,,ii  #aae? ,,congress  #b;d ,session   
,s4 #ceah  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,septemb] #bg1         
#bjah,mr4 ,pet]s 7= himself & ,mr4      
,k5n$y7 introduc$ ! foll[+ bill2 :i* 0  
read twice & ref]r$ to ! ,committee on  
,bank+1 ,h\s+1 & ,urban ,affairs  ,a    
,,bill  ,to am5d ! ,securities ,ex*ange 
,act ( #aicd to exempt f regi/ration    
brok]s p]=m+ s]vices 9 connection ) !   
transf] ( own]%ip ( small] privately    
held companies4  #a4 ,%ort title ,?is   
,act may be cit$ z ! ,small ,bus9ess    
,m]g]s1 ,acquisitions1 ,sales1 &        
,brok]age ,simplification ,act ( #bjah4 
#b4 ,regi/ration exemption = m]g] &     
acquisition brok]s ,section #ae7;b7 ( ! 
,securities ,ex*ange ,act ( #aicd 7#ae  
,u4,s4,c4 #gho7b77 is am5d$ by add+ at !
 end ! foll[+3  7#ac7 ,regi/ration      
exemption = m]g] & acquisition brok]s   
7,a7 ,def9itions ,9 ?is p>agraph3 7i7   
,bus9ess comb9ation relat$ %ell company 
,! t]m bus9ess comb9ation %ell company  
means a %ell company t is =m$ by an     

entity t is n a %ell company solely = ! 
purpose (--  7,i7 *ang+ ! corporate     
domicile ( t entity solely )9 ! ,unit$  
,/ates2 or  7,,ii7 complet+ a bus9ess   
comb9ation transaction 7z def9$ 9       
section #bcj4afe7;f7 ( title #ag1 ,code 
( ,f$]al ,regulations7 among #a or m    
entities o!r ?an ! company itself1 none 
( :i* is a %ell company4  7ii7 ,control 
7,i7 ,9 g5]al ,! t]m control means !    
p[]1 directly or indirectly1 to direct !
 managem5t or policies ( a company1 :e!r
 ?r\gh own]%ip ( securities1 by         
contract1 or o!rwise4  7,,ii7           
,presumption ,= ! purposes ( ?is clause1
 a p]son %all be presum$ to h control "u
 any ( ! foll[+ circum/ances3  7aa7 ,!  
p]son is a director1 g5]al p>tn]1 memb]1
 or manag] ( a limit$ liability company1
 or a corporate (fic] ( a corporation or
 limit$ liability company1 & ex]cises   
executive responsibility 7or has simil> 
/atus or functions74  7bb7 ,! p]son     
has-- 7,,aa7 ! "r to vote n less ?an #be
 p]c5t ( a class ( vot+ securities2 or  

7,,bb7 ! p[] to sell or direct ! sale ( 
n less ?an #be p]c5t ( a class ( vot+   
securities4  7cc7 ,9 ! case ( a p>tn]%ip
 or a limit$ liability company1 ! p]son 
has ! "r to receive ^u dissolution1 or  
has contribut$1 n less ?an #be p]c5t ( !
 capital4  7iii7 ,eligible privately    
held company  7,i7 ,9 g5]al ,! t]m      
eligible privately held company means a 
privately held company t-- 7aa7 does n h
 any class ( securities regi/]$1 or     
requir$ to be regi/]$1 ) ! ,commission  
"u section #ab or ) respect to :i* !    
company files1 or is requir$ to file1   
p]iodic in=mation1 docum5ts1 & reports  
"u subsection 7d72 &  7bb7 9 ! fiscal   
ye> end+ imm$iately be=e ! fiscal ye> 9 
:i* ! s]vices ( an ,m,a brok] are       
initially engag$ ) respect to a         
securities transaction1 ! company1 z    
det]m9$ 9 accordance ) ! hi/orical      
f9ancial acc\nt+ records ( ! company--  
7,,aa7 be=e int]e/1 taxes1 depreciation1
 & amortization1 has e>n+s 9 an am\nt t 
is less ?an #be1jjj1jjj2 or 7,,bb7 has  

