Expanding Access to Capital Act of 2023
This bill reduces various securities regulations for certain companies, brokers, and advisors. The bill also allows more investors to invest in specified types of ventures.
DIVISION A--Strengthening Public Markets
TITLE I--Remove Aberrations in the Market Cap Test for Target Company Financial Statements
This title expands the information allowed to be included when calculating whether an acquisition or disposition of a subsidiary is significant for purposes of required financial disclosures by publicly traded companies. Currently, an acquisition or disposition is considered significant when the company's investment in the subsidiary is calculated to exceed 10% of the aggregate worldwide market value of the company's voting and non-voting common equity. Under the title, this market value may additionally include applicable trading value, conversion value, or exchange value of all of the company's outstanding classes of stock, including preferred stock and non-traded common shares that are convertible into or exchangeable for traded common shares.
TITLE II--Helping Startups Continue To Grow
Helping Startups Continue To Grow Act
This title allows certain issuers of securities regulated as emerging growth companies to continue operating under such regulations, including those related to reduced disclosures and other exemptions, for an additional two years. It also raises the limit of total annual gross revenues under which issuers qualify as emerging growth companies to $1.5 billion. Finally, under the title, a company may continue to be considered an emerging growth company even after it becomes a large accelerated filer.
TITLE III--SEC and PCAOB Auditor Requirements for Newly Public Companies
This title modifies the auditor independence standards required by the Public Company Accounting Oversight Board (PCAOB) and the Securities and Exchange Commission (SEC). Specifically, an issuer that is a public company or has filed to become a public company must comply with certain auditor independence standards regarding audits that occurred in the fiscal year prior to the company going public.
TITLE IV--EXPAND THE PROTECTION FOR RESEARCH REPORTS TO COVER ALL SECURITIES OF ALL ISSUERS
This title allows a securities broker or dealer to publish or distribute a research report on a proposed public offering by any issuer without it being considered an offer to sell securities for purposes of registration requirements. Currently, only reports published or distributed regarding a proposed public offering by an emerging growth company fall under this exception.
TITLE V--EXCLUDE QIBS AND IAAS FROM THE RECORD HOLDER COUNT FOR MANDATORY REGISTRATION
This title excludes certain institutional investors and buyers as holders of a security. Specifically, these investors are not considered security holders under mandatory securities registration thresholds applicable to an issuer of securities.
TITLE VI--EXPAND WKSI ELIGIBILITY
This title reduces the required aggregate market value of voting and non-voting common equity shares for an issuer of securities to qualify as a well-known seasoned issuer. A well-known seasoned issuer is allowed to make expedited public offerings of securities through automatic shelf registrations.
DIVISION B--HELPING SMALL BUSINESSES AND ENTREPRENEURS
TITLE I--UNLOCKING CAPITAL FOR SMALL BUSINESSES
Unlocking Capital for Small Businesses Act of 2023
This title revises the regulatory treatment of private-placement brokers (brokers who receive transaction-based compensation for the sale of securities to preselected individuals or institutions) and finders (private-placement brokers who do not exceed a specified amount of compensation, transaction value, or number of transactions in a year).
Specifically, the title (1) requires the SEC to establish registration requirements for private-placement brokers that are no more stringent than those imposed on crowdfunding portals, (2) allows for membership in any national securities association for private-placement brokers, (3) exempts private-placement brokers from broker regulations, and (4) otherwise modifies provisions related to private-placement brokers and finders.
TITLE II--SMALL BUSINESS INVESTOR CAPITAL ACCESS
Small Business Investor Capital Access Act
This title requires the SEC to adjust annually for inflation the dollar amount of an exemption from registration requirements for investment advisors of private funds. Currently, investment advisors of private funds of less than $150 million in assets under management are exempt. The title would require the SEC to adjust that amount annually based on the change in the Consumer Price Index.
TITLE III--IMPROVING CAPITAL ALLOCATION FOR NEWCOMERS
Improving Capital Allocation for Newcomers Act of 2023
This title expands qualification requirements for venture capital funds. Venture capital funds are exempt from certain regulations applicable to other investment firms, including those related to filings, audits, and restricted communications with investors. Currently, an investment firm qualifies as a venture capital fund if, among other requirements (1) the fund's securities are owned by 250 persons or less, and (2) the fund has $10 million or less in aggregate capital contributions and uncalled committed capital. The title increases these amounts to 600 persons and $150 million, respectively.
TITLE IV--SMALL ENTREPRENEURS’ EMPOWERMENT AND DEVELOPMENT
Small Entrepreneurs' Empowerment and Development Act of 2023 or the SEED Act of 2023
This title establishes an exemption to certain securities regulations for small offerings of securities. Specifically, securities registration is not required for a sale of securities if the total amount of securities sold by the issuer during the preceding 12-month period sale does not exceed $250,000.
Furthermore, the SEC must issue rules under which an issuer is disqualified from offering securities through this exemption. These rules must disqualify any such offering or sale of securities by a person subject to specified regulatory disciplinary actions or convicted of certain felonies or misdemeanors.
TITLE V--REGULATION A+ IMPROVEMENT
Regulation A+ Improvement Act of 2023
This title increases the dollar limit of certain securities offerings exempt from registration requirements under Regulation A+ from $50 million annually to $150 million annually, adjusted in future years for inflation.
TITLE VI--DEVELOPING AND EMPOWERING OUR ASPIRING LEADERS
Developing and Empowering our Aspiring Leaders Act of 2023 or the DEAL Act of 2023
This title directs the SEC to revise venture capital investment regulations. Under current law, non-qualifying investments—which include secondary transactions and investments in other venture capital funds—may comprise up to 20% of a venture capital fund.
The title allows investments acquired through secondary transactions or investments in other venture capital funds to be considered as qualifying investments for venture capital funds. However, for a private fund to qualify as a venture capital fund, the fund's investments must predominately (1) be acquired directly, or (2) be investments in other venture capital funds.
The Government Accountability Office (GAO) must report on the title’s effects.
TITLE VII--IMPROVING CROWDFUNDING OPPORTUNITIES
Improving Crowdfunding Opportunities Act
This title reduces regulations applicable to crowdfunding securities and portals. Crowdfunding is used to raise capital through a large number of individuals investing potentially small amounts of money.
The title exempts certain securities issued under crowdfunding regulations from state regulation of secondary transactions. It also exempts crowdfunding portals from (1) certain anti-money laundering reporting and recordkeeping requirements, and (2) liability for material misstatements or omissions unless the portal knowingly makes certain untrue statements or engages in fraud or deceit.
The title revises the disclosure requirements for crowdfunding issuers with specified target offering amounts. The title also expands the types of investors allowed to invest in these companies to include investment companies. Finally, the title increases the aggregate amount these companies are allowed to raise in a 12-month period and generally raises the amount individuals are allowed to invest in a 12-month period.
TITLE VIII--RESTORING THE SECONDARY TRADING MARKET
Restoring the Secondary Trading Market Act
This title prohibits states from banning, limiting, or imposing conditions upon off-exchange secondary trading of securities. This prohibition applies if the issuer of those securities provides public information on the issuer's financial status in accordance with federal regulations.
DIVISION C--INCREASING ACCESS TO PRIVATE MARKETS
TITLE I--GIG WORKER EQUITY COMPENSATION
Gig Worker Equity Compensation Act
This title broadens the existing SEC registration exemption for the issuance of securities as part of an employee-compensation package. Specifically, the title applies this exemption to the issuance of securities as compensation for independent contractors.
The GAO must report on the title’s effects.
TITLE II--INVESTMENT OPPORTUNITY EXPANSION
Investment Opportunity Expansion Act
This title expands who may be considered an accredited investor for purposes of participating in private offerings of securities. (Certain unregistered securities may only be offered to accredited investors.) Specifically, the title allows an individual to qualify if their aggregate investment in such a securities offering is not more than 10% of the individual's net assets or 10% of the individual's annual income, whichever is greater.
TITLE III--RISK DISCLOSURE AND INVESTOR ATTESTATION
Risk Disclosure and Investor Attestation Act
This title further expands who may be considered an accredited investor for purposes of participating in private offerings of securities. Specifically, the title allows an individual to qualify by certifying to the issuer of securities that the individual understands the risks of investment in private issuers. Currently, accredited investors must satisfy certain requirements indicating their reduced exposure to financial risk, including those related to income, net worth, or knowledge and experience.
TITLE IV--ACCREDITED INVESTORS INCLUDE INDIVIDUALS RECEIVING ADVICE FROM CERTAIN PROFESSIONALS
This title amends the definition of an accredited investor in the context of selling and purchasing securities to include those individuals receiving investment advice from a person with professional certifications, as determined by the SEC.
