H.R. 2590 – Unlocking Capital for Small Businesses Act of 2023

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Updated January 20, 2026 at 6:14 AM UTC

The Unlocking Capital for Small Businesses Act amends the Securities Exchange Act of 1934 to create a safe‑harbor regime for private‑placement brokers and finders. It lowers federal registration and membership requirements, sets disclosure rules, and stops states from adding stricter rules. The changes affect private‑placement brokers, finders, issuers of private securities, and the investors they serve.

Key Provisions

Establishes a private‑placement broker safe harbor with registration rules no stricter than those for funding portals and allows reduced‑requirement membership in national securities associations.
Requires private‑placement brokers to disclose in writing their role, compensation amount, payment recipient, and any beneficial interest before a transaction.
Defines “private‑placement broker” and “finder,” exempting finders from registration and association membership if they stay within set compensation and transaction‑size limits.
Allows contracts with unregistered brokers if the broker self‑certifies as a registered private‑placement broker or finder and the issuer had no reason to doubt the claim.
Removes private‑placement brokers from the broader definition of “broker” in other securities statutes and reporting rules.
Prohibits any state or political subdivision from imposing registration, audit, record‑keeping, or reporting requirements on private‑placement brokers or finders that exceed the federal safe‑harbor standards.

Legislative Activity

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HouseIntro Referral Latest Action

Referred to the House Committee on Financial Services.

Financial Services Committee

April 13, 2023

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HouseIntro Referral

Introduced in House

April 13, 2023

HouseIntro Referral

Referred to the House Committee on Financial Services.

Financial Services Committee

April 13, 2023

Bill Text

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Introduced in HouseIssued April 13, 2023

I

118th CONGRESS

1st Session

H. R. 2590

IN THE HOUSE OF REPRESENTATIVES

April 13, 2023

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

A BILL

To amend the Securities Exchange Act of 1934 to create a safe harbor for finders and private placement brokers, and for other purposes.

1.

Short title

This Act may be cited as the Unlocking Capital for Small Businesses Act of 2023.

2.

Safe harbors for private placement brokers and finders

(a)

In general

Section 15 of the Securities Exchange Act of 1934 (15 U.S.C. 78o) is amended by adding at the end the following:

(p)

Private placement broker safe harbor

(1)

Registration requirements

Not later than 180 days after the date of the enactment of this subsection the Commission shall promulgate regulations with respect to private placement brokers that are no more stringent than those imposed on funding portals.

(2)

National securities associations

Not later than 180 days after the date of the enactment of this subsection the Commission shall promulgate regulations that require the rules of any national securities association to allow a private placement broker to become a member of such national securities association subject to reduced membership requirements consistent with this subsection.

(3)

Disclosures required

Before effecting a transaction, a private placement broker shall disclose clearly and conspicuously, in writing, to all parties to the transaction as a result of the broker’s activities—

(A)

that the broker is acting as a private placement broker;

(B)

the amount of any payment or anticipated payment for services rendered as a private placement broker in connection with such transaction;

(C)

the person to whom any such payment is made; and

(D)

any beneficial interest in the issuer, direct or indirect, of the private placement broker, of a member of the immediate family of the private placement broker, of an associated person of the private placement broker, or of a member of the immediate family of such associated person.

(4)

Private placement broker defined

In this subsection, the term private placement broker means a person that—

(A)

receives transaction-based compensation—

(i)

for effecting a transaction by—

(I)

introducing an issuer of securities and a buyer of such securities in connection with the sale of a business effected as the sale of securities; or

(II)

introducing an issuer of securities and a buyer of such securities in connection with the placement of securities in transactions that are exempt from registration requirements under the Securities Act of 1933; and

(ii)

that is not with respect to—

(I)

a class of publicly traded securities;

(II)

the securities of an investment company (as defined in section 3 of the Investment Company Act of 1940); or

(III)

a variable or equity-indexed annuity or other variable or equity-indexed life insurance product;

(B)

with respect to a transaction for which such transaction-based compensation is received—

(i)

does not handle or take possession of the funds or securities; and

(ii)

does not engage in an activity that requires registration as an investment adviser under State or Federal law; and

(C)

is not a finder as defined under subsection (q).

(q)

Finder safe harbor

(1)

Nonregistration

A finder is exempt from the registration requirements of this Act.

(2)

National securities associations

A finder shall not be required to become a member of any national securities association.

(3)

Finder defined

In this subsection, the term finder means a person described in paragraphs (A) and (B) of subsection (p)(4) that—

(A)

receives transaction-based compensation of equal to or less than $500,000 in any calendar year;

(B)

receives transaction-based compensation in connection with transactions that result in a single issuer selling securities valued at equal to or less than $15 million in any calendar year;

(C)

receives transaction-based compensation in connection with transactions that result in any combination of issuers selling securities valued at equal to or less than $30 million in any calendar year; or

(D)

receives transaction-based compensation in connection with fewer than 16 transactions that are not part of the same offering or are otherwise unrelated in any calendar year.

.

(b)

Validity of contracts with registered private placement brokers and finders

Section 29 of the Securities Exchange Act (15 U.S.C. 78cc) is amended by adding at the end the following:

(d)

Subsection (b) shall not apply to a contract made for a transaction if—

(1)

the transaction is one in which the issuer engaged the services of a broker or dealer that is not registered under this Act with respect to such transaction;

(2)

such issuer received a self-certification from such broker or dealer certifying that such broker or dealer is a registered private placement broker under section 15(p) or a finder under section 15(q); and

(3)

the issuer either did not know that such self-certification was false or did not have a reasonable basis to believe that such self-certification was false.

.

(c)

Removal of private placement brokers from definitions of broker

(1)

Records and reports on monetary instruments transactions

Section 5312 of title 31, United States Code, is amended in subsection (a)(2)(G) by inserting with the exception of a private placement broker as defined in section 15(p)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(p)(4)) before the semicolon at the end.

(2)

Securities Exchange Act of 1934

Section 3(a)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)) is amended by adding at the end the following:

(G)

Private placement brokers

A private placement broker as defined in section 15(p)(4) is not a broker for the purposes of this Act.

.

3.

Limitations on State law

Section 15(i) of the Securities Exchange Act of 1934 (15 U.S.C. 78o(i)) is amended—

(1)

by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively;

(2)

by inserting after paragraph (2) the following:

(3)

Private placement brokers and finders

(A)

In general

No State or political subdivision thereof may enforce any law, rule, regulation, or other administrative action that imposes greater registration, audit, financial recordkeeping, or reporting requirements on a private placement broker or finder than those that are required under subsections (p) and (q), respectively.

(B)

Definition of State

For purposes of this paragraph, the term State includes the District of Columbia and each territory of the United States.

; and

(3)

in paragraph (4), as so redesignated, by striking paragraph (3) and inserting paragraph (5).