On January 10, 2017, the House of Representatives passed H.R. 79, the "Helping Angels Lead Our Startups Act" (the "HALOS Act"). The HALOS Act was originally passed by the House of Representatives as H.R. 4498 on April 27, 2016, but the Senate did not act on the bill in the 114th Congress. The HALOS Act directs the SEC to amend Regulation D under the Securities Act to make the prohibition against general solicitation or general advertising inapplicable to events with specified sponsors (including nonprofit organizations, colleges or universities, venture forums, and angel investor groups that are composed of accredited investors) where:
- presentations or communications are made by or on behalf of an issuer;
- the advertising does not refer to any specific offering of securities by the issuer;
- the sponsor does not engage in certain activities (such as offering investment recommendations or advice to attendees) or charge attendees any fees other than administrative fees; and
- no specific information regarding a securities offering is communicated (other than that the issuer is in the process of offering or planning to offer securities, including the type and amount of securities being offered).
However, the HALOS Act merely incorporates into formal regulation guidance that the SEC Staff has previously provided in the form of a no-action letter (Michigan Growth Capital Symposium, SEC No-Action Letter (May 4, 1995)) and a Compliance and Disclosure Interpretation ("C&DI") (SEC Division of Corporation Finance Compliance and Disclosure Interpretations, Securities Act Rules, Question 256.26 (Aug. 6, 2015)). No-action letters and C&DIs are treated by companies and their counsel as having the same practical effect as formal SEC rules or regulations.
H.R. 79 is available at: https://www.govtrack.us/congress/bills/115/hr79/text.