IB
Union Calendar No. 112
118THCONGRESS
1
STSESSION H. R. 2799
[Report No. 118–143, Part I]
To make reforms to the capital markets of the United States, and for
other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL24, 2023
Mr. M
CHENRYintroduced the following bill; which was referred to the Com-
mittee on Financial Services, and in addition to the Committee on Edu-
cation and the Workforce, for a period to be subsequently determined by
the Speaker, in each case for consideration of such provisions as fall with-
in the jurisdiction of the committee concerned
J
ULY17, 2023
Reported from the Committee on Financial Services with an amendment
[Strike out all after the enacting clause and insert the part printed in italic]
JULY17, 2023
Committee on Education and the Workforce discharged; committed to the
Committee of the Whole House on the State of the Union and ordered
to be printed
[For text of introduced bill, see copy of bill as introduced on April 24, 2023]
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A BILL
To make reforms to the capital markets of the United States,
and for other purposes.
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Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 3
(a) S
HORTTITLE.—This Act may be cited as the ‘‘Ex-4
panding Access to Capital Act of 2023’’. 5
(b) T
ABLE OFCONTENTS.—The table of contents for 6
this Act is as follows: 7
Sec. 1. Short title; table of contents.
DIVISION A—STRENGTHENING PUBLIC MARKETS
TITLE I—REMOVE ABERRATIONS IN THE MARKET CAP TEST FOR
TARGET COMPANY FINANCIAL STATEMENTS
Sec. 1101. Avoiding aberrational results in requirements for acquisition and dis-
position financial statements.
TITLE II—HELPING STARTUPS CONTINUE TO GROW
Sec. 1201. Short title.
Sec. 1202. Emerging growth company criteria.
TITLE III—SEC AND PCAOB AUDITOR REQUIREMENTS FOR NEWLY
PUBLIC COMPANIES
Sec. 1301. Auditor independence for certain past audits occurring before an
issuer is a public company.
TITLE IV—EXPAND THE PROTECTION FOR RESEARCH REPORTS TO
COVER ALL SECURITIES OF ALL ISSUERS
Sec. 1401. Provision of research.
TITLE V—EXCLUDE QIBS AND IAAS FROM THE RECORD HOLDER
COUNT FOR MANDATORY REGISTRATION
Sec. 1501. Exclusions from mandatory registration threshold.
TITLE VI—EXPAND WKSI ELIGIBILITY
Sec. 1601. Definition of well-known seasoned issuer.
TITLE VII—SMALLER REPORTING COMPANY, ACCELERATED FILER,
AND LARGE ACCELERATED FILER THRESHOLDS
Sec. 1701. Smaller reporting company, accelerated filer, and large accelerated
filer thresholds.
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DIVISION B—HELPING SMALL BUSINESSES AND ENTREPRENEURS
TITLE I—UNLOCKING CAPITAL FOR SMALL BUSINESSES
Sec. 2101. Short title.
Sec. 2102. Safe harbors for private placement brokers and finders.
Sec. 2103. Limitations on State law.
TITLE II—SMALL BUSINESS INVESTOR CAPITAL ACCESS
Sec. 2201. Short title.
Sec. 2202. Inflation adjustment for the exemption threshold for certain investment
advisers of private funds.
TITLE III—IMPROVING CAPITAL ALLOCATION FOR NEWCOMERS
Sec. 2301. Short title.
Sec. 2302. Qualifying venture capital funds.
TITLE IV—SMALL ENTREPRENEURS’ EMPOWERMENT AND
DEVELOPMENT
Sec. 2401. Short title.
Sec. 2402. Micro-offering exemption.
TITLE V—REGULATION A+ IMPROVEMENT
Sec. 2501. Short title.
Sec. 2502. JOBS Act-related exemption.
TITLE VI—DEVELOPING AND EMPOWERING OUR ASPIRING
LEADERS
Sec. 2601. Short title.
Sec. 2602. Definitions.
Sec. 2603. Reports.
TITLE VII—IMPROVING CROWDFUNDING OPPORTUNITIES
Sec. 2701. Short title.
Sec. 2702. Crowdfunding revisions.
