Text: S.588 — 115th Congress (2017-2018)All Information (Except Text)

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Introduced in Senate (03/09/2017)


115th CONGRESS
1st Session
S. 588


To require the Securities and Exchange Commission to clarify what constitutes a general solicitation under the Federal securities laws, and for other purposes.


IN THE SENATE OF THE UNITED STATES

March 9, 2017

Mr. Murphy (for himself, Mr. Thune, Mr. Schatz, Mr. Toomey, and Ms. Heitkamp) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs


A BILL

To require the Securities and Exchange Commission to clarify what constitutes a general solicitation under the Federal securities laws, 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.

This Act may be cited as the “Helping Angels Lead Our Startups Act” or the “HALOS Act”.

SEC. 2. Definition.

In this Act, the term “angel investor group” means a group that—

(1) is composed of accredited investors interested in investing in personal capital in early-stage companies;

(2) holds regular meetings;

(3) with respect to either the individual investors that constitute the group or the group as a whole, has defined processes and procedures for making investment decisions; and

(4) is not associated with a broker, a dealer, or an investment adviser.

SEC. 3. Clarification of general solicitation.

(a) In general.—Not later than 180 days after the date of enactment of this Act, the Securities and Exchange Commission shall amend sections 230.500 through 230.508 of title 17, Code of Federal Regulations, so that the prohibition against general solicitation and general advertising under section 230.502(c) of title 17, Code of Federal Regulations, shall not apply with respect to a presentation or another form of communication that is made—

(1) by or on behalf of an issuer; and

(2) at an event—

(A) that is sponsored by—

(i) the United States;

(ii) a State;

(iii) a political subdivision of a State;

(iv) an agency or public instrumentality of an entity described in clauses (i) through (iii);

(v) a college, university, or other institution of higher learning;

(vi) a nonprofit organization;

(vii) an angel investor group;

(viii) a venture forum, venture capital association, or trade association; or

(ix) any other group or person that the Commission may determine, by rule;

(B) where no advertising for the event references any specific offering of securities by the issuer;

(C) the sponsor of which does not—

(i) make investment recommendations or provide investment advice to the attendees of the event;

(ii) engage in an active role with respect to investment negotiations between the issuer and any investors attending the event;

(iii) charge attendees of the event any fees other than administrative fees; and

(iv) receive compensation with respect to the event that would require the sponsor to register as—

(I) a broker or a dealer under the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.); or

(II) an investment adviser under the Investment Advisers Act of 1940 (15 U.S.C. 80b–1 et seq.); and

(D) 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—

(i) that the issuer is—

(I) in the process of offering securities; or

(II) planning to offer securities;

(ii) the type and amount of securities being offered;

(iii) the amount of securities being offered that have been subscribed for, as of the date of the event; and

(iv) the intended use of any proceeds from the offering.

(b) Rule of construction.—Subsection (a)—

(1) shall be construed to require the Securities and Exchange Commission to amend sections 230.500 through 230.508 of title 17, Code of Federal Regulations, with respect to presentations and communications; and

(2) may not be construed to require the Securities and Exchange Commission to amend sections 230.500 through 230.508 of title 17, Code of Federal Regulations, with respect to purchases or sales.


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