,,ib ,union ,calendar ,no4 #bdc #aacth ,,congress #b;d ,session ,h4 ,r4 #bbgd ,report ,no4 #aac-cbf ,,in ,,the ,,house ,,of ,,representatives ,june #f1 #bjac ,mr4 ,huizenga of ,michigan 7for himself1 ,mr4 ,higgins1 and ,mr4 ,posey7 introduced the following bill2 which was referred to the ,committee on ,financial ,services ,january #ad1 #bjad ,additional sponsors3 ,mr4 ,heck of ,nevada1 ,mr4 ,schweikert1 ,mr4 ,fincher1 ,mr4 ,ross1 ,mr4 ,mc,henry1 ,mr4 ,lucas1 and ,ms4 ,lofgren ,january #ad1 #bjad ,reported with amendments1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed ,strike out all after the enacting clause and insert the part printed in italic ,for text of introduced bill1 see copy of bill as introduced on ,june #f1 #bjac ,a ,,bill ,to amend the ,securities ,exchange ,act of #aicd to provide for a notice-filing registration procedure for brokers performing services in connection with the transfer of ownership of smaller privately held companies and to provide for regulation appropriate to the limited scope of the activities of such brokers4 #a4 ,short title ,this ,act may be cited as the ,small ,business ,mergers1 ,acquisitions1 ,sales1 and ,brokerage ,simplification ,act of #bjac4 #b4 ,registration exemption for merger and acquisition brokers ,section #ae7;b7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gho7b77 is amended by adding at the end the following3 7#ac7 ,registration exemption for merger and acquisition brokers 7,a7 ,in general ,except as provided in subparagraph 7,b71 an ,m,a broker and any person associated with an ,m,a broker shall be exempt from registration under this section4 7,b7 ,excluded activities ,an ,m,a broker or a person associated with an ,m,a broker is not exempt from registration under this paragraph if such broker or associated person does any of the following3 7i7 ,directly or indirectly1 in connection with the transfer of ownership of an eligible privately held company1 receives1 holds1 transmits1 or has custody of the funds or securities to be exchanged by the parties to the transaction4 7ii7 ,engages on behalf of an issuer in a public offering of any class of securities that is registered1 or is required to be registered1 with the ,commission under section #ab or with respect to which the issuer files1 or is required to file1 periodic information1 documents1 and reports under subsection 7d74 7,c7 ,rule of construction ,nothing in this paragraph shall be construed to limit any other authority of the ,commission to exempt any person1 or any class of persons1 from any provision of this title1 or from any provision of any rule or regulation thereunder4 7,d7 ,definitions ,in this paragraph3 7i7 ,control ,the term control means the power1 directly or indirectly1 to direct the management or policies of a company1 whether through ownership of securities1 by contract1 or otherwise4 ,there is a presumption of control for any person who-- 7,i7 is a director1 general partner1 member or manager of a limited liability company1 or officer exercising executive responsibility 7or has similar status or functions72 7,,ii7 has the right to vote #bj percent or more of a class of voting securities or the power to sell or direct the sale of #bj percent or more of a class of voting securities2 or 7,,iii7 in the case of a partnership or limited liability company1 has the right to receive upon dissolution1 or has contributed1 #bj percent or more of the capital4 7ii7 ,eligible privately held company ,the term eligible privately held company means a company that meets both of the following conditions3 7,i7 ,the company does not have any class of securities registered1 or required to be registered1 with the ,commission under section #ab or with respect to which the company files1 or is required to file1 periodic information1 documents1 and reports under subsection 7d74 7,,ii7 ,in the fiscal year ending immediately before the fiscal year in which the services of the ,m,a broker are initially engaged with respect to the securities transaction1 the company meets either or both of the following conditions 7determined in accordance with the historical financial accounting records of the company73 7aa7 ,the earnings of the company before interest1 taxes1 depreciation1 and amortization are less than #be1jjj1jjj4 7bb7 ,the gross revenues of the company are less than #bej1jjj1jjj4 7iii7 ,m,a broker ,the term ,m,a broker means a broker engaged in the business of effecting securities transactions solely in connection with the transfer of ownership of an eligible privately held company1 regardless of whether the broker acts on behalf of a seller or buyer1 through the purchase1 sale1 exchange1 issuance1 repurchase1 or redemption of1 or a business combination involving1 securities or assets of the eligible privately held company1 if the broker reasonably believes that-- 7,i7 upon consummation of the transaction1 any person acquiring securities or assets of the eligible privately held company1 acting alone or in concert1 will control and1 directly or indirectly1 will be active in the management of the eligible privately held company or the business conducted with the assets of the eligible privately held company2 and 7,,ii7 if any person is offered securities in exchange for securities or assets of the eligible privately held company1 such person will1 prior to becoming legally bound to consummate the transaction1 receive or have reasonable access to the most recent year-end balance sheet1 income statement1 statement of changes in financial position1 and statement of owner's equity of the issuer of the securities offered in exchange1 and1 if the financial statements of the issuer are audited1 the related report of the independent auditor1 a balance sheet dated not more than #abj days before the date of the offer1 and information pertaining to the management1 business1 results of operations for the period covered by the foregoing financial statements1 and material loss contingencies of the issuer4 7,e7 ,inflation adjustment 7i7 ,in general ,on the date that is #e years after the date of the enactment of the ,small ,business ,mergers1 ,acquisitions1 ,sales1 and ,brokerage ,simplification ,act of #bjac1 and every #e years thereafter1 each dollar amount in subparagraph 7,d77ii77,,ii7 shall be adjusted by-- 7,i7 dividing the annual value of the ,employment ,cost ,index ,for ,wages and ,salaries1 ,private ,industry ,workers 7or any successor index71 as published by the ,bureau of ,labor ,statistics1 for the calendar year preceding the calendar year in which the adjustment is being made by the annual value of such index 7or successor7 for the calendar year ending ,december #ca1 #bjab2 and 7,,ii7 multiplying such dollar amount by the quotient obtained under subclause 7,i74 7ii7 ,rounding ,each dollar amount determined under clause 7i7 shall be rounded to the nearest multiple of #ajj1jjj4 4 #c4 ,effective date ,this ,act and any amendment made by this ,act shall take effect on the date that is #ij days after the date of the enactment of this ,act4 ,amend the title so as to read3 ,a bill to amend the ,securities ,exchange ,act of #aicd to exempt from registration brokers performing services in connection with the transfer of ownership of smaller privately held companies44 ,january #ad1 #bjad ,reported with amendments1 committed to the ,committee of the ,whole ,house on the ,state of the ,union1 and ordered to be printed