DIVISION D--HELPING ANGELS LEAD OUR STARTUPS
This division directs the SEC to expand the applicability of Regulation D, which exempts certain securities offerings from SEC registration requirements but prohibits general solicitation or general advertising with respect to such offerings. Under the division, this prohibition shall not apply to events with specified kinds of sponsors—including angel investor groups unconnected to broker-dealers or investment advisers—where presentations or communications are made by or on behalf of an issuer, if
DIVISION E--IMPROVING DISCLOSURE FOR INVESTORS
Improving Disclosure for Investors Act of 2024
This division requires the SEC to propose and finalize rules to allow entities to deliver regulatory documents to investors electronically. The SEC must establish a mechanism for investors to opt out of electronic delivery and receive paper documents instead. If the SEC does not finalize rules within one year after enactment, the title allows for electronic delivery of these documents.
DIVISION F--ENHANCEMENT OF 403(b) PLANS
Retirement Fairness for Charities and Educational Institutions Act of 2024
This division allows 403(b) retirement plans (i.e., retirement plans designed for certain employees of public schools, charities, and churches) to invest in collective investment trusts, which are a group of pooled investment assets held by a bank or trust company, and in insurance company separate accounts.
DIVISION G--INCREASING INVESTOR OPPORTUNITIES
This division allows a closed-end fund—a portfolio of pooled assets with a limited number of shares traded on an exchange—to increase its investment in private investment funds. The SEC is prohibited from limiting the sale or listing of securities of a closed-end fund that invests in private investment funds. This division also apples to a closed-end company treated as a business development company.
[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2799 Introduced in House (IH)]
<DOC>
118th CONGRESS
1st Session
H. R. 2799
To make reforms to the capital markets of the United States, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
April 24, 2023
Mr. McHenry introduced the following bill; which was referred to the
Committee on Financial Services, and in addition to the Committee on
Education and the Workforce, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as
fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To make reforms to the capital markets of the United States, and for
other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Expanding Access
to Capital Act of 2023''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
DIVISION A--STRENGTHENING PUBLIC MARKETS
TITLE I--REMOVE ABERRATIONS IN THE MARKET CAP TEST FOR TARGET COMPANY
FINANCIAL STATEMENTS
Sec. 1101. Avoiding aberrational results in requirements for
acquisition and disposition financial
statements.
TITLE II--IMPROVING DISCLOSURE FOR INVESTORS
Sec. 1201. Short title.
Sec. 1202. Electronic delivery.
TITLE III--HELPING STARTUPS CONTINUE TO GROW
Sec. 1301. Short title.
Sec. 1302. Emerging growth company criteria.
TITLE IV--SEC AND PCAOB AUDITOR REQUIREMENTS FOR NEWLY PUBLIC COMPANIES
Sec. 1401. Auditor independence for certain past audits occurring
before an issuer is a public company.
TITLE V--EXPAND THE PROTECTION FOR RESEARCH REPORTS TO COVER ALL
SECURITIES OF ALL ISSUERS
Sec. 1501. Provision of research.
TITLE VI--CODIFY MIFID NO ACTION LETTER
Sec. 1601. Definition of investment adviser amended to exclude brokers
and dealers compensated for certain
research services.
TITLE VII--EXCLUDE QIBS AND IAAS FROM THE RECORD HOLDER COUNT FOR
MANDATORY REGISTRATION
Sec. 1701. Exclusions from mandatory registration threshold.
TITLE VIII--EXPAND WKSI ELIGIBILITY
Sec. 1801. Definition of well-known seasoned issuer.
TITLE IX--SMALLER REPORTING COMPANY, ACCELERATED FILER, AND LARGE
ACCELERATED FILER THRESHOLDS
Sec. 1901. Smaller reporting company, accelerated filer, and large
accelerated filer thresholds.
DIVISION B--HELPING SMALL BUSINESSES AND ENTREPRENEURS
TITLE I--UNLOCKING CAPITAL FOR SMALL BUSINESSES
Sec. 2101. Short title.
Sec. 2102. Safe harbors for private placement brokers and finders.
Sec. 2103. Limitations on State law.
TITLE II--SMALL BUSINESS INVESTOR CAPITAL ACCESS
Sec. 2201. Short title.
Sec. 2202. Inflation adjustment for the exemption threshold for certain
investment advisers of private funds.
TITLE III--IMPROVING CAPITAL ALLOCATION FOR NEWCOMERS
Sec. 2301. Short title.
Sec. 2302. Qualifying venture capital funds.
TITLE IV--SMALL ENTREPRENEURS' EMPOWERMENT AND DEVELOPMENT
Sec. 2401. Short title.
Sec. 2402. Micro-offering exemption.
TITLE V--REGULATION A+ IMPROVEMENT
Sec. 2501. Short title.
Sec. 2502. JOBS Act-related exemption.
TITLE VI--DEVELOPING AND EMPOWERING OUR ASPIRING LEADERS
Sec. 2601. Short title.
Sec. 2602. Definitions.
Sec. 2603. Reports.
TITLE VII--HELPING ANGELS LEAD OUR STARTUPS
Sec. 2701. Short title.
Sec. 2702. Clarification of general solicitation.
Sec. 2703. Restrictions on new filing requirements in connection with a
general solicitation.
TITLE VIII--IMPROVING CROWDFUNDING OPPORTUNITIES
Sec. 2801. Short title.
Sec. 2802. Crowdfunding revisions.
TITLE IX--RESTORING THE SECONDARY TRADING MARKET
Sec. 2901. Short title.
Sec. 2902. Exemption from State regulation.
DIVISION C--INCREASING ACCESS TO PRIVATE MARKETS
TITLE I--GIG WORKER EQUITY COMPENSATION
Sec. 3101. Short title.
Sec. 3102. Extension of Rule 701.
Sec. 3103. Preemption of certain provisions of State law.
Sec. 3104. GAO study.
TITLE II--INVESTMENT OPPORTUNITY EXPANSION
Sec. 3201. Short title.
Sec. 3202. Investment thresholds to qualify as an accredited investor.
TITLE III--RISK DISCLOSURE AND INVESTOR ATTESTATION
Sec. 3301. Short title.
Sec. 3302. Investor attestation.
TITLE IV--INCREASING INVESTOR OPPORTUNITIES
Sec. 3401. Short title.
Sec. 3402. Closed-end company authority to invest in private funds.
TITLE V--ACCREDITED INVESTORS INCLUDE INDIVIDUALS RECEIVING ADVICE FROM
CERTAIN PROFESSIONALS
Sec. 3501. Accredited investors include individuals receiving advice
from certain professionals.
TITLE VI--RETIREMENT FAIRNESS FOR CHARITIES AND EDUCATIONAL
INSTITUTIONS
Sec. 3601. Short title.
Sec. 3602. Enhancement of 403(b) plans.
DIVISION A--STRENGTHENING PUBLIC MARKETS
TITLE I--REMOVE ABERRATIONS IN THE MARKET CAP TEST FOR TARGET COMPANY
FINANCIAL STATEMENTS
SEC. 1101. AVOIDING ABERRATIONAL RESULTS IN REQUIREMENTS FOR
ACQUISITION AND DISPOSITION FINANCIAL STATEMENTS.
The Securities and Exchange Commission shall revise section 210.1-
02(w)(1)(i)(A) of title 17, Code of Federal Regulations, to permit a
registrant, in determining the significance of an acquisition or
disposition described in such section 210.1-02(w)(1)(i)(A), to
calculate the registrant's aggregate worldwide market value based on
the applicable trading value, conversion value, or exchange value of
all of the registrant's outstanding classes of stock (including
preferred stock and non-traded common shares that are convertible into
or exchangeable for traded common shares) and not just the voting and
non-voting common equity of the registrant.
TITLE II--IMPROVING DISCLOSURE FOR INVESTORS
SEC. 1201. SHORT TITLE.
This title may be cited as the ``Improving Disclosure for Investors
Act of 2023''.
SEC. 1202. ELECTRONIC DELIVERY.
(a) Promulgation of Rules.--Not later than 180 days after the date
of the enactment of this section, the Securities and Exchange
Commission shall propose and, not later than 1 year after the date of
the enactment of this section, the Commission shall finalize, rules,
regulations, amendments, or interpretations, as appropriate, to allow a
covered entity to satisfy the entity's obligation to deliver regulatory
documents required under the securities laws to investors using
electronic delivery.
(b) Required Provisions.--Rules, regulations, amendments, or
interpretations the Commission promulgates pursuant to subsection (a)
shall:
(1) With respect to investors that do not receive all
regulatory documents by electronic delivery, provide for--
(A) delivery of an initial communication in paper
form regarding electronic delivery;
(B) a transition period not to exceed 180 days
until such regulatory documents are delivered to such
investors by electronic delivery; and
(C) during a period not to exceed 2 years following
the transition period set forth in subparagraph (B),
delivery of an annual notice in paper form solely
reminding such investors of the ability to opt out of
electronic delivery at any time and receive paper
versions of regulatory documents.
