank Holding Company Act of 1956 (12 U.S.C. 1841), 1,200 
persons’’. 
(b) AMENDMENTS TO SECTION 15 OF THE SECURITIES EXCHANGE 
ACT
OF 1934.—Section 15(d) of the Securities Exchange Act of 
1934 (15 U.S.C. 78o(d)) is amended, in the third sentence, by 
striking ‘‘three hundred’’ and inserting ‘‘300 persons, or, in the 
case of bank or a bank holding company, as such term is defined
H. R. 3606—22 
in section 2 of the Bank Holding Company Act of 1956 (12 U.S.C. 
1841), 1,200 persons’’. 
SEC. 602. RULEMAKING. 
Not later than 1 year after the date of enactment of this 
Act, the Securities and Exchange Commission shall issue final 
regulations to implement this title and the amendments made 
by this title. 
TITLE VII—OUTREACH ON CHANGES TO 
THE LAW 
SEC. 701. OUTREACH BY THE COMMISSION. 
The Securities and Exchange Commission shall provide online 
information and conduct outreach to inform small and medium 
sized businesses, women owned businesses, veteran owned 
businesses, and minority owned businesses of the changes made 
by this Act. 
Speaker of the House of Representatives. 
Vice President of the United States and
President of the Senate.