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H.R. 1070 (112th): Small Company Capital Formation Act of 2011

The text of the bill below is as of Mar 14, 2011 (Introduced).


I

112th CONGRESS

1st Session

H. R. 1070

IN THE HOUSE OF REPRESENTATIVES

March 14, 2011

(for himself, Mr. Garrett, Mr. Westmoreland, Mr. Jones, and Mrs. Biggert) introduced the following bill; which was referred to the Committee on Financial Services

A BILL

To amend the Securities Act of 1933 to authorize the Securities and Exchange Commission to exempt a certain class of securities from such Act.

1.

Short title

This Act may be cited as the Small Company Capital Formation Act of 2011.

2.

Authority to exempt certain securities

Section 3(b) of the Securities Act of 1933 (15 U.S.C. 77c(b)) is amended—

(1)

by striking (b) The Commission and inserting the following:

(b)

Additional exemptions

(1)

In general

The Commission

;

(2)

by inserting , except as provided in paragraph (2) after but; and

(3)

by adding at the end the following:

(2)

Exception

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:

(A)

The aggregate offering amount 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 issuer may solicit interest in the offering prior to filing any offering statement, on such terms and conditions as the Commission may prescribe.

(E)

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—

(i)

requiring the issuer to file audited financial statements with the Commission and distribute such statements to prospective investors;

(ii)

requiring the issuer to submit its offering statement and related filings to the Commission electronically; and

(iii)

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.

(3)

Periodic disclosures

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.

(4)

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 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.

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