An amendment numbered 1 printed in Part A of House Report 112-265 to make technical corrections. It also requires the issuer to state a target offering amount and a deadline to reach the target offering amount. It requires that the Securities and Exchange Commission is provided a notice upon completion of the offering, which shall include the aggregate offering amount and the number of purchasers. Clarifies the disqualification provision to ensure that both issuers and intermediaries, as well as their predecessors, affiliates, officers, directors, or persons fulfilling similar roles, are disqualified from the exemption established in this bill should they have a history of committing securities fraud.
What it does: 37 changes: replaces text in 30 places, inserts text in 4 places, strikes text in 3 places
Rep. Patrick T. McHenry (R-NC)Description
Manager's amendment makes sundry technical and conforming changes.
What it changes
37 changes to H.R. 2930 · 7 shown in the bill's text
We couldn't read part of this amendment. That part is shown as written below.
Change 1: Replaces “issuance” with “offer or sale”
[struck: issuance][inserted: offer or sale]Original wording
Page 5, line 5, strike “issuance” and insert “offer or sale”.
Change 2: Replaces “for which” with “by an issuer, provided that”
[struck: for which][inserted: by an issuer, provided that]Original wording
Page 5, line 6, strike “for which” and insert “by an issuer, provided that”.
Change 3: Replaces “annual amount raised through the issue of the securities” with “amount sold within the previous 12-month period in reliance upon this exemption”
[struck: annual amount raised through the issue of the securities][inserted: amount sold within the previous 12-month period in reliance upon this exemption]Original wording
Page 5, beginning on line 7, strike “annual amount raised through the issue of the securities” and insert “amount sold within the previous 12-month period in reliance upon this exemption”.
Change 4: Replaces “individual investments in the securities are limited to an aggregate annual amount equal…” with “the aggregate amount sold to any investor in reliance on this exemption within the previo…”
[struck: individual investments in the securities are limited to an aggregate annual amount equal to][inserted: the aggregate amount sold to any investor in reliance on this exemption within the previous 12-month period does not exceed]Original wording
Page 5, beginning on line 13, strike “individual investments in the securities are limited to an aggregate annual amount equal to” and insert “the aggregate amount sold to any investor in reliance on this exemption within the previous 12-month period does not exceed”.
Change 5: Replaces “the” with “such”
[struck: the][inserted: such]Original wording
Page 5, line 17, strike “the” and insert “such”.
Change 6: Replaces “issuance” with “offer or sale”
[struck: issuance][inserted: offer or sale]Original wording
Page 6, line 8, strike “issuance” and insert “offer or sale”.
Change 7: Inserts “used for the offer and sale of such securities” after “website”
…website[inserted: used for the offer and sale of such securities]…
Original wording
Page 6, line 12, after “website” insert “used for the offer and sale of such securities”.
Change 8: Replaces “person” with “intermediary”
[struck: person][inserted: intermediary]Original wording
Page 6, line 24, strike “person” and insert “intermediary”.
Change 9: Strikes “competency in”
Struck: competency in
Original wording
Page 7, line 4, strike “competency in”.
Change 10: Replaces “recognition” with “an understanding”
[struck: recognition][inserted: an understanding]Original wording
Page 7, line 5, strike “recognition” and insert “an understanding”.
Change 11: Inserts “an understanding of the” before “risk”
…[inserted: an understanding of the ]risk…
Original wording
Page 7, line 8, before “risk” insert “an understanding of the”.
Change 12: Rewrites page 7, lines 11–15
ReplacesPrinted pageRemoves page 7, lines 11–15 of the printed bill. See that page
Inserted: (7) requires the issuer to state a target offering amount and a deadline to reach the target offering amount and ensure the third party custodian described under paragraph (10) withholds offering proceeds until aggregate capital raised from investors other than the issuer is no less than 60 percent of the target offering amount;
Original wording
Page 7, strike lines 11 through 15 and insert the following:
Change 13: Replaces “with basic” with “and potential investors with”
[struck: with basic][inserted: and potential investors with]Original wording
Page 7, line 18, strike “with basic” and insert “and potential investors with”.
Change 14: Replaces “funds are solicited from” with “securities are offered to”
[struck: funds are solicited from][inserted: securities are offered to]Original wording
Page 7, beginning on line 19, strike “funds are solicited from” and insert “securities are offered to”.
