114-HR2357 Accelerating Access to Capital Act

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This bill directs the Securities and Exchange Commission (SEC) to revise Form S-3 (a simplified securities registration form for companies that have already met other reporting requirements) so as to permit securities to be registered pursuant to General Instruction I.B.1. of the form if: (1) the aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant is $75 million or more, or (2) the registrant has at least one class of common equity securities listed and registered on a national securities exchange.

Legislation
Title 114-HR2357 Accelerating Access to Capital Act
Congress 114
Sponsor Rep. Wagner, Ann (R-MO-2)
Committee(s) House - Financial Services, Senate - Banking, Housing, and Urban Affairs
Status Died
Keywords McCarthy
© edegan.com, 2016

Title I--Accelerating Access to Capital

Sec. 101

The SEC must remove a certain listing and registration requirement from General Instruction I.B.6. of Form S-3.

Title II--Micro-Offering Safe Harbor

Sec. 201

The Securities Act of 1933 is amended to exempt from specified prohibitions against the sale or delivery after sale of unregistered securities, among other things, transactions involving the sale of securities by an issuer of micro-offerings if:

  • each purchaser has a substantive pre-existing relationship with either an officer or director of the issuer, or with a shareholder holding 10% or more of the issuer's shares;
  • during the 12-month period preceding the transaction there are no more than 35 purchasers of such micro-offerings sold in reliance on this exemption; and
  • the aggregate amount of all securities sold by the issuer (including any amount sold in reliance upon the exemption) during the 12-month period preceding the transaction does not exceed $500,000.

The exemption shall not apply, however, to transactions involving a sale of securities if issuers, officers, beneficial owners, promotors, investment managers, or other specified persons would have triggered the SEC's "bad actor" disqualification standards for certain previous securities violations or criminal convictions. These bad actors are prohibited from participating in a micro-offering.

The bill also exempts such micro-offerings from state regulation of securities offerings.

Title III--Private Placement Improvement

Sec. 301

The SEC must revise the filing requirements of Regulation D (which provides exemptions from securities registration requirements) to require an issuer that offers or sells securities in reliance upon a certain exemption from registration (for limited offers and sales without regard to the dollar amount of the offering [Rule 506]) to file, no earlier than 15 days after the date of first sale of such securities, a single notice of sales containing the information required by Form D (used to file a notice of an exempt offering of securities under Regulation D) for each new offering of securities.

The SEC shall not: (1) require the issuer to file any notice of sales containing the information required by Form D except for this single notice; (2) condition the availability of the Rule 506 exemption upon the filing of a Form D or similar report; or (3) require issuers to submit written general solicitation materials in connection with a limited offering subject to Rule 506, except when it requests such materials pursuant to specified authority.

The SEC shall revise a specified rule, regarding a Rule 506 offering of a private fund, to characterize as an accredited investor a "knowledgeable employee" of that private fund or the fund's investment adviser.

The SEC shall not extend to private funds the requirements governing investment company sales literature.

Bill Text

114th CONGRESS 2d Session H. R. 2357 IN THE SENATE OF THE UNITED STATES September 12, 2016 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs

AN ACT To direct the Securities and Exchange Commission to revise Form S–3 so as to add listing and registration of a class of common equity securities on a national securities exchange as an additional basis for satisfying the requirements of General Instruction I.B.1. of such form and to remove such listing and registration as a requirement of General Instruction I.B.6. of such form.

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 “Accelerating Access to Capital Act of 2016”.

TITLE I—ACCELERATING ACCESS TO CAPITAL SEC. 101. EXPANDED ELIGIBILITY FOR USE OF FORM S–3.

Not later than 45 days after the date of the enactment of this Act, the Securities and Exchange Commission shall revise Form S–3—

(1) so as to permit securities to be registered pursuant to General Instruction I.B.1. of such form provided that either—

(A) 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

(B) the registrant has at least one class of common equity securities listed and registered on a national securities exchange; and

(2) so as to remove the requirement of paragraph (c) from General Instruction I.B.6. of such form.

TITLE II—MICRO-OFFERING SAFE HARBOR SEC. 201. EXEMPTIONS FOR MICRO-OFFERINGS.

(a) In General.—Section 4 of the Securities Act of 1933 (15 U.S.C. 77d) is amended—

(1) in subsection (a), by adding at the end the following:


“(8) transactions meeting the requirements of subsection (f).”; and

(2) by adding at the end the following:


“(f) Certain Micro-Offerings.—

“(1) IN GENERAL.—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:

“(A) PRE-EXISTING RELATIONSHIP.—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.

“(B) 35 OR FEWER PURCHASERS.—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.

“(C) SMALL OFFERING AMOUNT.—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.

“(2) DISQUALIFICATION.—

“(A) IN GENERAL.—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.

“(B) PERSONS DESCRIBED.—The persons described in this subparagraph are the following:

“(i) The issuer.

“(ii) Any predecessor of the issuer.

“(iii) Any affiliated issuer.

“(iv) Any director, executive officer, other officer participating in the offering, general partner, or managing member of the issuer.

“(v) Any beneficial owner of 20 percent or more of the issuer’s outstanding voting equity securities, calculated on the basis of voting power.

“(vi) Any promoter connected with the issuer in any capacity at the time of such sale.

“(vii) Any investment manager of an issuer that is a pooled investment fund.

“(viii) Any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with such sale of securities.

“(ix) Any general partner or managing member of any such investment manager or solicitor.

“(x) 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.”.

(b) Exemption Under State Regulations.—Section 18(b)(4) of the Securities Act of 1933 (15 U.S.C. 77r(b)(4)) is amended—

(1) in subparagraph (F), by striking “or” at the end;

(2) in subparagraph (G), by striking the period and inserting “; or”; and

(3) by adding at the end the following:


“(H) section 4(a)(8).”.

TITLE III—PRIVATE PLACEMENT IMPROVEMENT SEC. 301. REVISIONS TO SEC REGULATION D.

Not later than 45 days following the date of the enactment of this Act, the Securities and Exchange Commission shall revise Regulation D (17 CFR 501 et seq.) in accordance with the following:

(1) 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.

(2) 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.

(3) The Commission shall not condition the availability of any exemption for an issuer under Rule 506 of Regulation D (17 CFR 230.506) on the issuer’s or any other person’s filing with the Commission of a Form D or any similar report.

(4) 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).

(5) The Commission shall not extend the requirements contained in Rule 156 to private funds.

(6) The Commission shall revise Rule 501(a) of Regulation D to provide that a person who is a “knowledgeable employee” of a private fund or the fund’s investment adviser, as defined in Rule 3c–5(a)(4) (17 CFR 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.

Passed the House of Representatives September 8, 2016.

Attest: karen l. haas, Clerk

Resources

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