TITLE VIII—RESTORING THE SECONDARY TRADING MARKET
Sec. 2801. Short title.
Sec. 2802. Exemption from State regulation.
DIVISION C—INCREASING ACCESS TO PRIVATE MARKETS
TITLE I—GIG WORKER EQUITY COMPENSATION
Sec. 3101. Short title.
Sec. 3102. Extension of Rule 701.
Sec. 3103. Preemption of certain provisions of State law.
Sec. 3104. GAO study.
TITLE II—INVESTMENT OPPORTUNITY EXPANSION
Sec. 3201. Short title.
Sec. 3202. Investment thresholds to qualify as an accredited investor.
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TITLE III—RISK DISCLOSURE AND INVESTOR ATTESTATION
Sec. 3301. Short title.
Sec. 3302. Investor attestation.
TITLE IV—ACCREDITED INVESTORS INCLUDE INDIVIDUALS
RECEIVING ADVICE FROM CERTAIN PROFESSIONALS
Sec. 3401. Accredited investors include individuals receiving advice from certain
professionals.
DIVISION A—STRENGTHENING 1
PUBLIC MARKETS 2
TITLE I—REMOVE ABERRATIONS 3
IN THE MARKET CAP TEST 4
FOR TARGET COMPANY FI-5
NANCIAL STATEMENTS 6
SEC. 1101. AVOIDING ABERRATIONAL RESULTS IN REQUIRE-7
MENTS FOR ACQUISITION AND DISPOSITION 8
FINANCIAL STATEMENTS. 9
The Securities and Exchange Commission shall revise 10
section 210.1–02(w)(1)(i)(A) of title 17, Code of Federal 11
Regulations, to permit a registrant, in determining the sig-12
nificance of an acquisition or disposition described in such 13
section 210.1–02(w)(1)(i)(A), to calculate the registrant’s 14
aggregate worldwide market value based on the applicable 15
trading value, conversion value, or exchange value of all 16
of the registrant’s outstanding classes of stock (including 17
preferred stock and non-traded common shares that are con-18
vertible into or exchangeable for traded common shares) and 19
not just the voting and non-voting common equity of the 20
registrant. 21
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TITLE II—HELPING STARTUPS 1
CONTINUE TO GROW 2
SEC. 1201. SHORT TITLE. 3
This title may be cited as the ‘‘Helping Startups Con-4
tinue To Grow Act’’. 5
SEC. 1202. EMERGING GROWTH COMPANY CRITERIA. 6
(a) S
ECURITIESACT OF1933.—Section 2(a)(19) of the 7
Securities Act of 1933 (15 U.S.C. 77b(a)(19)) is amended— 8
(1) by striking ‘‘$1,000,000,000’’ each place such 9
term appears and inserting ‘‘$1,500,000,000’’; 10
(2) in subparagraph (B)— 11
(A) by striking ‘‘fifth’’ and inserting ‘‘7- 12
year’’; and 13
(B) by adding ‘‘or’’ at the end; 14
(3) in subparagraph (C), by striking ‘‘; or’’ and 15
inserting a period; and 16
(4) by striking subparagraph (D). 17
(b) S
ECURITIESEXCHANGEACT OF1934.—Section 18
3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 19
78c(a)) is amended, in the first paragraph (80) (related to 20
emerging growth companies)— 21
(1) by striking ‘‘$1,000,000,000’’ each place such 22
term appears and inserting ‘‘$1,500,000,000’’; 23
(2) in subparagraph (B)— 24
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(A) by striking ‘‘fifth’’ and inserting ‘‘7- 1
year’’; and 2
(B) by adding ‘‘or’’ at the end; 3
(3) in subparagraph (C), by striking ‘‘; or’’ and 4
inserting a period; and 5
(4) by striking subparagraph (D). 6
TITLE III—SEC AND PCAOB AUDI-7
TOR REQUIREMENTS FOR 8
NEWLY PUBLIC COMPANIES 9
SEC. 1301. AUDITOR INDEPENDENCE FOR CERTAIN PAST 10
AUDITS OCCURRING BEFORE AN ISSUER IS A 11
PUBLIC COMPANY. 12
(a) A
UDITORINDEPENDENCE STANDARDS OF THE 13
P
UBLICCOMPANYACCOUNTINGOVERSIGHTBOARD.—Sec-14
tion 103 of the Sarbanes-Oxley Act of 2002 (15 U.S.C. 15
7213) is amended by adding at the end the following: 16
