[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2799 Reported in House (RH)]
<DOC>
Union Calendar No. 112
118th CONGRESS
1st Session
H. R. 2799
[Report No. 118-143, Part I]
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
July 17, 2023
Reported from the Committee on Financial Services with an amendment
[Strike out all after the enacting clause and insert the part printed
in italic]
July 17, 2023
Committee on Education and the Workforce discharged; committed to the
Committee of the Whole House on the State of the Union and ordered to
be printed
[For text of introduced bill, see copy of bill as introduced on April
24, 2023]
_______________________________________________________________________
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--HELPING STARTUPS CONTINUE TO GROW
Sec. 1201. Short title.
Sec. 1202. Emerging growth company criteria.
TITLE III--SEC AND PCAOB AUDITOR REQUIREMENTS FOR NEWLY PUBLIC
COMPANIES
Sec. 1301. Auditor independence for certain past audits occurring
before an issuer is a public company.
TITLE IV--EXPAND THE PROTECTION FOR RESEARCH REPORTS TO COVER ALL
SECURITIES OF ALL ISSUERS
Sec. 1401. Provision of research.
TITLE V--EXCLUDE QIBS AND IAAS FROM THE RECORD HOLDER COUNT FOR
MANDATORY REGISTRATION
Sec. 1501. Exclusions from mandatory registration threshold.
TITLE VI--EXPAND WKSI ELIGIBILITY
Sec. 1601. Definition of well-known seasoned issuer.
TITLE VII--SMALLER REPORTING COMPANY, ACCELERATED FILER, AND LARGE
ACCELERATED FILER THRESHOLDS
Sec. 1701. 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--IMPROVING CROWDFUNDING OPPORTUNITIES
Sec. 2701. Short title.
Sec. 2702. Crowdfunding revisions.
TITLE VIII--RESTORING THE SECONDARY TRADING MARKET
Sec. 2801. Short title.
Sec. 2802. 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--ACCREDITED INVESTORS INCLUDE INDIVIDUALS RECEIVING ADVICE
FROM CERTAIN PROFESSIONALS
Sec. 3401. Accredited investors include individuals receiving advice
from certain professionals.
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--HELPING STARTUPS CONTINUE TO GROW
SEC. 1201. SHORT TITLE.
This title may be cited as the ``Helping Startups Continue To Grow
Act''.
SEC. 1202. 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 III--SEC AND PCAOB AUDITOR REQUIREMENTS FOR NEWLY PUBLIC
COMPANIES
SEC. 1301. 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 IV--EXPAND THE PROTECTION FOR RESEARCH REPORTS TO COVER ALL
SECURITIES OF ALL ISSUERS
SEC. 1401. 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 V--EXCLUDE QIBS AND IAAS FROM THE RECORD HOLDER COUNT FOR
MANDATORY REGISTRATION
SEC. 1501. 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 VI--EXPAND WKSI ELIGIBILITY
SEC. 1601. 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 VII--SMALLER REPORTING COMPANY, ACCELERATED FILER, AND LARGE
ACCELERATED FILER THRESHOLDS
SEC. 1701. 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;
and
``(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 $15,000,000 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 $30,000,000 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--IMPROVING CROWDFUNDING OPPORTUNITIES
SEC. 2701. SHORT TITLE.
This title may be cited as the ``Improving Crowdfunding
Opportunities Act''.
SEC. 2702. 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)'';
(2) by striking the term ``section 4(6)(B)'' each place
such term appears and inserting ``section 4(a)(6)(B)''; and
(3) in section 4A(f), by striking ``Section 4(6)'' and
inserting ``Section 4(a)(6)''.
TITLE VIII--RESTORING THE SECONDARY TRADING MARKET
SEC. 2801. SHORT TITLE.
This title may be cited as the ``Restoring the Secondary Trading
Market Act''.
SEC. 2802. EXEMPTION FROM STATE REGULATION.
Section 18(a) of the Securities Act of 1933 (15 U.S.C. 77r(a)) 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;
(3) in clause (ii), by striking the period at the end and
inserting a semicolon; and
(4) 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--ACCREDITED INVESTORS INCLUDE INDIVIDUALS RECEIVING ADVICE
FROM CERTAIN PROFESSIONALS
SEC. 3401. 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).
Union Calendar No. 112
118th CONGRESS
1st Session
H. R. 2799
[Report No. 118-143, Part I]
_______________________________________________________________________
A BILL
To make reforms to the capital markets of the United States, and for
other purposes.
_______________________________________________________________________
July 17, 2023
Reported from the Committee on Financial Services with an amendment
July 17, 2023
Committee on Education and the Workforce discharged; committed to the
Committee of the Whole House on the State of the Union and ordered to
be printed