(2) Set forth requirements for the content of the initial
communication described in paragraph (1)(A).
(3) Set forth requirements for the timing of delivery of a
notice of website availability of regulatory documents and the
content of the appropriate notice described in subsection
(h)(3)(B).
(4) Provide a mechanism for investors to opt out of
electronic delivery at any time and receive paper versions of
regulatory documents.
(5) Require measures reasonably designed to identify and
remediate failed electronic deliveries of regulatory documents.
(6) Set forth minimum requirements regarding readability
and retainability for regulatory documents that are delivered
electronically.
(7) For covered entities other than brokers, dealers,
investment advisers registered with the Commission, and
investment companies, require measures reasonably designed to
ensure the confidentiality of personal information in
regulatory documents that are delivered to investors
electronically.
(c) Exemption From Certain Requirements.--Section 101(c) of the
Electronic Signatures in Global and National Commerce Act (15 U.S.C.
7001(c)) shall not apply with respect to a regulatory document
delivered in accordance with this section.
(d) Rule of Construction.--Nothing in this section shall be
construed as altering the substance or timing of any regulatory
document obligation under the securities laws or regulations of a self-
regulatory organization.
(e) Treatment of Revisions Not Completed in a Timely Manner.--If
the Commission fails to finalize the rules, regulations, amendments, or
interpretations required under subsection (a) before the date specified
in such subsection--
(1) a covered entity may deliver regulatory documents using
electronic delivery in accordance with subsections (b) through
(d); and
(2) such electronic delivery shall be deemed to satisfy the
obligation of the covered entity to deliver regulatory
documents required under the securities laws.
(f) Other Action.--
(1) Review of rules.--The Commission shall--
(A) within 180 days of the date of enactment of
this Act, conduct a review of the rules and regulations
of the Commission to determine whether any such rules
or regulations require delivery of written documents to
investors; and
(B) within 1 year of the date of enactment of this
Act, promulgate amendments to such rules or regulations
to provide that any requirement to deliver a regulatory
document ``in writing'' may be satisfied by electronic
delivery.
(2) Actions by self-regulatory organizations.--Each self-
regulatory organization shall adopt rules and regulations, or
amend the rules and regulations of the self-regulatory
organization, consistent with this Act and consistent with
rules, regulations, amendments, or interpretations finalized by
the Commission pursuant to subsection (a).
(3) Rule of application.--This subsection shall not apply
to a rule or regulation issued pursuant to a Federal statute if
that Federal statute specifically requires delivery of written
documents to investors.
(g) Definitions.--In this section:
(1) Commission.--The term ``Commission'' means the
Securities and Exchange Commission.
(2) Covered entity.--The term ``covered entity'' means--
(A) an investment company (as defined in section
3(a)(1) of the Investment Company Act of 1940 (15
U.S.C. 80a-3)) that is registered under such Act;
(B) a business development company (as defined in
section 2(a) the Investment Company Act of 1940 (15
U.S.C. 80a-2(a))) that has elected to be regulated as
such under such Act;
(C) a registered broker or dealer (as defined in
section 3(a)(4) and section 3(a)(5) of the Securities
Exchange Act of 1934) (15 U.S.C. 78c(a)(4) &
78c(a)(5));
(D) a registered municipal securities dealer (as
defined in section 3(a)(30) of the Securities Exchange
Act of 1934) (15 U.S.C. 78c(a)(30));
(E) a registered government securities broker or
government securities dealer (as defined in section
3(a)(43) and section 3(a)(44) of the Securities
Exchange Act of 1934) (15 U.S.C. 78c(a)(43) &
78c(a)(44));
(F) a registered investment adviser (as defined in
section 202(a)(11) of the Investment Advisers Act of
1940) (15 U.S.C. 80b-1);
(G) a registered transfer agent (as defined in
section 3(a)(25) of the Securities Exchange Act of
1934) (15 U.S.C. 78c(a)); or
(H) a registered funding portal (as defined in
section 3(a)(81) of the Securities Exchange Act of
1934) (15 U.S.C. 78c(a)).
(3) Electronic delivery.--The term ``electronic delivery'',
with respect to regulatory documents, includes--
(A) the direct delivery of such regulatory document
to an electronic address of an investor;
(B) the posting of such regulatory document to a
website and direct electronic delivery of an
appropriate notice of the availability of the
regulatory document to the investor; and
(C) an electronic method reasonably designed to
ensure receipt of such regulatory document by the
investor.
(4) Regulatory documents.--The term ``regulatory
documents'' includes--
(A) prospectuses meeting the requirements of
section 10(a) of the Securities Act of 1933 (15 U.S.C.
77j);
(B) summary prospectuses meeting the requirements
of--
(i) section 230.498 of title 17, Code of
Federal Regulations; or
(ii) section 230.498A of title 17, Code of
Federal Regulations;
(C) statements of additional information, as
described under section 270.30e-3(h)(3) of title 17,
Code of Federal Regulations;
(D) annual and semi-annual reports to investors
meeting the requirements of section 30(e) of the
Investment Company Act of 1940 (15 U.S.C. 80a-29(e));
(E) notices meeting the requirements under section
270.19a-1 of title 17, Code of Federal Regulations;
(F) confirmations and account statements meeting
the requirements under section 240.10b-10 of title 17,
Code of Federal Regulations;
(G) proxy statements meeting the requirements under
section 240.14a-3 of title 17, Code of Federal
Regulations;
(H) privacy notices meeting the requirements of
Regulation S-P under subpart A of part 248 of title 17,
Code of Federal Regulations;
(I) affiliate marketing notices meeting the
requirements of Regulation S-AM under subpart B of part
248 of title 17, Code of Federal Regulations; and
(J) all other regulatory documents required to be
delivered by covered entities to investors under the
securities laws and the rules and regulations of the
Commission and the self-regulatory organizations.
(5) Securities laws.--The term ``securities laws'' has the
meaning given the term in section 3(a) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)).
(6) Self-regulatory organization.--The term ``self-
regulatory organization'' means--
(A) a self-regulatory organization, as defined in
section 2(a)(26) of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a)); and
(B) the Municipal Securities Rulemaking Board.
(7) Website.--The term ``website'' means an internet
website or other digital, internet, or electronic-based
information repository, such as a mobile application, to which
an investor of a covered entity has been provided reasonable
access.
TITLE III--HELPING STARTUPS CONTINUE TO GROW
SEC. 1301. SHORT TITLE.
This title may be cited as the ``Helping Startups Continue To Grow
Act''.
SEC. 1302. EMERGING GROWTH COMPANY CRITERIA.
(a) Securities Act of 1933.--Section 2(a)(19) of the Securities Act
of 1933 (15 U.S.C. 77b(a)(19)) is amended--
(1) by striking ``$1,000,000,000'' each place such term
appears and inserting ``$1,500,000,000'';
(2) in subparagraph (B)--
(A) by striking ``fifth'' and inserting ``7-year'';
and
(B) by adding ``or'' at the end;
(3) in subparagraph (C), by striking ``; or'' and inserting
a period; and
(4) by striking subparagraph (D).
(b) Securities Exchange Act of 1934.--Section 3(a) of the
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended, in the
first paragraph (80) (related to emerging growth companies)--
(1) by striking ``$1,000,000,000'' each place such term
appears and inserting ``$1,500,000,000'';
(2) in subparagraph (B)--
(A) by striking ``fifth'' and inserting ``7-year'';
and
(B) by adding ``or'' at the end;
(3) in subparagraph (C), by striking ``; or'' and inserting
a period; and
(4) by striking subparagraph (D).
TITLE IV--SEC AND PCAOB AUDITOR REQUIREMENTS FOR NEWLY PUBLIC COMPANIES
SEC. 1401. AUDITOR INDEPENDENCE FOR CERTAIN PAST AUDITS OCCURRING
BEFORE AN ISSUER IS A PUBLIC COMPANY.
(a) Auditor Independence Standards of the Public Company Accounting
Oversight Board.--Section 103 of the Sarbanes-Oxley Act of 2002 (15
U.S.C. 7213) is amended by adding at the end the following:
``(e) Auditor Independence for Certain Past Audits Occurring Before
an Issuer Is a Public Company.--With respect to an issuer that is a
public company or an issuer that has filed a registration statement to
become a public company, the auditor independence rules established by
the Board with respect to audits occurring before the last fiscal year
of the issuer completed before the issuer filed a registration
statement to become a public company shall treat an auditor as
independent if--
``(1) the auditor is independent under standards
established by the American Institute of Certified Public
Accountants applicable to certified public accountants in
United States; or
``(2) with respect to a foreign issuer, the auditor is
independent under comparable standards applicable to certified
public accountants in the issuer's home country.''.
