<enum>I</enum> <header>Accelerating Access to Capital</header> <section id="H67862B6E26904F718B6D9199E117ACAE"> <enum>1.</enum> <header>Expanded eligibility for use of Form S–3</header> <text display-inline="no-display-inline">Not later than 45 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise Form S–3—</text> <paragraph id="HB74AA67C30A44F25A68B12ED42E4D169"> <enum>(1)</enum> <text>so as to permit securities to be registered pursuant to General Instruction I.B.1. of such form provided that either—</text> <subparagraph id="H323105697CAE4FEC9A92DF8622C459AA"> <enum>(A)</enum> <text display-inline="yes-display-inline">the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant is $75,000,000 or more; or</text> </subparagraph> <subparagraph id="H9F530EEE3DE5453197B350389A5061E3"> <enum>(B)</enum> <text display-inline="yes-display-inline">the registrant has at least one class of common equity securities listed and registered on a national securities exchange; and</text> </subparagraph> </paragraph> <paragraph id="HECFB16CEC8E1466091FC1224CBA41BB1"> <enum>(2)</enum> <text>so as to remove the requirement of paragraph (c) from General Instruction I.B.6. of such form.</text> </paragraph> </section>

L:\XML\CPRT-114-HPRT-RU00-HR2357.XML

XML

mchinn

8/29/2016 14:43

mchinn

07/08/2016 13:56

L:\vr\082916\R082916.002.xml

08/29/2016 14:44:04

mchinn

x:\xx\xxxxxx\xxxxxx.xxx.xml

xx/xx/xxxx xx:xx:xx xx

mchinn

[Discussion Draft]

August 29, 2016

114th CONGRESS 2d Session

Rules Committee Print 114-62

Text of H.R. 2357, Accelerating Access to Capital Act of 2015

[Showing the text of H.R. 2357 as reported, and H.R. 4850 and H.R. 4852 as ordered reported; all by the Committee on Financial Services.]