Change 15: Replaces “capital formation funds” with “proceeds of the offering”
[struck: capital formation funds][inserted: proceeds of the offering]Original wording
Page 8, line 2, strike “capital formation funds” and insert “proceeds of the offering”.
Change 16: Replaces “traditional broker or dealer or” with “broker or dealer registered under section 15(b)(1) of the Securities Exchange Act of 1934…”
[struck: traditional broker or dealer or][inserted: broker or dealer registered under section 15(b)(1) of the Securities Exchange Act of 1934 or an]Original wording
Page 8, beginning on line 6, strike “traditional broker or dealer or” and insert “broker or dealer registered under section 15(b)(1) of the Securities Exchange Act of 1934 or an”.
Change 17: Replaces “(13)” with “(14)”
[struck: (13)][inserted: (14)]Original wording
Page 8, line 14, strike “(13)” and insert “(14)”.
Change 18: Inserts “or sells” before “securities”
…[inserted: or sells ]securities…
Original wording
Page 8, line 17, before “securities” insert “or sells”.
Change 19: Strikes “competency in”
Struck: competency in
Original wording
Page 9, line 13, strike “competency in”.
Change 20: Replaces “recognition” with “an understanding”
[struck: recognition][inserted: an understanding]Original wording
Page 9, line 14, strike “recognition” and insert “an understanding”.
Change 21: Inserts “an understanding of the” before “risk”
…[inserted: an understanding of the ]risk…
Original wording
Page 9, line 17, before “risk” insert “an understanding of the”.
Change 22: Replaces “withholds capital formation” with “ensures that the third party custodian described under paragraph (9) withholds offering”
In H.R. 2930 · Reported in House
"(C) such other areas as the Commission may determine appropriate;
"(7) states a target offering amount and
[struck: withholds capital formation ][inserted: ensures that the third party custodian described under paragraph (9) withholds offering ]proceeds until the aggregate capital raised from investors other than the issuer is no less than 60 percent of the target offering amount;"(8) provides the Commission with basic notice of the offering, not later than the first day funds are solicited from potential investors, including--
Original wording
Page 9, beginning on line 20, strike “withholds capital formation” and insert “ensures that the third party custodian described under paragraph (9) withholds offering”.
Change 23: Strikes “basic”
Struck: basic
Original wording
Page 10, line 1, strike “basic”.
Change 24: Replaces “funds are solicited from” with “securities are offered to”
[struck: funds are solicited from][inserted: securities are offered to]Original wording
Page 10, beginning on line 2, strike “funds are solicited from” and insert “securities are offered to”.
Change 25: Replaces “capital formation funds” with “proceeds of the offering”
[struck: capital formation funds][inserted: proceeds of the offering]Original wording
Page 10, line 5, strike “capital formation funds” and insert “proceeds of the offering”.
Change 26: Replaces “traditional broker or dealer or” with “broker or dealer registered under section 15(b)(1) of the Securities Exchange Act of 1934…”
[struck: traditional broker or dealer or][inserted: broker or dealer registered under section 15(b)(1) of the Securities Exchange Act of 1934 or an]Original wording
Page 10, beginning on line 9, strike “traditional broker or dealer or” and insert “broker or dealer registered under section 15(b)(1) of the Securities Exchange Act of 1934 or an”.
Change 27: Replaces “(13)” with “(14)”
[struck: (13)][inserted: (14)]Original wording
Page 10, line 17, strike “(13)” and insert “(14)”.
Change 28: Replaces “provided by an investor” with “as to annual income provided by the person to whom the securities are sold”
In H.R. 2930 · Reported in House
"(13) discloses to potential investors, on the issuer's website, that the issuer has an interest in the issuance.
"(c) Verification of Income.--For purposes of section 4(6), an issuer or intermediary may rely on certifications [inserted: as to annual income ]provided by
[struck: an investor][inserted: the person] to [inserted: whom the securities are sold to ]verify the investor's income."(d) Information Available to States.--The Commission shall make the notices described under subsections (a)(9) and (b)(8) and the information described under subsections (a)(4) and (b)(4) available to the States.
Original wording
Page 10, line 22, strike “provided by an investor” and insert “as to annual income provided by the person to whom the securities are sold”.
Change 29: Replaces “(a)(9) and (b)(8)” with “(a)(9), (a)(13), (b)(8), and (b)(13)”
In H.R. 2930 · Reported in House
"(c) Verification of Income.--For purposes of section 4(6), an issuer or intermediary may rely on certifications provided by an investor to verify the investor's income.