(b) Auditor Independence Standards of the Securities and Exchange
Commission.--Section 10A of the Securities Exchange Act of 1934 (15
U.S.C. 78j-1) is amended by adding at the end the following:
``(n) Auditor Independence for Certain Past Audits Occurring Before
an Issuer Is a Public Company.--With respect to an issuer that is a
public company or an issuer that has filed a registration statement to
become a public company, the auditor independence rules established by
the Commission under the securities laws with respect to audits
occurring before the last fiscal year of the issuer completed before
the issuer filed a registration statement to become a public company
shall treat an auditor as independent if--
``(1) the auditor is independent under standards
established by the American Institute of Certified Public
Accountants applicable to certified public accountants in
United States; or
``(2) with respect to a foreign issuer, the auditor is
independent under comparable standards applicable to certified
public accountants in the issuer's home country.''.
TITLE V--EXPAND THE PROTECTION FOR RESEARCH REPORTS TO COVER ALL
SECURITIES OF ALL ISSUERS
SEC. 1501. PROVISION OF RESEARCH.
Section 2(a)(3) of the Securities Act of 1933 (15 U.S.C. 77b(a)(3))
is amended--
(a) by striking ``an emerging growth company'' and inserting ``an
issuer'';
(b) by striking ``the common equity'' and inserting ``any''; and
(c) by striking ``such emerging growth company'' and inserting
``such issuer''.
TITLE VI--CODIFY MIFID NO ACTION LETTER
SEC. 1601. DEFINITION OF INVESTMENT ADVISER AMENDED TO EXCLUDE BROKERS
AND DEALERS COMPENSATED FOR CERTAIN RESEARCH SERVICES.
Section 202(a)(11) of the Investment Advisers Act of 1940 (15
U.S.C. 80b-2(a)(11)) is amended--
(1) by striking ``(C) any'' and inserting ``(C)(i) any'';
(2) by striking ``dealer and who receives'' and inserting
``dealer; and (ii)(I) who receives''; and
(3) by inserting ``; or (II) who receives special
compensation for research services (as described in section
28(e)(1) of the Securities Exchange Act of 1934 (15 U.S.C.
78bb(e)(1))) from a client that is directly or indirectly
required as a result of laws of a foreign financial regulatory
authority to pay special compensation for such services'' after
``compensation therefor''.
TITLE VII--EXCLUDE QIBS AND IAAS FROM THE RECORD HOLDER COUNT FOR
MANDATORY REGISTRATION
SEC. 1701. EXCLUSIONS FROM MANDATORY REGISTRATION THRESHOLD.
(a) In General.--Section 12(g)(1) of the Securities Exchange Act of
1934 (15 U.S.C. 78l(g)(1)) is amended--
(1) in subparagraph (A)(i), by inserting after ``persons''
the following: ``(that are not a qualified institutional buyer
or an institutional accredited investor)''; and
(2) in subparagraph (B), by inserting after ``persons'' the
following: ``(that are not a qualified institutional buyer or
an institutional accredited investor)''.
(b) Nonapplicability of General Exemptive Authority.--Section 36 of
the Securities Exchange Act of 1934 (15 U.S.C. 78mm) shall not apply to
the matter inserted by the amendments made by subsection (a).
TITLE VIII--EXPAND WKSI ELIGIBILITY
SEC. 1801. DEFINITION OF WELL-KNOWN SEASONED ISSUER.
For purposes of the Federal securities laws, and regulations issued
thereunder, an issuer shall be a ``well-known seasoned issuer'' if--
(1) the aggregate market value of the voting and non-voting
common equity held by non-affiliates of the issuer is
$250,000,000 or more (as determined under Form S-3 general
instruction I.B.1. as in effect on the date of enactment of
this Act); and
(2) the issuer otherwise satisfies the requirements of the
definition of ``well-known seasoned issuer'' contained in
section 230.405 of title 17, Code of Federal Regulations
without reference to any requirement in such definition
relating to minimum worldwide market value of outstanding
voting and non-voting common equity held by non-affiliates.
TITLE IX--SMALLER REPORTING COMPANY, ACCELERATED FILER, AND LARGE
ACCELERATED FILER THRESHOLDS
SEC. 1901. SMALLER REPORTING COMPANY, ACCELERATED FILER, AND LARGE
ACCELERATED FILER THRESHOLDS.
(a) Smaller Reporting Companies.--
(1) In general.--The Securities and Exchange Commission
shall revise the definition of a ``smaller reporting company''
under section 229.10(f)(1) of title 17, Code of Federal
Regulations--
(A) in paragraph (i), by adjusting the public float
threshold from $250,000,000 to $500,000,000; and
(B) in paragraph (ii)--
(i) by adjusting the annual revenue
threshold from $100,000,000 to $250,000,000;
and
(ii) in paragraph (B), by adjusting the
public float threshold from $700,000,000 to
$900,000,000.
(2) Use of three-year rolling average annual revenues.--The
Securities and Exchange Commission shall revise paragraphs
(1)(ii) and (2)(iii)(B) under the definition of ``smaller
reporting company'' under section 229.10(f)(1) of title 17,
Code of Federal Regulations, by substituting ``three-year
rolling average annual revenues'' for ``annual revenues''.
(3) Conforming changes.--The Securities and Exchange
Commission shall revise the definition of a ``smaller reporting
company'' under sections 230.405 and 240.12b-2 of title 17,
Code of Federal Regulations, and any other rule of the
Commission in the same manner as such definition is revised
under paragraphs (1) and (2).
(b) Accelerated Filers and Large Accelerated Filers.--
(1) Large accelerated filer.--The Securities and Exchange
Commission shall revise the definition of a ``large accelerated
filer'' under section 240.12b-2(2) of title 17, Code of Federal
Regulations, to increase the threshold amount (for the
aggregate worldwide market value of the voting and non-voting
common equity held by non-affiliates of an issuer) from
$700,000,000 to $750,000,000.
(2) Threshold to exit accelerated filer status.--The
Securities and Exchange Commission shall revise section
240.12b-2(3)(ii) of title 17, Code of Federal Regulations, to
increase the threshold amount (for the aggregate worldwide
market value of the voting and non-voting common equity held by
non-affiliates of an issuer) at which an issuer is no longer an
accelerated filer from $60,000,000 to $75,000,000.
(3) Threshold to exit large accelerated filer status.--The
Securities and Exchange Commission shall revise section
240.12b-2(3)(iii) of title 17, Code of Federal Regulations, to
increase the threshold amount (for the aggregate worldwide
market value of the voting and non-voting common equity held by
non-affiliates of an issuer) at which an issuer is no longer a
large accelerated filer from $560,000,000 to $750,000,000.
(4) Exclusion of smaller reporting companies.--The
Securities and Exchange Commission shall revise the definitions
of an ``accelerated filer'' and a ``large accelerated filer''
under paragraphs (1) and (2) of section 240.12b-2 of title 17,
Code of Federal Regulations, respectively, to exclude any
issuer that is a smaller reporting company, as defined under
section 229.10(f)(1) of title 17, Code of Federal Regulations.
DIVISION B--HELPING SMALL BUSINESSES AND ENTREPRENEURS
TITLE I--UNLOCKING CAPITAL FOR SMALL BUSINESSES
SEC. 2101. SHORT TITLE.
This title may be cited as the ``Unlocking Capital for Small
Businesses Act of 2023''.
SEC. 2102. SAFE HARBORS FOR PRIVATE PLACEMENT BROKERS AND FINDERS.
(a) In General.--Section 15 of the Securities Exchange Act of 1934
(15 U.S.C. 78o) is amended by adding at the end the following:
``(p) Private Placement Broker Safe Harbor.--
``(1) Registration requirements.--Not later than 180 days
after the date of the enactment of this subsection the
Commission shall promulgate regulations with respect to private
placement brokers that are no more stringent than those imposed
on funding portals.
``(2) National securities associations.--Not later than 180
days after the date of the enactment of this subsection the
Commission shall promulgate regulations that require the rules
of any national securities association to allow a private
placement broker to become a member of such national securities
association subject to reduced membership requirements
consistent with this subsection.
``(3) Disclosures required.--Before effecting a
transaction, a private placement broker shall disclose clearly
and conspicuously, in writing, to all parties to the
transaction as a result of the broker's activities--
``(A) that the broker is acting as a private
placement broker;
``(B) the amount of any payment or anticipated
payment for services rendered as a private placement
broker in connection with such transaction;
``(C) the person to whom any such payment is made;
``(D) any beneficial interest in the issuer, direct
or indirect, of the private placement broker, of a
member of the immediate family of the private placement
broker, of an associated person of the private
placement broker, or of a member of the immediate
family of such associated person.