Short title

This Act may be cited as the

Accelerating Access to Capital Act of 2016

<enum>I</enum> <header>Accelerating Access to Capital</header> <section id="H67862B6E26904F718B6D9199E117ACAE"> <enum>1.</enum> <header>Expanded eligibility for use of Form S–3</header> <text display-inline="no-display-inline">Not later than 45 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise Form S–3—</text> <paragraph id="HB74AA67C30A44F25A68B12ED42E4D169"> <enum>(1)</enum> <text>so as to permit securities to be registered pursuant to General Instruction I.B.1. of such form provided that either—</text> <subparagraph id="H323105697CAE4FEC9A92DF8622C459AA"> <enum>(A)</enum> <text display-inline="yes-display-inline">the aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant is $75,000,000 or more; or</text> </subparagraph> <subparagraph id="H9F530EEE3DE5453197B350389A5061E3"> <enum>(B)</enum> <text display-inline="yes-display-inline">the registrant has at least one class of common equity securities listed and registered on a national securities exchange; and</text> </subparagraph> </paragraph> <paragraph id="HECFB16CEC8E1466091FC1224CBA41BB1"> <enum>(2)</enum> <text>so as to remove the requirement of paragraph (c) from General Instruction I.B.6. of such form.</text> </paragraph> </section> <enum>II</enum> <header>Micro-offering Safe Harbor</header> <section id="HFF15E8F6B71D471D9E9C00C6D03F7571"> <enum>2.</enum> <header>Exemptions for micro-offerings</header> <subsection id="H9DF9B3F1D502419580C2A22F6D03AFFC"> <enum>(a)</enum> <header>In general</header> <text display-inline="yes-display-inline">Section 4 of the Securities Act of 1933 (15 U.S.C. 77d) is amended—</text> <paragraph id="HB73BA8F1A7424086904231E78F8805A7"> <enum>(1)</enum> <text>in subsection (a), by adding at the end the following:</text> <quoted-block display-inline="no-display-inline" id="H6E15C476D7194157B48FC6FED674FA72" style="OLC"> <paragraph id="HC5DA78B40418479CB14BCDEAFB8EC95B"> <enum>(8)</enum> <text display-inline="yes-display-inline">transactions meeting the requirements of subsection (f).</text> </paragraph> <after-quoted-block>; and</after-quoted-block> </quoted-block> </paragraph> <paragraph id="H1FE3E2421A8E4415A6ACBD49DBE3CE79"> <enum>(2)</enum> <text>by adding at the end the following:</text> <quoted-block display-inline="no-display-inline" id="HDAC1C5D4B9C7458A9214FC2D87FEFE84" style="OLC"> <subsection id="HD3BBA12B4874416DAEAA3ACD2B6516F0"> <enum>(f)</enum> <header>Certain micro-Offerings</header> <paragraph id="H3D5EA6121B4E4BCC8045FFDA5AB445C5"> <enum>(1)</enum> <header>In general</header> <text>Except as provided in paragraph (2), 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) that meet all of the following requirements:</text> <subparagraph id="H0A188D54103842EDB446EC586CFFCF14"> <enum>(A)</enum> <header>Pre-existing relationship</header> <text>Each purchaser has a substantive pre-existing relationship with an officer of the issuer, a director of the issuer, or a shareholder holding 10 percent or more of the shares of the issuer.</text> </subparagraph> <subparagraph id="H6E90D09B1F5A4373ADF02A485E9A2BCF"> <enum>(B)</enum> <header>35 or fewer purchasers</header> <text>There are no more than, or the issuer reasonably believes that there are no more than, 35 purchasers of securities from the issuer that are sold in reliance on the exemption provided under subsection (a)(8) during the 12-month period preceding such transaction.</text> </subparagraph> <subparagraph id="HB3712BD296CA406996D74A3885443133"> <enum>(C)</enum> <header>Small offering amount</header> <text>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 $500,000.</text> </subparagraph> </paragraph> <paragraph id="H01F24229E134431DBBE503C441DB1A06"> <enum>(2)</enum> <header>Disqualification</header> <subparagraph id="HA2A5C6467C65454E85CB1FDEAD0E53CD"> <enum>(A)</enum> <header>In general</header> <text>The exemption provided under subsection (a)(8) shall not be available for a transaction involving a sale of securities if any person described in subparagraph (B) would have triggered disqualification pursuant to section 230.506(d) of title 17, Code of Federal Regulations.</text> </subparagraph> <subparagraph id="H89B5AE5BC76E4146ADA745CAF705713E"> <enum>(B)</enum> <header>Persons described</header> <text>The persons described in this subparagraph are the following:</text> <clause id="H3A2F6F99A47243E4B739BD78F8B276D3"> <enum>(i)</enum> <text>The issuer.</text> </clause> <clause id="HD0E4E7A287AE4FB2B4D0168C53550593"> <enum>(ii)</enum> <text>Any predecessor of the issuer.</text> </clause> <clause id="H27A8FE8305AB42A8A095943886FB7FB5"> <enum>(iii)</enum> <text>Any affiliated issuer.</text> </clause> <clause id="H5E99CA6549AF41A28D91AE97289A7C7E"> <enum>(iv)</enum> <text>Any director, executive officer, other officer participating in the offering, general partner, or managing member of the issuer.</text> </clause> <clause id="HAA0DD93ECBE44EF2BB8B79DC3C4D4205"> <enum>(v)</enum> <text>Any beneficial owner of 20 percent or more of the issuer’s outstanding voting equity securities, calculated on the basis of voting power.</text> </clause> <clause id="HA613712E53604440B4FE7AA5F3474741"> <enum>(vi)</enum> <text>Any promoter connected with the issuer in any capacity at the time of such sale.