,i  #aaf? ,,congress  #a/ ,session  ,h4 
,r4 #fji  ,,9 ,,! ,,h\se ,,(            
,,repres5tatives  ,janu>y #af1 #bjai    
,mr4 ,huiz5ga 7= himself1 ,mr4 ,posey1 &
 ,mr4 ,higg9s ( ,new ,york7 introduc$ ! 
foll[+ bill2 :i* 0 ref]r$ to !          
,committee on ,f9ancial ,s]vices  ,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 ( #bjai4 
#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 ,9 g5]al ,except z provid$ 9       
subp>agraph 7,b71 an ,m,a brok] %all be 
exempt f regi/ration "u ?is section4    
7,b7 ,exclud$ activities ,an ,m,a brok] 

is n exempt f regi/ration "u ?is        
p>agraph if su* 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 ( its affiliates1 provides    
f9anc+ relat$ to ! transf] ( own]%ip (  
an eligible privately held company4  7v7
 ,assi/s any p>ty to obta9 f9anc+ f an  
unaffiliat$ ?ird p>ty )\t-- 7,i7 comply+
 ) all o!r applicable laws 9 connection 

) su* assi/ance1 includ+1 if applicable1
 ,regulation ,t 7#ab ,c4,f4,r4 #bbj et  
seq472 &  7,,ii7 disclos+ any           
comp5sation 9 writ+ to ! p>ty4  7vi7    
,repres5ts bo? ! buy] & ! sell] 9 ! same
 transaction )\t provid+ cle> writt5    
disclosure z to ! p>ties ! brok]        
repres5ts & 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 ,engages 9 a           
transaction involv+ ! transf] ( own]%ip 
( an eligible privately held company to 
a passive buy] or gr\p ( passive buy]s4 
,= purposes ( ! prec$+ s5t5ce1 a buy] t 
is actively involv$ 9 manag+ ! acquir$  
company is n a passive buy]1 reg>dless (
 :e!r su* buy] is itself own$ by passive
 b5eficial own]s4  7ix7 ,b9ds a p>ty to 
a transf] ( own]%ip ( an eligible       
privately held company4  7,c7           
,disqualifications ,an ,m,a brok] is n  
exempt f regi/ration "u ?is p>agraph if 

su* brok] is subject to--  7i7 susp5sion
 or revocation ( regi/ration "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,d7 ,rule (       
con/ruction ,no?+ 9 ?is p>agraph %all be
 con/ru$ to limit any o!r au?ority ( !  
,commission to exempt any p]son1 or any 
class ( p]sons1 f any provision ( ?is   
title1 or f any provision ( any rule or 
regulation !reund]4  7,e7 ,def9itions ,9
 ?is p>agraph3  7i7 ,bus9ess comb9ation 
relat$ %ell company ,! t]m bus9ess      
comb9ation relat$ %ell company means a  
%ell company t is =m$ by an entity t is 
n a %ell company-- 7,i7 solely = !      
purpose ( *ang+ ! corporate domicile ( t
 entity solely )9 ! ,unit$ ,/ates2 or   
7,,ii7 solely = ! purpose ( complet+ a  
bus9ess comb9ation transaction 7z def9$ 

"u section #bcj4afe7;f7 ( title #ag1    
,code ( ,f$]al ,regulations7 among "o or
 m entities o!r ?an ! company itself1   
none ( :i* is a %ell company4  7ii7     
,control ,! t]m control means ! p[]1    
directly or indirectly1 to direct !     
managem5t or policies ( a company1 :e!r 
?r\gh own]%ip ( securities1 by contract1
 or o!rwise4 ,!re is a presumption (    
control = any p]son :o--  7,i7 is a     
director1 g5]al p>tn]1 memb] or manag] (
 a limit$ liability company1 or         
corporate (fic] ( a corporation or      
limit$ liability company1 & ex]cises    
executive responsibility 7or has simil> 
/atus or functions72  7,,ii7 has ! "r to
 vote #be p]c5t or m ( a class ( vot+   
securities or ! p[] to sell or direct ! 
sale ( #be p]c5t or m ( a class ( vot+  
securities2 or  7,,iii7 9 ! case ( a    
p>tn]%ip or limit$ liability company1   
has ! "r to receive ^u dissolution1 or  
has contribut$1 #be p]c5t or m ( !      
capital4  7iii7 ,eligible privately held
 company ,! t]m eligible privately held 

company means a privately held company t
 meets bo? ( ! foll[+ conditions3  7,i7 
,! company 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 7d74  
7,,ii7 ,9 ! fiscal ye> end+ imm$iately  
be=e ! fiscal ye> 9 :i* ! s]vices ( !   
,m,a brok] are initially engag$ )       
respect to ! securities transaction1 !  
company meets ei!r or bo? ( ! foll[+    
conditions 7det]m9$ 9 accordance ) !    
hi/orical f9ancial acc\nt+ records ( !  
company73  7aa7 ,! e>n+s ( ! company    
be=e int]e/1 taxes1 depreciation1 &     
amortization are less ?an #be1jjj1jjj4  
7bb7 ,! gross rev5ues ( ! company are   
less ?an #bej1jjj1jjj4  ,= purposes (   
?is subclause1 ! ,commission may by rule
 modify ! doll> figures 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 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$emption (1 or a bus9ess comb9ation    
involv+1 securities or assets ( !       
eligible privately held company1 if !   
brok] reasonably believes t-- 7,i7 ^u   
consummation ( ! transaction1 any p]son 
acquir+ securities or assets ( !        
eligible privately held company1 act+   
alone or 9 conc]t1 w control &1 directly
 or indirectly1 w be active 9 !         
managem5t ( ! eligible privately held   
company or ! bus9ess conduct$ ) ! assets
 ( ! eligible privately held company2 & 
7,,ii7 if any p]son is (f]$ securities 9
 ex*ange = securities or assets ( !     
eligible privately held company1 su*    
p]son w1 prior to becom+ legally b\nd to

 consummate ! transaction1 receive or h 
reasonable access to ! mo/ rec5t fiscal 
ye>-end f9ancial /atem5ts ( ! issu] ( ! 
securities z cu/om>ily prep>$ by !      
managem5t ( ! issu] 9 ! normal c\rse (  
op]ations &1 if ! f9ancial /atem5ts ( ! 
issu] are audit$1 review$1 or compil$1  
any relat$ /atem5t by ! indep5d5t       
acc\ntant1 a balance %eet dat$ n m ?an  
#abj days be=e ! date ( ! (f]1 &        
in=mation p]ta9+ to ! managem5t1        
bus9ess1 results ( op]ations = ! p]iod  
cov]$ by ! =ego+ f9ancial /atem5ts1 &   
mat]ial loss cont+5cies ( ! issu]4  7v7 
,%ell company ,! t]m %ell company means 
a company t 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,f7 ,inflation     
adju/m5t  7i7 ,9 g5]al ,on ! date t is  
#e ye>s aft] ! date ( ! enactm5t ( ?is  

p>agraph1 & e #e ye>s !reaft]1 ea* doll>
 am\nt 9 subp>agraph 7,e77iii77,,ii7    
%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$+ ! cal5d> ye> 9   
:i* ! adju/m5t is be+ made by ! annual  
value ( su* index 7or successor7 = !    
cal5d> ye> end+ ,decemb] #ca1 #bjab2 &  
7,,ii7 multiply+ su* doll> am\nt by !   
quoti5t obta9$ "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 ,act & any am5dm5t made by ?is
 ,act %all take effect on ! date t is   
#ij days aft] ! date ( ! enactm5t ( ?is 
,act4