114-HR4498 HALOS Act

Template:McCarthysInnovationInitiative (Sec. 3) This bill directs the Securities and Exchange Commission (SEC) to amend Regulation D (governing the limited offer and sale of securities without registration under the Securities Act of 1933) to make the prohibition against general solicitation or general advertising inapplicable to events with specified kinds of sponsors (including angel investor groups not connected to broker-dealers or investment advisers) where:

presentations or communications are made by or on behalf of an issuer, the advertising does not refer to any specific offering of securities by the issuer, the sponsor does not engage in certain activities (such as offering investment recommendations or advice to attendees), the sponsor does not receive compensation for the event which would require registration as a broker or dealer or as an investment advisor, and no specific information regarding a securities offering is communicated (other than that the issuer is in the process of offering or planning to offer securities, including the type and amount of securities being offered). This bill may only be construed as requiring the SEC to amend Regulation D with respect to presentations and communications, and not with respect to purchases or sales.

Bill Text

[Congressional Bills 114th Congress] [From the U.S. Government Publishing Office] [H.R. 4498 Referred in Senate (RFS)]

114th CONGRESS

 2d Session
                               H. R. 4498

_______________________________________________________________________

                  IN THE SENATE OF THE UNITED STATES

                            April 28, 2016

Received; read twice and referred to the Committee on Banking, Housing,

                          and Urban Affairs

_______________________________________________________________________

                                AN ACT

   To clarify the definition of general solicitation under Federal 
                           securities law.

   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 OF ANGEL INVESTOR GROUP.

   As used in this Act, the term ``angel investor group means any 

group that--

           (1) is composed of accredited investors interested in 
       investing personal capital in early-stage companies;
           (2) holds regular meetings and has defined processes and 
       procedures for making investment decisions, either individually 
       or among the membership of the group as a whole; and
           (3) is neither associated nor affiliated with brokers, 
       dealers, or investment advisers.

SEC. 3. CLARIFICATION OF GENERAL SOLICITATION.

   (a) In General.--Not later than 6 months after the date of 

enactment of this Act, the Securities and Exchange Commission shall revise Regulation D of its rules (17 CFR 230.500 et seq.) to require that in carrying out the prohibition against general solicitation or general advertising contained in section 230.502(c) of title 17, Code of Federal Regulations, the prohibition shall not apply to a presentation or other communication made by or on behalf of an issuer which is made at an event--

           (1) sponsored by--
                   (A) the United States or any territory thereof, by 
               the District of Columbia, by any State, by a political 
               subdivision of any State or territory, or by any agency 
               or public instrumentality of any of the foregoing;
                   (B) a college, university, or other institution of 
               higher education;
                   (C) a nonprofit organization;
                   (D) an angel investor group;
                   (E) a venture forum, venture capital association, 
               or trade association; or
                   (F) any other group, person or entity as the 
               Securities and Exchange Commission may determine by 
               rule;
           (2) where any advertising for the event does not reference 
       any specific offering of securities by the issuer;
           (3) the sponsor of which--
                   (A) does not make investment recommendations or 
               provide investment advice to event attendees;
                   (B) does not engage in an active role in any 
               investment negotiations between the issuer and 
               investors attending the event;
                   (C) does not charge event attendees any fees other 
               than administrative fees; and
                   (D) does not receive any compensation with respect 
               to such event that would require registration of the 
               sponsor as a broker or a dealer under the Securities 
               Exchange Act of 1934, or as an investment advisor under 
               the Investment Advisers Act of 1940; and
           (4) 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--
                   (A) that the issuer is in the process of offering 
               securities or planning to offer securities;
                   (B) the type and amount of securities being 
               offered;
                   (C) the amount of securities being offered that 
               have already been subscribed for; and
                   (D) the intended use of proceeds of the offering.
   (b) Rule of Construction.--Subsection (a) may only be construed as 

requiring the Securities and Exchange Commission to amend the requirements of Regulation D with respect to presentations and communications, and not with respect to purchases or sales.

           Passed the House of Representatives April 27, 2016.

           Attest:

                                                KAREN L. HAAS,

                                                                Clerk.