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Securities Act of 1933 – Proposed Bill to Facilitate Liquidity of Small Company Securities (JOBS Act 2.0)

  • July 21st, 2014
  • Russell Weigel
  • Comments Off on Securities Act of 1933 – Proposed Bill to Facilitate Liquidity of Small Company Securities (JOBS Act 2.0)

A BILL

To amend the Securities Act of 1933 and the Securities Exchange Act of 1934 to facilitate investment liquidity of Securities, including those issued in JOBS Act and other small company transactions.

 

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the “Jumpstart Our Business Start-Ups Investment Liquidity Act.”

SEC. 2. SECURITIES ACT OF 1933 AMENDMENT.

Section 4(a)(1) of the Securities Act of 1933 (15 U.S.C. 77d(1)) is amended—

By inserting “, including, but not limited to:

(a) The public re-offer and re-sale of securities exempt from registration under Sections 3(a)(11), 3(b)(1), or 3(b)(2) of the Securities Act of 1933 and the rules promulgated thereunder, and securities that were initially purchased or acquired in a transaction exempt from registration under Sections 4(a)(2) or 4(a)(6) of the Securities Act of 1933 and the rules promulgated thereunder, provided that:

(i) a period of 365 days has elapsed from the date that the re-seller acquired the security from its issuer or an affiliate of its issuer; and

(ii) at the time of re-sale the re-seller is not an affiliate of the issuer or the beneficial owner of ten percent or more of the issued and outstanding securities of the class being offered for re-sale, excluding from the ten percent calculation any securities of which the beneficial owner has purchased, or has exercised a right to purchase or acquire, but has not received delivery.

(b) The re-sale or transfer of a restricted security by a non-affiliate of an issuer in a transaction not involving a broker or dealer acting as the purchaser’s agent, provided that there is no advertising or public solicitation in connection with the transaction by the seller or transferor or anyone acting on the seller’s or transferor’s behalf.”

 

Section 18(b)(1) of the Securities Act of 1933 (15 U.S.C. 77r(b)(1)) is amended—

By inserting a new sub-paragraph (D), “(D) a security of the same class of securities registered pursuant to Section 12, and including the rights to issue such securities, and the registrant is current in its reporting obligations at the time of the transaction.”

Section 18(b)(2) of the Securities Act of 1933 (15 U.S.C. 77r(b)(2)) is amended—

By inserting a new paragraph (2), “(2) EXCLUSIVE FEDERAL TRANSACTIONAL EXEMPTION.—A security issued pursuant to an effective registration statement under the Securities Act of 1933 is a covered security.”

By renumbering former paragraph (2) as paragraph (3).

By renumbering former paragraph (3) as paragraph (4).

By renumbering former paragraph (4) as paragraph (5).

By amending and conforming former sub-paragraph (4)(A), by striking out “(1) or (3)” and by replacing the stricken words with “(a)(1), (a)(2), or (a)(3).”

By amending and conforming former sub-paragraph (4)(B), by striking out “4(4)” and by replacing the stricken words with “4(a)(4).”

By amending and conforming former sub-paragraph (4)(D), by striking reference to “section 3(b)(2)” and replacing the reference with “section 3(b).”.

By renumbering the former second sub-paragraph (4)(D) as sub-paragraph (4)(E).

By renumbering former sub-paragraph (4)(E) as sub-paragraph (4)(F).

By amending and conforming former sub-paragraph (4)(E) by striking reference to “section 4(2)” and replacing the reference with “section 4(a)(2).”

SEC. 3. SECURITIES EXCHANGE ACT OF 1934 AMENDMENT.

Section 3(a)(51)(A) of the Securities Exchange Act of 1934 is amended by inserting after Section 3(a)(51)(A)(iii), a new sub-paragraph (iv), “(iv) Part of a class of securities registered pursuant to Sections 12 or 15(d) of the Securities Exchange Act of 1934, is a security offered pursuant to an effective registration statement filed under the Securities Act of 1933, is a security of an Emerging Growth Company, is a security exempted from registration pursuant to Section 3 of the Securities Act of 1933, or is issued in a transaction exempted under Section 4(a)(2) or 4(a)(6) of the Securities Act of 1933;”

By renumbering former Section 3(a)(51)(A)(iv) as Section 3(a)(51)(A)(v).

By renumbering former Section 3(a)(51)(A)(v) as Section 3(a)(51)(A)(vi).

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