S.1031 - Crowdfunding Enhancement Act115th Congress (2017-2018)
|Sponsor:||Sen. Daines, Steve [R-MT] (Introduced 05/03/2017)|
|Committees:||Senate - Banking, Housing, and Urban Affairs|
|Latest Action:||Senate - 05/03/2017 Read twice and referred to the Committee on Banking, Housing, and Urban Affairs. (All Actions)|
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Summary: S.1031 — 115th Congress (2017-2018)All Information (Except Text)
Introduced in Senate (05/03/2017)
Crowdfunding Enhancement Act
This bill amends the Securities Act of 1933 to allow a crowdfunding issuer to sell shares through a crowdfunding vehicle. (Crowdfunding is a method of capital formation in which groups of people pool money either to invest in a company or to support an effort by others to accomplish a specific goal.)
A "crowdfunding vehicle" is a company that:
- has purposes limited to acquiring, holding, and disposing securities issued by a single company;
- issues only one class of securities;
- receives no compensation for such acquisition, holding, or disposition of securities; and
- meets other specified requirements, including those related to disclosure obligations and the use of investment advisers.
The bill amends the Securities Exchange Act of 1934 to revise the conditions upon which the Securities and Exchange Commission (SEC) shall exempt securities issued in crowdfunding transactions from SEC registration requirements.
Under current law, holders of crowdfunded shares do not count toward the shareholder threshold beyond which an issuer is required to register its securities with the SEC, provided that the issuer: (1) is current in its annual reporting obligations, (2) retains the services of a registered transfer agent, and (3) has less than $25 million in assets. The bill maintains this exemption but removes and replaces the conditions upon which it applies. Specifically, holders of crowdfunded shares shall not count toward the shareholder threshold if the issuer has: (1) a public float of less than $75 million, and (2) annual revenues of less than $50 million.