"(d) Information Available to States.--The Commission shall make the notices described under subsections (a)(9)
[struck: and][inserted: , (a)(13),] (b)(8)[inserted: ,] and [inserted: (b)(13) and ]the information described under subsections (a)(4) and (b)(4) available to the States."(e) Restriction on Sales.--With respect to a transaction involving the issuance of securities described under section 4(6), an investor may not sell such securities during the 1-year period beginning on the date of purchase, unless such securities are sold to--
Original wording
Page 11, line 1, strike “(a)(9) and (b)(8)” and insert “(a)(9), (a)(13), (b)(8), and (b)(13)”.
Change 30: Replaces “an investor may not sell” with “a purchaser may not transfer”
In H.R. 2930 · Reported in House
"(d) Information Available to States.--The Commission shall make the notices described under subsections (a)(9) and (b)(8) and the information described under subsections (a)(4) and (b)(4) available to the States.
"(e) Restriction on Sales.--With respect to a transaction involving the issuance of securities described under section 4(6),
[struck: an investor][inserted: a purchaser] may not[struck: sell][inserted: transfer] such securities during the 1-year period beginning on the date of purchase, unless such securities are sold to--"(1) the issuer of such securities; or
Original wording
Page 11, line 5, strike “an investor may not sell” and insert “a purchaser may not transfer”.
Change 31: Rewrites page 11, lines 11–15
ReplacesPrinted pageRemoves page 11, lines 11–15 of the printed bill. See that page
Inserted: (1) No registration as broker.--With respect to a transaction described under section 4(6) involving an intermediary, such intermediary shall not be required to register as a broker under section 15(a)(1) of the Securities Exchange Act of 1934 solely by reason of participation in such transaction.
Original wording
Page 11, strike lines 11 through 15 and insert the following:
Change 32: Replaces “90” with “180”
[struck: 90][inserted: 180]Original wording
Page 11, line 21, strike “90” and insert “180”.
Change 33: Replaces “carry out the cost-benefit analysis required under section 2(b) of such Act” with “consider the costs and benefits of the action”
In H.R. 2930 · Reported in House
"(2) No preclusion of other capital raising.--Nothing in this section or section 4(6) shall be construed as preventing an issuer from raising capital through methods not described under section 4(6).".
(c) Rulemaking.--Not later than 90 days after the date of the enactment of this Act, the Securities and Exchange Commission shall issue such rules as may be necessary to carry out section 4A of the Securities Act of 1933. In issuing such rules, the Commission shall
[struck: carry out ][inserted: consider ]the[struck: cost-benefit analysis required under section 2(b) ][inserted: costs and benefits ]of[struck: such Act][inserted: the action].(d) Disqualification.--Not later than 90 days after the date of the enactment of this Act, the Securities and Exchange Commission shall by rule or regulation establish disqualification provisions under which a person shall not be eligible to utilize the exemption under section 4(6) of the Securities Act of 1933 or to participate in the affairs of an intermediary facilitating the use of that exemption. Such provisions shall be substantially similar to the disqualification provisions contained in the regulations adopted in accordance with section 926 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C. 77d note).
Original wording
Page 12, beginning on line 1, strike “carry out the cost-benefit analysis required under section 2(b) of such Act” and insert “consider the costs and benefits of the action”.
Change 34: Replaces “90” with “180”
[struck: 90][inserted: 180]Original wording
Page 12, line 3, strike “90” and insert “180”.
Change 35: Replaces “a person” with “an issuer”
[struck: a person][inserted: an issuer]Original wording
Page 12, line 6, strike “a person” and insert “an issuer”.
Change 36: Replaces “or to participate in the affairs of an intermediary facilitating the use of that exemptio…” with “based on the disciplinary history of the issuer or its predecessors, affiliates, officers…”
In H.R. 2930 · Reported in House
(c) Rulemaking.--Not later than 90 days after the date of the enactment of this Act, the Securities and Exchange Commission shall issue such rules as may be necessary to carry out section 4A of the Securities Act of 1933. In issuing such rules, the Commission shall carry out the cost-benefit analysis required under section 2(b) of such Act.