``(4) Private placement broker defined.--In this
subsection, the term `private placement broker' means a person
that--
``(A) receives transaction-based compensation--
``(i) for effecting a transaction by--
``(I) introducing an issuer of
securities and a buyer of such
securities in connection with the sale
of a business effected as the sale of
securities; or
``(II) introducing an issuer of
securities and a buyer of such
securities in connection with the
placement of securities in transactions
that are exempt from registration
requirements under the Securities Act
of 1933; and
``(ii) that is not with respect to--
``(I) a class of publicly traded
securities;
``(II) the securities of an
investment company (as defined in
section 3 of the Investment Company Act
of 1940); or
``(III) a variable or equity-
indexed annuity or other variable or
equity-indexed life insurance product;
``(B) with respect to a transaction for which such
transaction-based compensation is received--
``(i) does not handle or take possession of
the funds or securities; and
``(ii) does not engage in an activity that
requires registration as an investment adviser
under State or Federal law; and
``(C) is not a finder as defined under subsection
(q).
``(q) Finder Safe Harbor.--
``(1) Nonregistration.--A finder is exempt from the
registration requirements of this Act.
``(2) National securities associations.--A finder shall not
be required to become a member of any national securities
association.
``(3) Finder defined.--In this subsection, the term
`finder' means a person described in paragraphs (A) and (B) of
subsection (p)(4) that--
``(A) receives transaction-based compensation of
equal to or less than $500,000 in any calendar year;
``(B) receives transaction-based compensation in
connection with transactions that result in a single
issuer selling securities valued at equal to or less
than $15 million in any calendar year;
``(C) receives transaction-based compensation in
connection with transactions that result in any
combination of issuers selling securities valued at
equal to or less than $30 million in any calendar year;
or
``(D) receives transaction-based compensation in
connection with fewer than 16 transactions that are not
part of the same offering or are otherwise unrelated in
any calendar year.''.
(b) Validity of Contracts With Registered Private Placement Brokers
and Finders.--Section 29 of the Securities Exchange Act of 1934 (15
U.S.C. 78cc) is amended by adding at the end the following:
``(d) Subsection (b) shall not apply to a contract made for a
transaction if--
``(1) the transaction is one in which the issuer engaged
the services of a broker or dealer that is not registered under
this Act with respect to such transaction;
``(2) such issuer received a self-certification from such
broker or dealer certifying that such broker or dealer is a
registered private placement broker under section 15(p) or a
finder under section 15(q); and
``(3) the issuer either did not know that such self-
certification was false or did not have a reasonable basis to
believe that such self-certification was false.''.
(c) Removal of Private Placement Brokers From Definitions of
Broker.--
(1) Records and reports on monetary instruments
transactions.--Section 5312 of title 31, United States Code, is
amended in subsection (a)(2)(G) by inserting ``with the
exception of a private placement broker as defined in section
15(p)(4) of the Securities Exchange Act of 1934 (15 U.S.C.
78o(p)(4))'' before the semicolon at the end.
(2) Securities exchange act of 1934.--Section 3(a)(4) of
the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)) is
amended by adding at the end the following:
``(G) Private placement brokers.--A private
placement broker as defined in section 15(p)(4) is not
a broker for the purposes of this Act.''.
SEC. 2103. LIMITATIONS ON STATE LAW.
Section 15(i) of the Securities Exchange Act of 1934 (15 U.S.C.
78o(i)) is amended--
(1) by redesignating paragraphs (3) and (4) as paragraphs
(4) and (5), respectively;
(2) by inserting after paragraph (2) the following:
``(3) Private placement brokers and finders.--
``(A) In general.--No State or political
subdivision thereof may enforce any law, rule,
regulation, or other administrative action that imposes
greater registration, audit, financial recordkeeping,
or reporting requirements on a private placement broker
or finder than those that are required under
subsections (p) and (q), respectively.
``(B) Definition of state.--For purposes of this
paragraph, the term `State' includes the District of
Columbia and each territory of the United States.'';
and
(3) in paragraph (4), as so redesignated, by striking
``paragraph (3)'' and inserting ``paragraph (5)''.
TITLE II--SMALL BUSINESS INVESTOR CAPITAL ACCESS
SEC. 2201. SHORT TITLE.
This title may be cited as the ``Small Business Investor Capital
Access Act''.
SEC. 2202. INFLATION ADJUSTMENT FOR THE EXEMPTION THRESHOLD FOR CERTAIN
INVESTMENT ADVISERS OF PRIVATE FUNDS.
Section 203(m) of the Investment Advisers Act of 1940 (15 U.S.C.
80b-3(m)) is amended by adding at the end the following:
``(5) Inflation adjustment.--The Commission shall adjust
the dollar amount described under paragraph (1)--
``(A) upon enactment of this paragraph, to reflect
the change in the Consumer Price Index for All Urban
Consumers published by the Bureau of Labor Statistics
of the Department of Labor between the date of
enactment of the Private Fund Investment Advisers
Registration Act of 2010 and the date of enactment of
this paragraph; and
``(B) annually thereafter, to reflect the change in
the Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics of the
Department of Labor.''.
TITLE III--IMPROVING CAPITAL ALLOCATION FOR NEWCOMERS
SEC. 2301. SHORT TITLE.
This title may be cited as the ``Improving Capital Allocation for
Newcomers Act of 2023''.
SEC. 2302. QUALIFYING VENTURE CAPITAL FUNDS.
Section 3(c)(1) of the Investment Company Act of 1940 (15 U.S.C.
80a-3(c)(1)) is amended--
(1) in the matter preceding subparagraph (A), by striking
``250 persons'' and inserting ``600 persons''; and
(2) in subparagraph (C)(i), by striking ``$10,000,000'' and
inserting ``$150,000,000''.
TITLE IV--SMALL ENTREPRENEURS' EMPOWERMENT AND DEVELOPMENT
SEC. 2401. SHORT TITLE.
This title may be cited as the ``Small Entrepreneurs' Empowerment
and Development Act of 2023'' or the ``SEED Act of 2023''.
SEC. 2402. MICRO-OFFERING EXEMPTION.
(a) In General.--Section 4 of the Securities Act of 1933 (15 U.S.C.
77d) is amended--
(1) in subsection (a), by adding at the end the following:
``(8) transactions meeting the requirements of subsection
(f).''; and
(2) by adding at the end the following:
``(f) Micro-Offerings.--The transactions referred to in subsection
(a)(8) are transactions involving the sale of securities by an issuer
(including all entities controlled by or under common control with the
issuer) where the aggregate amount of all securities sold by the
issuer, including any amount sold in reliance on the exemption provided
under subsection (a)(8), during the 12-month period preceding such
transaction, does not exceed $250,000.''.
(b) Disqualification.--
(1) In general.--Not later than 270 days after the date of
enactment of this Act, the Securities and Exchange Commission
shall, by rule, establish disqualification provisions under
which an issuer shall not be eligible to offer securities
pursuant to section 4(a)(8) of the Securities Act of 1933, as
added by this section.
(2) Inclusions.--Disqualification provisions required by
this subsection shall--
(A) be substantially similar to the provisions of
section 230.506(d) of title 17, Code of Federal
Regulations (or any successor thereto); and
(B) disqualify any offering or sale of securities
by a person that--
(i) is subject to a final order of a
covered regulator that--
(I) bars the person from--
(aa) association with an
entity regulated by the covered
regulator;
(bb) engaging in the
business of securities,
insurance, or banking; or
(cc) engaging in savings
association or credit union
activities; or
(II) constitutes a final order
based on a violation of any law or
regulation that prohibits fraudulent,
manipulative, or deceptive conduct, if
such final order was issued within the
previous 10-year period; or
(ii) has been convicted of any felony or
misdemeanor in connection with the purchase or
sale of any security or involving the making of
any false filing with the Commission.
(3) Covered regulator defined.--In this subsection, the
term ``covered regulator'' means--
(A) a State securities commission (or an agency or
officer of a State performing like functions);
(B) a State authority that supervises or examines
banks, savings associations, or credit unions;
(C) a State insurance commission (or an agency or
officer of a State performing like functions);
(D) a Federal banking agency (as defined under
section 3 of the Federal Deposit Insurance Act); and
(E) the National Credit Union Administration.
(c) Exemption Under State Regulations.--Section 18(b)(4) of the
Securities Act of 1933 (15 U.S.C. 77r(b)(4)) is amended--
(1) in subparagraph (F), by striking ``or'' at the end;
(2) in subparagraph (G), by striking the period and
inserting ``; or''; and
(3) by adding at the end the following:
``(H) section 4(a)(8).''.
TITLE V--REGULATION A+ IMPROVEMENT
SEC. 2501. SHORT TITLE.
This title may be cited as the ``Regulation A+ Improvement Act of
2023''.
SEC. 2502. JOBS ACT-RELATED EXEMPTION.
Section 3(b) of the Securities Act of 1933 (15 U.S.C. 77c(b)) is
amended--
(1) in paragraph (2)(A), by striking ``$50,000,000'' and
inserting ``$150,000,000, adjusted for inflation by the
Commission every 2 years to the nearest $10,000 to reflect the
change in the Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics''; and
(2) in paragraph (5)--
(A) by striking ``such amount as'' and inserting:
``such amount, in addition to the adjustment for
inflation provided for under such paragraph (2)(A),
as''; and
(B) by striking ``such amount, it'' and inserting
``such amount, in addition to the adjustment for
inflation provided for under such paragraph (2)(A),
it''.
