H. R. 1070
IN THE HOUSE OF REPRESENTATIVES
March 14, 2011
Mr. Schweikert (for himself, Mr. Garrett, Mr. Westmoreland, Mr. Jones, and Mrs. Biggert) introduced the following bill; which was referred to the Committee on Financial Services
To amend the Securities Act of 1933 to authorize the Securities and Exchange Commission to exempt a certain class of securities from such Act.
This Act may be cited as the
Small Company Capital Formation Act of
Authority to exempt certain securities
Section 3(b) of the Securities Act of 1933 (15 U.S.C. 77c(b)) is amended—
(b) The Commission and inserting the following:
, except as provided in paragraph (2) after
by adding at the end the following:
The Commission shall by rule or regulation exempt a class of securities pursuant to paragraph (1) for which the aggregate offering amount exceeds $5,000,000 in accordance with the following terms and conditions:
The aggregate offering amount shall not exceed $50,000,000.
The securities may be offered and sold publicly.
The securities shall not be restricted securities within the meaning of the Federal securities laws and the regulations promulgated thereunder.
The issuer may solicit interest in the offering prior to filing any offering statement, on such terms and conditions as the Commission may prescribe.
Such other terms, conditions, or requirements as the Commission may determine necessary in the public interest and for the protection of investors, including, but not limited to—
requiring the issuer to file audited financial statements with the Commission and distribute such statements to prospective investors;
requiring the issuer to submit its offering statement and related filings to the Commission electronically; and
establishing disqualification provisions under which the exemption shall not be available based upon the disciplinary history of the issuer or its predecessors, affiliates, officers, directors, underwriters, or other related persons.
Upon such terms and conditions 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 securities exempted under paragraph (2) to make available to investors periodic disclosures regarding the issuer, its business operations, its financial condition, its use of investor funds, and other appropriate matters, and also may provide for the suspension and termination of such a requirement with respect to that issuer.
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 determines 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 of the Senate on its reasons for not increasing the amount.