The House Financial Services Committee held a markup session on June 15, 2016 to discuss a number of bills, including many relating to capital formation and the lessening of regulatory burdens for smaller reporting companies. On June 16, the Committee reconvened and approved twelve bills, including:
- H.R. 4850, Micro Offering Safe Harbor Act. This bill amends the Securities Act of 1933 to exempt certain micro-offerings from the Act’s registration requirements. To qualify for the exemption (1) each purchaser has a substantive pre-existing relationship with an owner; (2) there are 35 or fewer purchasers; and (3) the amount does not exceed $500,000. H.R. 4850 passed the committee 34-25.
- H.R. 4852, Private Placement Improvement Act of 2016. This bill directs the SEC to revise the filing requirements of Regulation D (which provides exemptions from securities registration requirements) to require an issuer that offers or sells securities in reliance upon a certain exemption from registration to file, no earlier than the date of first sale of such securities, a single notice of sales containing the information required by Form D for each new offering of securities. H.R. 4852 passed the committee 33-26.
- H.R. 4854, Supporting America’s Innovators Act of 2016. The Investment Company Act limits the number of investors in an investment company fund to 100 for the fund to be exempt from registration with the SEC. This bill raises the limit on the number of individuals, from 100 to 250, who can invest in certain “qualified venture capital funds” before those funds must register as “investment companies” under the Investment Company Act of 1940. H.R. 4854 passed the committee 57-2.
- H.R. 4855, Fix Crowdfunding Act. This bill would allow small businesses to benefit from Title III of the JOBS Act, which allows for equity crowdfunding. It proposes to increase financial thresholds in the Federal securities laws so as not to dissuade small businesses from using crowdfunding as a way to raise capital, and allows single purpose funds to utilize crowdfunding. H.R. 4855 passed the committee 57-2.
In a statement, Financial Services Committee Chairman Jeb Hensarling asserted the committee “…will remove duplicative burdens, reduce costs and support smart regulation that protects investors and maintains orderly and efficient markets – because this is key to economic growth.”