(d) Disqualification.--Not later than 90 days after the date of the enactment of this Act, the Securities and Exchange Commission shall by rule or regulation establish disqualification provisions under which a person shall not be eligible to utilize the exemption under section 4(6) of the Securities Act of 1933 [inserted: based on the disciplinary history of the issuer ]or [inserted: its predecessors, affiliates, officers, directors, or persons fulfilling similar roles. The Commission shall also establish disqualification provisions under which an intermediary shall not be eligible ]to
[struck: participate ][inserted: act as an intermediary ]in [inserted: connection with an offering utilizing ]the[struck: affairs ][inserted: exemption under section 4(6) ]of[struck: an intermediary facilitating ][inserted: the Securities Act of 1933 based on ]the[struck: use ][inserted: disciplinary history ]of[struck: that exemption][inserted: the intermediary or its predecessors, affiliates, officers, directors, or persons fulfilling similar roles]. Such provisions shall be substantially similar to the disqualification provisions contained in the regulations adopted in accordance with section 926 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (15 U.S.C. 77d note).SEC. 3. EXCLUSION OF CROWDFUNDING INVESTORS FROM SHAREHOLDER CAP.
Original wording
Page 12, beginning on line 8, strike “or to participate in the affairs of an intermediary facilitating the use of that exemption.” and insert “based on the disciplinary history of the issuer or its predecessors, affiliates, officers, directors, or persons fulfilling similar roles. The Commission shall also establish disqualification provisions under which an intermediary shall not be eligible to act as an intermediary in connection with an offering utilizing the exemption under section 4(6) of the Securities Act of 1933 based on the disciplinary history of the intermediary or its predecessors, affiliates, officers, directors, or persons fulfilling similar roles.”.
Change 37: Replaces “the term 'held of record' shall not include holders of securities issued pursuant to tran…” with “securities held by persons who purchase such securities in transactions described under s…”
In H.R. 2930 · Reported in House
(2) by adding at the end the following:
"(B) Exclusion for persons holding certain securities.--For purposes of this subsection,
[struck: the term '][inserted: securities ]held[struck: of record' shall not include holders of ][inserted: by persons who purchase such ]securities[struck: issued pursuant to ][inserted: in ]transactions described under section 4(6) of the Securities Act of 1933[inserted: shall not be deemed to be 'held of record'].".SEC. 4. PREEMPTION OF STATE LAW.
Original wording
Page 13, beginning on line 1, strike “the term ‘held of record' shall not include holders of securities issued pursuant to transactions described under section 4(6) of the Securities Act of 1933.” and insert “securities held by persons who purchase such securities in transactions described under section 4(6) of the Securities Act of 1933 shall not be deemed to be ‘held of record'.”.
Shown as written
Page 7, line 10, before the semicolon insert “by rule or regulation”.
Page 8, line 4, before the semicolon insert “and the deadline to reach the target offering amount”.
Page 8, line 13, strike “and” and insert after such line the following:
Page 9, line 19, before the semicolon insert “by rule or regulation”.
Page 10, line 7, before the semicolon insert “and the deadline to reach the target offering amount”.
Page 10, line 16, strike “and” and insert after such line the following:
Read automatically from the Congressional Record. Check the original before relying on it.
As printed
Page 5, line 5, strike “issuance” and insert “offer or sale”.
Page 5, line 6, strike “for which” and insert “by an issuer, provided that”.
Page 5, beginning on line 7, strike “annual amount raised through the issue of the securities” and insert “amount sold within the previous 12-month period in reliance upon this exemption”.
Page 5, beginning on line 13, strike “individual investments in the securities are limited to an aggregate annual amount equal to” and insert “the aggregate amount sold to any investor in reliance on this exemption within the previous 12-month period does not exceed”.
Page 5, line 17, strike “the” and insert “such”.
Page 6, line 8, strike “issuance” and insert “offer or sale”.
Page 6, line 12, after “website” insert “used for the offer and sale of such securities”.
Page 6, line 24, strike “person” and insert “intermediary”.
Page 7, line 4, strike “competency in”.
Page 7, line 5, strike “recognition” and insert “an understanding”.
Page 7, line 8, before “risk” insert “an understanding of the”.
Page 7, line 10, before the semicolon insert “by rule or regulation”.
Page 7, strike lines 11 through 15 and insert the following:
“(7) requires the issuer to state a target offering amount and a deadline to reach the target offering amount and ensure the third party custodian described under paragraph (10) withholds offering proceeds until aggregate capital raised from investors other than the issuer is no less than 60 percent of the target offering amount;”.
Page 7, line 18, strike “with basic” and insert “and potential investors with”.
Page 7, beginning on line 19, strike “funds are solicited from” and insert “securities are offered to”.
