H.R. 2357

Accelerating Access to Capital Act of 2016

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IIB

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.

1.

Short title

This Act may be cited as the Accelerating Access to Capital Act of 2016.

I

Accelerating Access to Capital

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.

II

Micro-offering Safe Harbor

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).

.

III

Private Placement Improvement

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.

Karen L. Haas,

Clerk