TITLE VI--DEVELOPING AND EMPOWERING OUR ASPIRING LEADERS
SEC. 2601. SHORT TITLE.
This title may be cited as the ``Developing and Empowering our
Aspiring Leaders Act of 2023'' or the ``DEAL Act of 2023''.
SEC. 2602. DEFINITIONS.
Not later than the end of the 180-day period beginning on the date
of the enactment of this Act, the Securities and Exchange Commission
shall, to the extent such revisions facilitate capital formation
without compromising investor protection--
(1) revise the definition of a qualifying investment under
paragraph (c) of section 275.203(l)-1 of title 17, Code of
Federal Regulations--
(A) to include an equity security issued by a
qualifying portfolio company, whether acquired directly
from the company or in a secondary acquisition; and
(B) to specify that an investment in another
venture capital fund is a qualifying investment under
such definition; and
(2) revise paragraph (a) of such section to require, as a
condition of a private fund qualifying as a venture capital
fund under such paragraph, that the qualifying investments of
the private fund are either--
(A) predominantly qualifying investments that were
acquired directly from a qualifying portfolio company;
or
(B) predominantly qualifying investments in another
venture capital fund or other venture capital funds.
SEC. 2603. REPORTS.
(a) GAO Report.--The Comptroller General of the United States shall
issue a report to Congress on the risks and impacts of concentrated
sectoral counterparty risk in the banking sector, in light of the
failure of Silicon Valley Bank.
(b) Advocate for Small Business Capital Formation Report.--The
Advocate for Small Business Capital Formation shall issue a report to
Congress and the Securities and Exchange Commission--
(1) examining the access to banking services for venture
funds and companies funded by venture capital, in light of the
failure of Silicon Valley Bank, especially those funds and
companies located outside of the established technology and
venture capital hubs of California, Massachusetts, and New
York; and
(2) containing any policy recommendations of the Advocate.
TITLE VII--HELPING ANGELS LEAD OUR STARTUPS
SEC. 2701. SHORT TITLE.
This title may be cited as the ``Helping Angels Lead Our Startups
Act of 2023'' or the ``HALOS Act of 2023''.
SEC. 2702. CLARIFICATION OF GENERAL SOLICITATION.
(a) Definitions.--For purposes of this title and the revision of
rules required under this title:
(1) Angel investor group.--The term ``angel investor
group'' means any group that--
(A) is composed of accredited investors interested
in investing personal capital in early-stage companies;
(B) holds regular meetings and has defined
processes and procedures for making investment
decisions, either individually or among the membership
of the group as a whole; and
(C) is neither associated nor affiliated with
brokers, dealers, or investment advisers.
(2) Issuer.--The term ``issuer'' means an issuer that is a
business, is not in bankruptcy or receivership, is not an
investment company, and is not a blank check, blind pool, or
shell company.
(b) In General.--Not later than 6 months after the date of
enactment of this Act, the Securities and Exchange Commission shall
revise Regulation D of its rules (17 CFR 230.500 et seq.) to require
that in carrying out the prohibition against general solicitation or
general advertising contained in section 230.502(c) of title 17, Code
of Federal Regulations, the prohibition shall not apply to a
presentation or other communication made by or on behalf of an issuer
which is made at an event--
(1) sponsored by--
(A) the United States or any territory thereof, the
District of Columbia, any State, a political
subdivision of any State or territory, or any agency or
public instrumentality of any of the foregoing;
(B) a college, university, or other institution of
higher education;
(C) a nonprofit organization;
(D) an angel investor group;
(E) a venture forum, venture capital association,
or trade association;
(F) an incubator;
(G) an accelerator; or
(H) any other group, person, or entity as the
Securities and Exchange Commission may determine by
rule;
(2) where any advertising for the event does not reference
any specific offering of securities by the issuer;
(3) the sponsor of which--
(A) does not make investment recommendations or
provide investment advice to event attendees;
(B) does not engage in an active role in any
investment negotiations between the issuer and
investors attending the event;
(C) does not charge event attendees any fees other
than reasonable administrative fees;
(D) does not receive any compensation for making
introductions between investors attending the event and
issuers, or for investment negotiations between such
parties;
(E) makes readily available to attendees a
disclosure not longer than one page in length, as
prescribed by the Securities and Exchange Commission,
describing the nature of the event and the risks of
investing in the issuers presenting at the event; and
(F) does not receive any compensation with respect
to such event that would require registration of the
sponsor as a broker or a dealer under the Securities
Exchange Act of 1934, or as an investment advisor under
the Investment Advisers Act of 1940; and
(4) where no specific information regarding an offering of
securities by the issuer is communicated or distributed by or
on behalf of the issuer, other than--
(A) that the issuer is in the process of offering
securities or planning to offer securities;
(B) the type and amount of securities being
offered;
(C) the amount of securities being offered that
have already been subscribed for; and
(D) the intended use of proceeds of the offering.
(c) Rule of Construction.--Subsection (b) may only be construed as
requiring the Securities and Exchange Commission to amend the
requirements of Regulation D with respect to presentations and
communications, and not with respect to purchases or sales.
(d) No Pre-Existing Substantive Relationship by Reason of Event.--
Attendance at an event described under subsection (b) shall not
qualify, by itself, as establishing a pre-existing substantive
relationship between an issuer and a purchaser, for purposes of Rule
506(b).
SEC. 2703. RESTRICTIONS ON NEW FILING REQUIREMENTS IN CONNECTION WITH A
GENERAL SOLICITATION.
With respect to any offer or sale of a security under Regulation D
(17 CFR 230.500 et seq.) that is exempt from the prohibition against
general solicitation or general advertising contained in section
230.502(c) of title 17, Code of Federal Regulations, the Securities and
Exchange Commission may not issue any rule that would apply additional
filing requirements (including requirements to file information with
the Commission before or after a general solicitation or general
advertising) to a general solicitation or general advertising of such a
security that were not in effect on the date of enactment of this Act.
TITLE VIII--IMPROVING CROWDFUNDING OPPORTUNITIES
SEC. 2801. SHORT TITLE.
This title may be cited as the ``Improving Crowdfunding
Opportunities Act''.
SEC. 2802. CROWDFUNDING REVISIONS.
(a) Exemption From State Regulation.--Section 18(b)(4)(A) of the
Securities Act of 1933 (15 U.S.C. 77r(b)(4)(A)) is amended by striking
``pursuant to section'' and all that follows through the semicolon at
the end and inserting the following: ``pursuant to--
``(i) section 13 or 15(d) of the Securities
Exchange Act of 1934 (15 U.S.C. 78m, 78o(d));
or
``(ii) section 4A(b) or any regulation
issued under that section;''.
(b) Liability for Material Misstatements and Omissions.--Section
4A(c) of the Securities Act of 1933 (15 U.S.C. 77d-1(c)) is amended--
(1) by redesignating paragraph (3) as paragraph (4); and
(2) by inserting after paragraph (2) the following:
``(3) Liability of funding portals.--For the purposes of
this subsection, a funding portal, as that term is defined in
section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)), shall not be considered to be an issuer unless, in
connection with the offer or sale of a security, the funding
portal knowingly--
``(A) makes any untrue statement of a material fact
or omits to state a material fact in order to make the
statements made, in light of the circumstances under
which they are made, not misleading; or
``(B) engages in any act, practice, or course of
business which operates or would operate as a fraud or
deceit upon any person.''.
(c) Applicability of Bank Secrecy Act Requirements.--
(1) Securities act of 1933.--Section 4A(a) of the
Securities Act of 1933 (15 U.S.C. 77d-1(a)) is amended--
(A) in paragraph (11), by striking ``and'' at the
end;
(B) in paragraph (12), by striking the period at
the end and inserting ``; and''; and
(C) by adding at the end the following:
``(13) not be subject to the recordkeeping and reporting
requirements relating to monetary instruments under subchapter
II of chapter 53 of title 31, United States Code.''.
(2) Title 31, united states code.--Section 5312 of title
31, United States Code, is amended by striking subsection (c)
and inserting the following:
``(c) Additional Clarification.--The term `financial institution'
(as defined in subsection (a))--
``(1) includes any futures commission merchant, commodity
trading advisor, or commodity pool operator registered, or
required to register, under the Commodity Exchange Act (7
U.S.C. 1 et seq.); and
``(2) does not include a funding portal, as that term is
defined in section 3(a) of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a)).''.
(d) Provision of Impersonal Investment Advice and
Recommendations.--Section 3(a) of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a)) is amended--
(1) by redesignating the second paragraph (80) (relating to
funding portals) as paragraph (81); and
(2) in paragraph (81)(A), as so redesignated, by inserting
after ``recommendations'' the following: ``(other than by
providing impersonal investment advice by means of written
material, or an oral statement, that does not purport to meet
the objectives or needs of a specific individual or account)''.