</text> </clause> <clause id="HD03AF268EC85459298B3694719BD085E"> <enum>(vii)</enum> <text>Any investment manager of an issuer that is a pooled investment fund.</text> </clause> <clause id="H9557CCDABD4B4945A2FB744BA769B4E3"> <enum>(viii)</enum> <text>Any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with such sale of securities.</text> </clause> <clause id="HD9B44788237B4722ACF89AC5DCCB1A0B"> <enum>(ix)</enum> <text>Any general partner or managing member of any such investment manager or solicitor.</text> </clause> <clause id="H6C1998357F0E4A37A4C58FBAF3613D45"> <enum>(x)</enum> <text>Any director, executive officer, or other officer participating in the offering of any such investment manager or solicitor or general partner or managing member of such investment manager or solicitor.</text> </clause> </subparagraph> </paragraph> </subsection> <after-quoted-block>.</after-quoted-block> </quoted-block> </paragraph> </subsection> <subsection id="HEC9F5492C14F4AF58C321138D01E39CB"> <enum>(b)</enum> <header>Exemption under State regulations</header> <text display-inline="yes-display-inline">Section 18(b)(4) of the Securities Act of 1933 (15 U.S.C. 77r(b)(4)) is amended—</text> <paragraph id="H8A245AA379744358927A3422D267E552"> <enum>(1)</enum> <text>in subparagraph (F), by striking <quote>or</quote> at the end;</text> </paragraph> <paragraph id="H7148546A06234F08ACC57734827E3B17"> <enum>(2)</enum> <text>in subparagraph (G), by striking the period and inserting <quote>; or</quote>; and</text> </paragraph> <paragraph id="H84684AF52D564B5DBB003091A6734A7B"> <enum>(3)</enum> <text>by adding at the end the following:</text> <quoted-block display-inline="no-display-inline" id="H1D91361A595F4ADE872835032972EC60" style="OLC"> <subparagraph id="HC2CC465287CE4E6F817426C75D116283"> <enum>(H)</enum> <text display-inline="yes-display-inline">section 4(a)(8).</text> </subparagraph> <after-quoted-block>.</after-quoted-block> </quoted-block> </paragraph> </subsection> </section> <enum>III</enum> <header>Private Placement Improvement </header> <section id="H892182FB83A5441B988AAC91CDB7EDBA"> <enum>3.</enum> <header>Revisions to SEC Regulation D</header> <text display-inline="no-display-inline">Not later than 45 days following the date of the enactment of this Act, the Securities and Exchange Commission shall revise Regulation D (17 C.F.R. 501 et seq.) in accordance with the following:</text> <paragraph id="H65B327AC2FDB437A985B289FE3A4D2C7"> <enum>(1)</enum> <text display-inline="yes-display-inline">The Commission shall revise Form D filing requirements to require an issuer offering or selling securities in reliance on an exemption provided under Rule 506 of Regulation D to file with the Commission a single notice of sales containing the information required by Form D for each new offering of securities no earlier than 15 days after the date of the first sale of securities in the offering. The Commission shall not require such an issuer to file any notice of sales containing the information required by Form D except for the single notice described in the previous sentence.</text> </paragraph> <paragraph id="H05E4841A97AD4F3B8C6383BB8FAD1705"> <enum>(2)</enum> <text>The Commission shall make the information contained in each Form D filing available to the securities commission (or any agency or office performing like functions) of each State and territory of the United States and the District of Columbia.</text> </paragraph> <paragraph id="HE3F830EB4AC1409E8667D70C8B757C49"> <enum>(3)</enum> <text display-inline="yes-display-inline">The Commission shall not condition the availability of any exemption for an issuer under Rule 506 of Regulation D (17 C.F.R. 230.506) on the issuer’s or any other person’s filing with the Commission of a Form D or any similar report.</text> </paragraph> <paragraph id="H9CBA6405A9484F829F2B817DA917BE21"> <enum>(4)</enum> <text display-inline="yes-display-inline">The Commission shall not require issuers to submit written general solicitation materials to the Commission in connection with a Rule 506(c) offering, except when the Commission requests such materials pursuant to the Commission’s authority under section 8A or section 20 of the Securities Act of 1933 (15 U.S.C. 77h–1 or 77t) or section 9, 10(b), 21A, 21B, or 21C of the Securities Exchange Act of 1934 (15 U.S.C. 78i, 78j(b), 78u–1, 78u–2, or 78u–3).</text> </paragraph> <paragraph id="H2B9143560A7643BBBA161BF4FB98CD66"> <enum>(5)</enum> <text display-inline="yes-display-inline">The Commission shall not extend the requirements contained in Rule 156 to private funds.</text> </paragraph> <paragraph id="H4C88D87F540B4FF69C75CBE195666ECE"> <enum>(6)</enum> <text display-inline="yes-display-inline">The Commission shall revise Rule 501(a) of Regulation D to provide that a person who is a <quote>knowledgeable employee</quote> of a private fund or the fund’s investment adviser, as defined in Rule 3c–5(a)(4) (17 C.F.R. 270.3c–5(a)(4)), shall be an accredited investor for purposes of a Rule 506 offering of a private fund with respect to which the person is a knowledgeable employee.</text> </paragraph> </section>