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114-HR4855 Fix Crowdfunding Act (view source)
Revision as of 16:16, 5 April 2017
, 16:16, 5 April 2017Created page with "{{Legislation |Has title=114-HR4855 Fix Crowdfunding Act |Proposed in=114 |Sponsored by=Rep. McHenry, Patrick T. (R-NC-10) |Reviewing committee=House Financial Services |Has b..."
{{Legislation
|Has title=114-HR4855 Fix Crowdfunding Act
|Proposed in=114
|Sponsored by=Rep. McHenry, Patrick T. (R-NC-10)
|Reviewing committee=House Financial Services
|Has bill status=Died
|Has keywords=McCarthy
}}
(Sec. 2) 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, typically composed of small individual contributions, and often via Internet platforms, 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 in one or more transactions and made pursuant to crowdfunding exemption transaction requirements;
issues only one class of securities;
receives no compensation for such acquisition, holding, or disposition of securities;
is a co-issuer with the company whose securities it holds; and
meets specified requirements related to disclosure obligations and the use of investment advisers.
(Sec. 3) 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.
==Bill Text==
Congressional Bills 114th Congress
From the U.S. Government Publishing Office
H.R. 4855 Received in Senate (RDS)
114th CONGRESS
2d Session
H. R. 4855
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 6, 2016
Received
_______________________________________________________________________
AN ACT
To amend provisions in the securities laws relating to regulation
crowdfunding to raise the dollar amount limit and to clarify certain
requirements and exclusions for funding portals established by such
Act.
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 ``Fix Crowdfunding Act''.
SEC. 2. CROWDFUNDING VEHICLES.
(a) Amendments to the Securities Act of 1933.--The Securities Act
of 1933 (15 U.S.C. 77a et seq.) is amended--
(1) in section 4A(f)(3), by inserting ``by any of
paragraphs (1) through (14) of'' before ``section 3(c)''; and
(2) in section 4(a)(6)(B), by inserting after ``any
investor'' the following: ``, other than a crowdfunding vehicle
(as defined in section 2(a) of the Investment Company Act of
1940),''.
(b) Amendments to the Investment Company Act of 1940.--The
Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) is amended--
(1) in section 2(a), by adding at the end the following:
``(55) The term `crowdfunding vehicle' means a company--
``(A) whose purpose (as set forth in its
organizational documents) is limited to acquiring,
holding, and disposing securities issued by a single
company in one or more transactions and made pursuant
to section 4(a)(6) of the Securities Act of 1933;
``(B) which issues only one class of securities;
``(C) which receives no compensation in connection
with such acquisition, holding, or disposition of
securities;
``(D) no associated person of which receives any
compensation in connection with such acquisition,
holding or disposition of securities unless such person
is acting as or on behalf of an investment adviser
registered under the Investment Advisers Act of 1940 or
registered as an investment adviser in the State in
which the investment adviser maintains its principal
office and place of business;
``(E) the securities of which have been issued in a
transaction made pursuant to section 4(a)(6) of the
Securities Act of 1933, where both the crowdfunding
vehicle and the company whose securities it holds are
co-issuers;
``(F) which is current in its ongoing disclosure
obligations under Rule 202 of Regulation Crowdfunding
(17 CFR 227.202);
``(G) the company whose securities it holds is
current in its ongoing disclosure obligations under
Rule 202 of Regulation Crowdfunding (17 CFR 227.202);
and
``(H) is advised by an investment adviser
registered under the Investment Advisers Act of 1940 or
registered as an investment adviser in the State in
which the investment adviser maintains its principal
office and place of business.''; and
(2) in section 3(c), by adding at the end the following:
``(15) Any crowdfunding vehicle.''.
SEC. 3. CROWDFUNDING EXEMPTION FROM REGISTRATION.
Section 12(g)(6) of the Securities Exchange Act of 1934 (15 U.S.C.
78l(g)(6)) is amended--
(1) by striking ``The Commission'' and inserting the
following:
``(A) In general.--The Commission'';
(2) by striking ``section 4(6)'' and inserting ``section
4(a)(6)''; and
(3) by adding at the end the following:
``(B) Treatment of securities issued by certain
issuers.--An exemption under subparagraph (A) shall be
unconditional for securities offered by an issuer that
had a public float of less than $75,000,000 as of the
last business day of the issuer's most recently
completed semiannual period, computed by multiplying
the aggregate worldwide number of shares of the
issuer's common equity securities held by non-
affiliates by the price at which such securities were
last sold (or the average bid and asked prices of such
securities) in the principal market for such securities
or, in the event the result of such public float
calculation is zero, had annual revenues of less than
$50,000,000 as of the issuer's most recently completed
fiscal year.''.