(e) Target Amounts of Certain Exempted Offerings.--The Securities
and Exchange Commission shall amend paragraph (t)(1) of section 227.201
of title 17, Code of Federal Regulations so that such paragraph applies
with respect to an issuer offering or selling securities in reliance on
section 4(a)(6) of the Securities Act of 1933 (15 U.S.C. 77d(a)(6))
if--
(1) the offerings of such issuer, together with all other
amounts sold under such section 4(a)(6) within the preceding
12-month period, have, in the aggregate, a target amount of
more than $124,000 but not more than $250,000;
(2) the financial statements of such issuer that have
either been reviewed or audited by a public accountant that is
independent of the issuer are unavailable at the time of
filing; and
(3) such issuer provides a statement that financial
information certified by the principal executive officer of the
issuer has been provided instead of financial statements
reviewed by a public accountant that is independent of the
issuer.
(f) Exemption Available to Investment Companies.--Section 4A(f) of
the Securities Act of 1933 (15 U.S.C. 77d-1(f)) is amended--
(1) in paragraph (2), by inserting ``or'' after the
semicolon;
(2) by striking paragraph (3); and
(3) by redesignating paragraph (4) as paragraph (3).
(g) Non-Accredited Investor Requirements.--Section 4(a)(6) of the
Securities Act of 1933 (15 U.S.C. 77d(a)(6)) is amended--
(1) in subparagraph (A), by striking ``$1,000,000'' and
inserting ``$10,000,000''; and
(2) in subparagraph (B), by striking ``does not exceed''
and all that follows through ``more than $100,000'' and
inserting ``does not exceed 10 percent of the annual income or
net worth of such investor''.
(h) Technical Correction.--The Securities Act of 1933 (15 U.S.C.
77a et seq.) is amended--
(1) by striking the term ``section 4(6)'' each place such
term appears and inserting ``section 4(a)(6)''; and
(2) by striking the term ``section 4(6)(B)'' each place
such term appears and inserting ``section 4(a)(6)(B)''.
TITLE IX--RESTORING THE SECONDARY TRADING MARKET
SEC. 2901. SHORT TITLE.
This title may be cited as the ``Restoring the Secondary Trading
Market Act''.
SEC. 2902. EXEMPTION FROM STATE REGULATION.
Section 18(a) of the Securities Act of 1933 (15 U.S.C. 77r(b)(4))
is amended--
(1) in paragraph (2), by striking ``or'' at the end;
(2) in paragraph (3), by striking the period at the end and
inserting ``; or''; and
(3) by adding at the end the following:
``(4) shall directly or indirectly prohibit, limit, or
impose any conditions upon the off-exchange secondary trading
(as such term is defined by the Commission) in securities of an
issuer that makes current information publicly available,
including--
``(A) the information required in the periodic and
current reports described under paragraph (b) of
section 230.257 of title 17, Code of Federal
Regulations; or
``(B) the documents and information required with
respect to Tier 2 offerings, as defined in section
230.251(a) of title 17, Code of Federal Regulations.''.
DIVISION C--INCREASING ACCESS TO PRIVATE MARKETS
TITLE I--GIG WORKER EQUITY COMPENSATION
SEC. 3101. SHORT TITLE.
This title may be cited as the ``Gig Worker Equity Compensation
Act''.
SEC. 3102. EXTENSION OF RULE 701.
(a) In General.--The exemption provided under section 230.701 of
title 17, Code of Federal Regulations, shall apply to individuals
(other than employees) providing goods for sale, labor, or services for
remuneration to either an issuer or to customers of an issuer to the
same extent as such exemptions apply to employees of the issuer. For
purposes of the previous sentence, the term ``customers'' may, at the
election of an issuer, include users of the issuer's platform.
(b) Adjustment for Inflation.--The Securities and Exchange
Commission shall annually adjust the dollar figure under section
230.701(e) of title 17, Code of Federal Regulations, to reflect the
percentage change in the Consumer Price Index for All Urban Consumers
published by the Bureau of Labor Statistics of the Department of Labor.
(c) Rulemaking.--The Securities and Exchange Commission--
(1) shall revise section 230.701 of title 17, Code of
Federal Regulations, to reflect the requirements of this
section; and
(2) may not revise such section 230.701 in any manner that
would have the effect of restricting access to equity
compensation for employees or individuals described under
subsection (a).
SEC. 3103. PREEMPTION OF CERTAIN PROVISIONS OF STATE LAW.
Any provision of a State law with respect to wage rates or benefits
that creates a presumption that an individual providing goods for sale,
labor, or services for remuneration for a person is an employee of such
person under such law is preempted.
SEC. 3104. GAO STUDY.
Not later than the end of the 3-year period beginning on the date
of enactment of this Act, the Comptroller General of the United States
shall carry out a study on the effects of this title and submit a
report on such study to the Congress.
TITLE II--INVESTMENT OPPORTUNITY EXPANSION
SEC. 3201. SHORT TITLE.
This title may be cited as the ``Investment Opportunity Expansion
Act''.
SEC. 3202. INVESTMENT THRESHOLDS TO QUALIFY AS AN ACCREDITED INVESTOR.
Section 2(a)(15) of the Securities Act of 1933 (15 U.S.C.
77b(a)(15)) is amended--
(1) by striking ``(15) The term `accredited investor' shall
mean--'' and inserting the following:
``(15) Accredited investor.--
``(A) In general.--The term `accredited investor'
means--'';
(2) in clause (i), by striking ``or'' at the end; and
(3) by adding at the end the following:
``(iii) with respect to a proposed transaction, any
individual whose aggregate investment, at the
completion of such transaction, in securities with
respect to which there has not been a public offering
is not more than 10 percent of the greater of--
``(I) the net assets of the individual; or
``(II) the annual income of the
individual;''.
TITLE III--RISK DISCLOSURE AND INVESTOR ATTESTATION
SEC. 3301. SHORT TITLE.
This title may be cited as the ``Risk Disclosure and Investor
Attestation Act''.
SEC. 3302. INVESTOR ATTESTATION.
(a) In General.--Section 2(a)(15) of the Securities Act of 1933 (15
U.S.C. 77b(a)(15)), as amended by section 3202, is further amended by
adding at the end the following:
``(iv) with respect to an issuer, any
individual that has attested to the issuer that
the individual understands the risks of
investment in private issuers, using such form
as the Commission shall establish, by rule, but
which form may not be longer than 2 pages in
length; or''.
(b) Rulemaking.--Not later than the end of the 1-year period
beginning on the date of enactment of this Act, the Securities and
Exchange Commission shall issue rules to carry out the amendments made
by subsection (a), including establishing the form required under such
amendments.
TITLE IV--INCREASING INVESTOR OPPORTUNITIES
SEC. 3401. SHORT TITLE.
This title may be cited as the ``Increasing Investor Opportunities
Act''.
SEC. 3402. CLOSED-END COMPANY AUTHORITY TO INVEST IN PRIVATE FUNDS.
(a) In General.--Section 5 of the Investment Company Act of 1940
(15 U.S.C. 80a-5) is amended by adding at the end the following:
``(d) Closed-End Company Authority To Invest in Private Funds.--
``(1) In general.--Except as otherwise prohibited or
restricted by this Act (or any rule issued under this Act), the
Commission may not limit a closed-end company from investing
any or all of the company's assets in private funds solely or
primarily because of the private funds' status as private
funds.
``(2) Application.--Notwithstanding section 6(f), this
subsection shall also apply to a closed-end company that elects
to be treated as a business development company.''.
(b) Definition of Private Fund.--
(1) Investment company act of 1940.--Section 2(a) of the
Investment Company Act of 1940 (15 U.S.C. 80a-2(a)) is amended
by adding at the end the following:
``(55) The term `private fund' means an issuer that would
be an investment company but for paragraph (1) or (7) of
section 3(c).''.
(2) Investment advisers act of 1940.--The first paragraph
(29) (relating to ``private fund'') of section 202(a) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)) is amended
to read as follows:
``(29) The term `private fund' has the meaning given that
term under section 2(a) of the Investment Company Act of
1940.''.
(c) Treatment by National Securities Exchanges.--Section 6(b) of
the Securities Exchange Act of 1934 (15 U.S.C. 78f(b)) is amended by
adding at the end the following:
``(11)(A) The rules of the exchange do not prohibit the
listing or trading of securities of a closed-end company solely
or primarily by reason of the amount of the company's
investment of assets in private funds.
``(B) In this paragraph--
``(i) the term `closed-end company' has the meaning
given that term under section 5(a) of the Investment
Company Act of 1940, and includes a closed-end company
that elects to be treated as a business development
company under section 6(f) of such Act; and
``(ii) the term `private fund' has the meaning
given that term under section 2(a) of the Investment
Company Act of 1940.''.
