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H.R. 4850 (114th): Micro Offering Safe Harbor Act

The text of the bill below is as of Mar 23, 2016 (Introduced).


I

114th CONGRESS

2d Session

H. R. 4850

IN THE HOUSE OF REPRESENTATIVES

March 23, 2016

(for himself, Mr. Messer, Mr. Barr, Mr. Royce, Mr. Chabot, Mr. Tipton, Mr. Brooks of Alabama, and Mr. Williams) introduced the following bill; which was referred to the Committee on Financial Services

A BILL

To amend the Securities Act of 1933 to exempt certain micro-offerings from the registration requirements of such Act, and for other purposes.

1.

Short title

This Act may be cited as the Micro Offering Safe Harbor Act.

2.

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 new paragraph:

(8)

transactions meeting the requirements of subsection (e).

; and

(2)

by adding at the end the following:

(e)

Certain micro-Offerings

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 one or more of the following requirements:

(1)

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.

(2)

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.

(3)

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.

.

(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).

.