Page 8, line 2, strike “capital formation funds” and insert “proceeds of the offering”.
Page 8, line 4, before the semicolon insert “and the deadline to reach the target offering amount”.
Page 8, beginning on line 6, strike “traditional broker or dealer or” and insert “broker or dealer registered under section 15(b)(1) of the Securities Exchange Act of 1934 or an”.
Page 8, line 13, strike “and” and insert after such line the following:
“(13) provides the Commission with a notice upon completion of the offering, which shall include the aggregate offering amount and the number of purchasers; and”.
Page 8, line 14, strike “(13)” and insert “(14)”.
Page 8, line 17, before “securities” insert “or sells”.
Page 9, line 13, strike “competency in”.
Page 9, line 14, strike “recognition” and insert “an understanding”.
Page 9, line 17, before “risk” insert “an understanding of the”.
Page 9, line 19, before the semicolon insert “by rule or regulation”.
Page 9, beginning on line 20, strike “withholds capital formation” and insert “ensures that the third party custodian described under paragraph (9) withholds offering”.
Page 10, line 1, strike “basic”.
Page 10, beginning on line 2, strike “funds are solicited from” and insert “securities are offered to”.
Page 10, line 5, strike “capital formation funds” and insert “proceeds of the offering”.
Page 10, line 7, before the semicolon insert “and the deadline to reach the target offering amount”.
Page 10, beginning on line 9, strike “traditional broker or dealer or” and insert “broker or dealer registered under section 15(b)(1) of the Securities Exchange Act of 1934 or an”.
Page 10, line 16, strike “and” and insert after such line the following:
“(13) provides the Commission with a notice upon completion of the offering, which shall include the aggregate offering amount and the number of purchasers; and”.
Page 10, line 17, strike “(13)” and insert “(14)”.
Page 10, line 22, strike “provided by an investor” and insert “as to annual income provided by the person to whom the securities are sold”.
Page 11, line 1, strike “(a)(9) and (b)(8)” and insert “(a)(9), (a)(13), (b)(8), and (b)(13)”.
Page 11, line 5, strike “an investor may not sell” and insert “a purchaser may not transfer”.
Page 11, strike lines 11 through 15 and insert the following:
“(1) No registration as broker.--With respect to a transaction described under section 4(6) involving an intermediary, such intermediary shall not be required to register as a broker under section 15(a)(1) of the Securities Exchange Act of 1934 solely by reason of participation in such transaction.”.
Page 11, line 21, strike “90” and insert “180”.
Page 12, beginning on line 1, strike “carry out the cost-benefit analysis required under section 2(b) of such Act” and insert “consider the costs and benefits of the action”.
Page 12, line 3, strike “90” and insert “180”.
Page 12, line 6, strike “a person” and insert “an issuer”.
Page 12, beginning on line 8, strike “or to participate in the affairs of an intermediary facilitating the use of that exemption.” and insert “based on the disciplinary history of the issuer or its predecessors, affiliates, officers, directors, or persons fulfilling similar roles. The Commission shall also establish disqualification provisions under which an intermediary shall not be eligible to act as an intermediary in connection with an offering utilizing the exemption under section 4(6) of the Securities Act of 1933 based on the disciplinary history of the intermediary or its predecessors, affiliates, officers, directors, or persons fulfilling similar roles.”.
Page 13, beginning on line 1, strike “the term ‘held of record' shall not include holders of securities issued pursuant to transactions described under section 4(6) of the Securities Act of 1933.” and insert “securities held by persons who purchase such securities in transactions described under section 4(6) of the Securities Act of 1933 shall not be deemed to be ‘held of record'.”.
Legislative Activity
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House amendment offered
November 3, 2011
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House amendment offered
November 3, 2011
Amendment agreed to Committee of the Whole
November 3, 2011 • 4:33 PM
House amendment agreed to: On agreeing to the McHenry amendment (A001) Agreed to by voice vote.
November 3, 2011 • 4:33 PM
House amendment offered/reported by: Amendment (A001) offered by Mr. McHenry.(consideration: CR H7301-7302; text: CR H7301-7302)
November 3, 2011 • 4:32 PM
Amendment (A001) offered by Mr. McHenry. (consideration: CR H7301-7302; text: CR H7301-7302)
November 3, 2011 • 4:32 PM
On agreeing to the McHenry amendment (A001) Agreed to by voice vote.
November 3, 2011 • 4:33 PM