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H.R. 2201 (115th): Micro Offering Safe Harbor Act


The text of the bill below is as of Nov 1, 2017 (Reported by House Committee).

Summary of this bill

Source: Republican Policy Committee

H.R. 2201 amends the Securities Act of 1933 to exempt certain micro-offering from the Act’s registration requirements. This will allow small businesses to operate with confidence that they are not in violation of the law when making a non-public securities offering, so long as:

  • Each purchaser has a substantive pre-existing relationship with an officer, director, or shareholder with 10% or more of the shares of the issuer;
  • 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 during the 12-month period preceding the transaction; and
  • The aggregate amount of all securities sold by ...

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Union Calendar No. 280

115th CONGRESS

1st Session

H. R. 2201

[Report No. 115–383]

IN THE HOUSE OF REPRESENTATIVES

April 27, 2017

introduced the following bill; which was referred to the Committee on Financial Services

November 1, 2017

Additional sponsors: Mr. Stivers, Mr. Messer, Mr. Tipton, Mr. Pittenger, and Mr. MacArthur

November 1, 2017

Committed to the Committee of the Whole House on the State of the Union and ordered to be printed


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:

(8)

transactions meeting the requirements of subsection (f).

; and

(2)

by adding at the end the following:

(f)

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 all 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).

.

November 1, 2017

Committed to the Committee of the Whole House on the State of the Union and ordered to be printed