gross rev5ues 9 an am\nt t is less ?an  
#bej1jjj1jjj4  7,,ii7 ,adju/m5t ( am\nts
 ,9 addition to ! adju/m5ts requir$ "u  
subp>agraph 7,f71 ! ,commission may1 by 
rule1 modify ! doll> am\nts describ$ 9  
subclause 7,i7 if ! ,commission det]m9es
 t su* a modification is necess>y or    
appropriate 9 ! public int]e/ or = !    
protection ( inve/ors4  7iv7 ,m,a brok] 
,! t]m ,m,a brok] means a brok]1 & any  
p]son associat$ ) a brok]1 t is engag$ 9
 ! bus9ess ( effect+ securities         
transactions solely 9 connection ) !    
transf] ( own]%ip ( an eligible         
privately held company1 reg>dless ( :e!r
 ! brok] acts on behalf ( a sell] or    
buy]1 ?r\gh ! pur*ase1 sale1 ex*ange1   
issuance1 repur*ase1 or r$emption (1 or 
a bus9ess comb9ation involv+1 securities
 or assets ( ! eligible privately held  
company1 if ! brok] reasonably believes 
t--  7,i7 ^u consummation ( !           
transaction1 any p]son acquir+          
securities or assets ( ! eligible       
privately held company1 act+ alone or 9 

conc]t1 w control &1 directly or        
indirectly1 w be active 9 ! managem5t   
(--  7aa7 ! eligible privately held     
company2 or  7bb7 ! bus9ess conduct$ ) !
 assets ( ! eligible privately held     
company2 &  7,,ii7 if any p]son is (f]$ 
securities 9 ex*ange = securities or    
assets ( ! eligible privately held      
company1 t p]son w1 be=e becom+ legally 
b\nd to consummate ! transaction1       
receive or h reasonable access to--     
7aa7 ! mo/ rec5t fiscal ye>-end f9ancial
 /atem5ts ( ! issu] ( ! securities1 z   
cu/om>ily prep>$ by ! managem5t ( !     
issu] 9 ! normal c\rse ( op]ations2 &   
7bb7 if ! f9ancial /atem5ts ( ! issu]   
are audit$1 review$1 or compil$-- 7,,aa7
 any relat$ /atem5t by ! indep5d5t      
acc\ntant2 7,,bb7 a balance %eet dat$ n 
m ?an #abj days be=e ! date ( ! (f]2 &  
7,,cc7 in=mation p]ta9+ to ! issu]'s    
managem5t1 bus9ess1 mat]ial loss        
cont+5cies1 &1 = ! p]iod cov]$ by ^?    
f9ancial /atem5ts1 results ( op]ations4 
7v7 ,%ell company ,! t]m %ell company   

means a company t1 at ! "t ( a          
transaction ) an eligible privately held
 company-- 7,i7 has no or nom9al        
op]ations2 &  7,,ii7 has-- 7aa7 no or   
nom9al assets2  7bb7 assets consi/+     
solely ( ca% & ca% equival5ts2 or  7cc7 
assets consi/+ ( any am\nt ( ca% & ca%  
equival5ts & nom9al o!r assets4  7,b7   
,g5]al exemption ,except z provid$ 9    
subp>agraphs 7,c7 & 7,d71 an ,m,a brok] 
%all be exempt f regi/ration "u ?is     
section4  7,c7 ,exclud$ activities ,an  
,m,a brok] %all n be eligible = an      
exemption "u ?is p>agraph if ! ,m,a     
brok] does any ( ! foll[+3  7i7         
,directly or indirectly1 9 connection ) 
! transf] ( own]%ip ( an eligible       
privately held company1 receives1 holds1
 transmits1 or has cu/ody ( ! funds or  
securities to be ex*ang$ by ! p>ties to 
! transaction4  7ii7 ,engages on behalf 
( an issu] 9 a public (f]+ ( any class (
 securities t is regi/]$1 or is requir$ 
to be regi/]$1 ) ! ,commission "u       
section #ab or ) respect to :i* ! issu] 

