H.R. 1965 (112th): To amend the securities laws to establish certain thresholds for shareholder registration, and for other purposes.

112th Congress, 2011–2013. Text as of May 24, 2011 (Introduced).

Status & Summary | PDF | Source: GPO

I

112th CONGRESS

1st Session

H. R. 1965

IN THE HOUSE OF REPRESENTATIVES

May 24, 2011

(for himself and Mr. Womack) introduced the following bill; which was referred to the Committee on Financial Services

A BILL

To amend the securities laws to establish certain thresholds for shareholder registration, and for other purposes.

1.

Shareholder registration threshold

(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. 781(g)) is amended—

(1)

in paragraph (1)—

(A)

by striking subparagraphs (A) and (B) and inserting the following:

(1)

in the case of an issuer that is a bank, as such term is defined in section 3(a)(6) of this title, 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), 2000 persons or more; and

(2)

in the case of an issuer that is not a bank or bank holding company, 500 persons or more,

; and

(B)

by striking commerce shall and inserting commerce shall, 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; and

(2)

in paragraph (4), by striking three hundred and inserting 300 persons, or, in the case of a bank, as such term is defined in section 3(a)(6), 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), 1200.

(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, as such term is defined in section 3(a)(6), 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), 1200.

2.

Study and report on registration thresholds

(a)

Study

(1)

Analysis required

The Chief Economist and Director of the Division of Corporation Finance of the Commission shall jointly conduct a study, including a cost-benefit analysis, of shareholder registration thresholds.

(2)

Costs and benefits

The cost-benefit analysis under paragraph (1) shall take into account—

(A)

the incremental benefits to investors of the increased disclosure that results from registration;

(B)

the incremental costs to issuers associated with registration and reporting requirements; and

(C)

the incremental administrative costs to the Commission associated with different thresholds.

(3)

Thresholds

The cost-benefit analysis under paragraph (1) shall evaluate whether it is advisable to—

(A)

increase the asset threshold;

(B)

index the asset threshold to a measure of inflation;

(C)

increase the shareholder threshold;

(D)

change the shareholder threshold to be based on the number of beneficial owners; and

(E)

create new thresholds based on other criteria.

(b)

Report

Not later than 2 years after the date of enactment of this Act, the Chief Economist and the Director of the Division of Corporation Finance of the Commission shall jointly submit to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives a report that includes—

(1)

the findings of the study required under subsection (a); and

(2)

recommendations for statutory changes to improve the shareholder registration thresholds.

3.

Rulemaking

Not later than one year after the date of enactment of this Act, the Commission shall issue final regulations to implement this Act and the amendments made by this Act.