Passed the House of Representatives July 5, 2016.
Attest:
KAREN L. HAAS,
Clerk.
[[Category: McCarthy's Innovation Initiative]]
|Has title=114-HR4855 Fix Crowdfunding Act
|Proposed in=114
|Sponsored by=Rep. McHenry, Patrick T. (R-NC-10)
|Reviewing committee=House Financial Services
|Has bill status=Died
|Has keywords=McCarthy
}}
(Sec. 2) 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, typically composed of small individual contributions, and often via Internet platforms, 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 in one or more transactions and made pursuant to crowdfunding exemption transaction requirements;
issues only one class of securities;
receives no compensation for such acquisition, holding, or disposition of securities;
is a co-issuer with the company whose securities it holds; and
meets specified requirements related to disclosure obligations and the use of investment advisers.
(Sec. 3) 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.
==Bill Text==
Congressional Bills 114th Congress
From the U.S. Government Publishing Office
H.R. 4855 Received in Senate (RDS)
114th CONGRESS
2d Session
H. R. 4855
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 6, 2016
Received
_______________________________________________________________________
AN ACT
To amend provisions in the securities laws relating to regulation
crowdfunding to raise the dollar amount limit and to clarify certain
requirements and exclusions for funding portals established by such
Act.
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 ``Fix Crowdfunding Act''.
SEC. 2. CROWDFUNDING VEHICLES.
(a) Amendments to the Securities Act of 1933.--The Securities Act
of 1933 (15 U.S.C. 77a et seq.) is amended--
(1) in section 4A(f)(3), by inserting ``by any of
paragraphs (1) through (14) of'' before ``section 3(c)''; and
(2) in section 4(a)(6)(B), by inserting after ``any
investor'' the following: ``, other than a crowdfunding vehicle
(as defined in section 2(a) of the Investment Company Act of
1940),''.
(b) Amendments to the Investment Company Act of 1940.--The
Investment Company Act of 1940 (15 U.S.C. 80a-1 et seq.) is amended--
(1) in section 2(a), by adding at the end the following:
``(55) The term `crowdfunding vehicle' means a company--
``(A) whose purpose (as set forth in its
organizational documents) is limited to acquiring,
holding, and disposing securities issued by a single
company in one or more transactions and made pursuant
to section 4(a)(6) of the Securities Act of 1933;
``(B) which issues only one class of securities;
``(C) which receives no compensation in connection
with such acquisition, holding, or disposition of
securities;
``(D) no associated person of which receives any
compensation in connection with such acquisition,
holding or disposition of securities unless such person
is acting as or on behalf of an investment adviser
registered under the Investment Advisers Act of 1940 or
registered as an investment adviser in the State in
which the investment adviser maintains its principal
office and place of business;
``(E) the securities of which have been issued in a
transaction made pursuant to section 4(a)(6) of the
Securities Act of 1933, where both the crowdfunding
vehicle and the company whose securities it holds are
co-issuers;
``(F) which is current in its ongoing disclosure
obligations under Rule 202 of Regulation Crowdfunding
(17 CFR 227.202);
``(G) the company whose securities it holds is
current in its ongoing disclosure obligations under
Rule 202 of Regulation Crowdfunding (17 CFR 227.202);
and
``(H) is advised by an investment adviser
registered under the Investment Advisers Act of 1940 or
registered as an investment adviser in the State in
which the investment adviser maintains its principal
office and place of business.''; and
(2) in section 3(c), by adding at the end the following:
``(15) Any crowdfunding vehicle.''.
SEC. 3. CROWDFUNDING EXEMPTION FROM REGISTRATION.
Section 12(g)(6) of the Securities Exchange Act of 1934 (15 U.S.C.
78l(g)(6)) is amended--
(1) by striking ``The Commission'' and inserting the
following:
``(A) In general.--The Commission'';
(2) by striking ``section 4(6)'' and inserting ``section
4(a)(6)''; and
(3) by adding at the end the following:
``(B) Treatment of securities issued by certain
issuers.--An exemption under subparagraph (A) shall be
unconditional for securities offered by an issuer that
had a public float of less than $75,000,000 as of the
last business day of the issuer's most recently
completed semiannual period, computed by multiplying
the aggregate worldwide number of shares of the
issuer's common equity securities held by non-
affiliates by the price at which such securities were
last sold (or the average bid and asked prices of such
securities) in the principal market for such securities
or, in the event the result of such public float
calculation is zero, had annual revenues of less than
$50,000,000 as of the issuer's most recently completed
fiscal year.''.
Passed the House of Representatives July 5, 2016.
Attest:
KAREN L. HAAS,
Clerk.
[[Category: McCarthy's Innovation Initiative]]