files1 or is requir$ to file1 p]iodic   
in=mation1 docum5ts1 & reports "u       
subsection 7d74  7iii7 ,engages on      
behalf ( any p>ty 9 a transaction       
involv+ a %ell company1 o!r ?an a       
bus9ess comb9ation relat$ %ell company4 
7iv7 ,directly1 or indirectly ?r\gh any 
affiliate ( ! ,m,a brok]1 provides      
f9anc+ relat+ to ! transf] ( own]%ip (  
an eligible privately held company4  7v7
 ,assi/s any p>ty 9 obta9+ f9anc+ f an  
unaffiliat$ ?ird p>ty )\t-- 7,i7 comply+
 ) all o!r applicable laws 9 connection 
) t assi/ance1 includ+1 if applicable1  
"p #bbj ( title #ab1 ,code ( ,f$]al     
,regulations2 &  7,,ii7 disclos+ any    
comp5sation 9 writ+ to ! p>ty4  7vi7    
,repres5ts bo? ! buy] & ! sell] 9 ! same
 transaction )\t--  7,i7 provid+ cle>   
writt5 disclosure ) respect to ! p>ties 
! brok] repres5ts2 &  7,,ii7 obta9+     
writt5 cons5t f bo? p>ties to ! jo9t    
repres5tation4  7vii7 ,facilitates a    
transaction ) a gr\p ( buy]s =m$ ) !    
assi/ance ( ! ,m,a brok] to acquire !   

eligible privately held company4  7viii7
 7,i7 ,engages 9 a transaction involv+ !
 transf] ( own]%ip ( an eligible        
privately held company to a passive buy]
 or gr\p ( passive buy]s4  7,,ii7 ,=    
purposes ( subclause 7,i71 a buy] t is  
actively involv$ 9 manag+ ! acquir$     
company describ$ 9 t subclause may n be 
con/ru$ to be a passive buy]1 )\t reg>d 
to :e!r t buy] is own$ by passive       
b5eficial own]s4  7ix7 ,b9ds a p>ty to a
 transf] ( own]%ip ( an eligible        
privately held company4  7,d7           
,disqualifications ,an ,m,a brok] %all n
 be eligible = an exemption "u ?is      
p>agraph if ! brok] is subject to--  7i7
 susp5sion or revocation ( ! regi/ration
 ( ! brok] "u p>agraph 7#d72  7ii7 a    
/atutory disqualification describ$ 9    
section #c7;a77#ci72  7iii7 a           
disqualification "u ! rules adopt$ by ! 
,commission "u section #ibf ( ! ,inve/or
 ,protection & ,securities ,re=m ,act ( 
#bjaj 7#ae ,u4,s4,c4 #gg;d note72 or    
7iv7 a f9al ord] describ$ 9 p>agraph    

7#d77;,h74  7,e7 ,rule ( con/ruction    
,no?+ 9 ?is p>agraph may be con/ru$ to  
limit any o!r au?ority ( ! ,commission  
to exempt any p]son1 or any class (     
p]sons1 f any provision (--  7i7 ?is    
title2 or  7ii7 any rule or regulation  
issu$ "u ?is title4  7,f7 ,inflation    
adju/m5t  7i7 ,9 g5]al ,on ! date t is  
#e ye>s aft] ! date ( enactm5t ( !      
,small ,bus9ess ,m]g]s1 ,acquisitions1  
,sales1 & ,brok]age ,simplification ,act
 ( #bjah1 & e #e ye>s !reaft]1 ea* doll>
 am\nt 9 subp>agraph 7,a77iii77,i77bb7  
%all be adju/$ by--  7,i7 divid+ !      
annual value ( ! ,employm5t ,co/ ,index 
,= ,wages & ,sal>ies1 ,private ,indu/ry 
,work]s 7or any successor index71 z     
publi%$ by ! ,bureau ( ,labor ,/ati/ics1
 = ! cal5d> ye> prec$+ ! cal5d> ye> 9   
:i* ! adju/m5t is be+ made by ! annual  
value ( su* index 7or successor7 = !    
cal5d> ye> end+ ,decemb] #ca1 #bjab2 &  
7,,ii7 multiply+ t doll> am\nt by !     
quoti5t obta9$ "u subclause 7,i74  7ii7 
,r\nd+ ,ea* doll> am\nt det]m9$ "u      

clause 7i7 %all be r\nd$ to ! ne>e/     
multiple ( #ajj1jjj4  4  #c4 ,effective 
date ,?is ,act1 & any am5dm5t made by   
?is ,act1 %all take effect on ! date t  
is #ij days aft] ! date ( enactm5t ( ?is
 ,act4