(d) Investment Limitation.--Section 3(c) of the Investment Company
Act of 1940 (15 U.S.C. 80a-3(c)) is amended--
(1) in paragraph (1), by striking ``subparagraphs (A)(i)
and (B)(i)'' and inserting ``subparagraphs (A)(i), (B)(i), and
(C)''; and
(2) in paragraph (7)(D), by striking ``subparagraphs (A)(i)
and (B)(i)'' and inserting ``subparagraphs (A)(i), (B)(i), and
(C)''.
TITLE V--ACCREDITED INVESTORS INCLUDE INDIVIDUALS RECEIVING ADVICE FROM
CERTAIN PROFESSIONALS
SEC. 3501. ACCREDITED INVESTORS INCLUDE INDIVIDUALS RECEIVING ADVICE
FROM CERTAIN PROFESSIONALS.
(a) Securities Act of 1933.--Section 2(a)(15) of the Securities Act
of 1933 (15 U.S.C. 77b(a)(15)), as amended by sections 3202 and 3302,
is further amended by adding at the end the following:
``(v) any individual receiving
individualized investment advice or
individualized investment recommendations with
respect to the applicable transaction from an
individual described under section
203.501(a)(10) of title 17, Code of Federal
Regulations.
``(B) Definitions.--In subparagraph (A)(v):
``(i) Investment advice.--The term
`investment advice' shall be interpreted
consistently with the interpretation of the
phrase `engages in the business of advising
others, either directly or through publications
or writings, as to the value of securities or
as to the advisability of investing in,
purchasing, or selling securities' under
section 202(a)(11) of the Investment Advisers
Act of 1940 (15 U.S.C. 80b-2(a)(11)).
``(ii) Investment recommendation.--The term
`investment recommendation' shall be
interpreted consistently with the
interpretation of the term `recommendation'
under section 240.15l-1 of title 17, Code of
Federal Regulations.''.
(b) Conforming Changes to Regulations.--The Securities and Exchange
Commission shall revise section 203.501(a) of title 17, Code of Federal
Regulations, and any other definition of ``accredited investor'' in a
rule of the Commission in the same manner as such definition is revised
under subsection (a).
TITLE VI--RETIREMENT FAIRNESS FOR CHARITIES AND EDUCATIONAL
INSTITUTIONS
SEC. 3601. SHORT TITLE.
This title may be cited as the ``Retirement Fairness for Charities
and Educational Institutions Act of 2023''.
SEC. 3602. ENHANCEMENT OF 403(B) PLANS.
(a) Amendments to the Investment Company Act of 1940.--Section
3(c)(11) of the Investment Company Act of 1940 (15 U.S.C. 80a-3(c)(11))
is amended to read as follows:
``(11) Any--
``(A) employee's stock bonus, pension, or profit-
sharing trust which meets the requirements for
qualification under section 401 of the Internal Revenue
Code of 1986;
``(B) custodial account meeting the requirements of
section 403(b)(7) of such Code;
``(C) governmental plan described in section
3(a)(2)(C) of the Securities Act of 1933;
``(D) collective trust fund maintained by a bank
consisting solely of assets of one or more--
``(i) trusts described in subparagraph (A);
``(ii) government plans described in
subparagraph (C);
``(iii) church plans, companies, or
accounts that are excluded from the definition
of an investment company under paragraph (14)
of this subsection; or
``(iv) plans which meet the requirements of
section 403(b) of the Internal Revenue Code of
1986 if--
``(I) such plan is subject to title
I of the Employee Retirement Income
Security Act of 1974 (29 U.S.C. 1001 et
seq.);
``(II) any employer making such
plan available agrees to serve as a
fiduciary for the plan with respect to
the selection of the plan's investments
among which participants can choose; or
``(III) such plan is a governmental
plan (as defined in section 414(d) of
such Code); or
``(E) separate account the assets of which are
derived solely from--
``(i) contributions under pension or
profit-sharing plans which meet the
requirements of section 401 of the Internal
Revenue Code of 1986 or the requirements for
deduction of the employer's contribution under
section 404(a)(2) of such Code;
``(ii) contributions under governmental
plans in connection with which interests,
participations, or securities are exempted from
the registration provisions of section 5 of the
Securities Act of 1933 by section 3(a)(2)(C) of
such Act;
``(iii) advances made by an insurance
company in connection with the operation of
such separate account; and
``(iv) contributions to a plan described in
subparagraph (D)(iv).''.
(b) Amendments to the Securities Act of 1933.--Section 3(a)(2) of
the Securities Act of 1933 (15 U.S.C. 77c(a)(2)) is amended--
(1) by striking ``or (D)'' and inserting ``(D) a plan which
meets the requirements of section 403(b) of such Code if (i)
such plan is subject to title I of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1001 et seq.), (ii) any
employer making such plan available agrees to serve as a
fiduciary for the plan with respect to the selection of the
plan's investments among which participants can choose, or
(iii) such plan is a governmental plan (as defined in section
414(d) of such Code); or (E)'';
(2) by striking ``(C), or (D)'' and inserting ``(C), (D),
or (E)''; and
(3) by striking ``(iii) which is a plan funded'' and
inserting ``(iii) in the case of a plan not described in
subparagraph (D), which is a plan funded''.
(c) Amendments to the Securities Exchange Act of 1934.--Section
3(a)(12)(C) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a)(12)(C)) is amended--
(1) by striking ``or (iv)'' and inserting ``(iv) a plan
which meets the requirements of section 403(b) of such Code if
(I) such plan is subject to title I of the Employee Retirement
Income Security Act of 1974 (29 U.S.C. 1001 et seq.), (II) any
employer making such plan available agrees to serve as a
fiduciary for the plan with respect to the selection of the
plan's investments among which participants can choose, or
(III) such plan is a governmental plan (as defined in section
414(d) of such Code), or (v)'';
(2) by striking ``(ii), or (iii)'' and inserting ``(ii),
(iii), or (iv)''; and
(3) by striking ``(II) is a plan funded'' and inserting
``(II) in the case of a plan not described in clause (iv), is a
plan funded''.
<all>
Considered as unfinished business. (consideration: CR H1038-1048)
The House resolved into Committee of the Whole House on the state of the Union for further consideration.
DEBATE - Pursuant to the provisions of H. Res. 1052, the Committee of the Whole proceeded with 10 minutes of debate on the Houlahan amendment No. 6.
POSTPONED PROCEEDINGS - At the conclusion of debate on the Houlahan amendment No. 6, the Chair put the question on agreeing to the amendment and by voice vote, announced the noes had prevailed. Ms. Houlahan demanded a recorded vote, and the Chair postponed further proceedings until a time to be announced.
DEBATE - Pursuant to the provisions of H. Res. 1052, the Committee of the Whole proceeded with 10 minutes of debate on the Tlaib amendment No. 7.
POSTPONED PROCEEDINGS - At the conclusion of debate on the Tlaib amendment No. 7, the Chair put the question on agreeing to the amendment and by voice vote, announced the noes had prevailed. Ms. Tlaib demanded a recorded vote, and the Chair postponed further proceedings until a time to be announced.
DEBATE - Pursuant to the provisions of H. Res. 1052, the Committee of the Whole proceeded with 10 minutes of debate on the Lynch amendment No. 8.
POSTPONED PROCEEDINGS - At the conclusion of debate on the Lynch amendment No. 8, the Chair put the question on agreeing to the amendment and by voice vote, announced the noes had prevailed. Mr. Lynch demanded a recorded vote, and the Chair postponed further proceedings until a time to be announced.
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DEBATE - Pursuant to the provisions of H. Res. 1052, the Committee of the Whole proceeded with 10 minutes of debate on the Waters amendment No. 9.
POSTPONED PROCEEDINGS - At the conclusion of debate on the Waters amendment No. 9, the Chair put the question on agreeing to the amendment and by voice vote, announced that the noes had prevailed. Ms. Waters demanded a recorded vote and the Chair postponed further proceedings until a time to be announced.
The House rose from the Committee of the Whole House on the state of the Union to report H.R. 2799.
The previous question was ordered pursuant to the rule.
The House adopted the amendments en gross as agreed to by the Committee of the Whole House on the state of the Union.
Ms. Houlahan moved to recommit to the Committee on Financial Services. (text: CR H1040, H1046)
The previous question on the motion to recommit was ordered pursuant to clause 2(b) of rule XIX.
On motion to recommit Failed by the Yeas and Nays: 205 - 213 (Roll no. 77).
Roll Call #77 (House)Passed/agreed to in House: On passage Passed by recorded vote: 212 - 205 (Roll no. 78).
Roll Call #78 (House)On passage Passed by recorded vote: 212 - 205 (Roll no. 78).
Roll Call #78 (House)Motion to reconsider laid on the table Agreed to without objection.
Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.