‘‘(e) A
UDITORINDEPENDENCE FOR CERTAINPASTAU-17
DITSOCCURRINGBEFORE ANISSUERISAPUBLICCOM-18
PANY.—With respect to an issuer that is a public company 19
or an issuer that has filed a registration statement to be-20
come a public company, the auditor independence rules es-21
tablished by the Board with respect to audits occurring be-22
fore the last fiscal year of the issuer completed before the 23
issuer filed a registration statement to become a public com-24
pany shall treat an auditor as independent if— 25
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‘‘(1) the auditor is independent under standards 1
established by the American Institute of Certified 2
Public Accountants applicable to certified public ac-3
countants in United States; or 4
‘‘(2) with respect to a foreign issuer, the auditor 5
is independent under comparable standards applica-6
ble to certified public accountants in the issuer’s home 7
country.’’. 8
(b) A
UDITORINDEPENDENCESTANDARDS OF THESE-9
CURITIES ANDEXCHANGECOMMISSION.—Section 10A of 10
the Securities Exchange Act of 1934 (15 U.S.C. 78j–1) is 11
amended by adding at the end the following: 12
‘‘(n) A
UDITORINDEPENDENCE FOR CERTAINPAST 13
A
UDITSOCCURRINGBEFORE ANISSUERISAPUBLICCOM-14
PANY.—With respect to an issuer that is a public company 15
or an issuer that has filed a registration statement to be-16
come a public company, the auditor independence rules es-17
tablished by the Commission under the securities laws with 18
respect to audits occurring before the last fiscal year of the 19
issuer completed before the issuer filed a registration state-20
ment to become a public company shall treat an auditor 21
as independent if— 22
‘‘(1) the auditor is independent under standards 23
established by the American Institute of Certified 24
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Public Accountants applicable to certified public ac-1
countants in United States; or 2
‘‘(2) with respect to a foreign issuer, the auditor 3
is independent under comparable standards applica-4
ble to certified public accountants in the issuer’s home 5
country.’’. 6
TITLE IV—EXPAND THE PROTEC-7
TION FOR RESEARCH RE-8
PORTS TO COVER ALL SECU-9
RITIES OF ALL ISSUERS 10
SEC. 1401. PROVISION OF RESEARCH. 11
Section 2(a)(3) of the Securities Act of 1933 (15 U.S.C. 12
77b(a)(3)) is amended— 13
(a) by striking ‘‘an emerging growth company’’ and 14
inserting ‘‘an issuer’’; 15
(b) by striking ‘‘the common equity’’ and inserting 16
‘‘any’’; and 17
(c) by striking ‘‘such emerging growth company’’ and 18
inserting ‘‘such issuer’’. 19
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TITLE V—EXCLUDE QIBS AND 1
IAAS FROM THE RECORD 2
HOLDER COUNT FOR MANDA-3
TORY REGISTRATION 4
SEC. 1501. EXCLUSIONS FROM MANDATORY REGISTRATION 5
THRESHOLD. 6
(a) I
NGENERAL.—Section 12(g)(1) of the Securities 7
Exchange Act of 1934 (15 U.S.C. 78l(g)(1)) is amended— 8
(1) in subparagraph (A)(i), by inserting after 9
‘‘persons’’ the following: ‘‘(that are not a qualified in-10
stitutional buyer or an institutional accredited inves-11
tor)’’; and 12
(2) in subparagraph (B), by inserting after ‘‘per-13
sons’’ the following: ‘‘(that are not a qualified institu-14
tional buyer or an institutional accredited investor)’’. 15
(b) N
ONAPPLICABILITY OFGENERALEXEMPTIVEAU-16
THORITY.—Section 36 of the Securities Exchange Act of 17
1934 (15 U.S.C. 78mm) shall not apply to the matter in-18
serted by the amendments made by subsection (a). 19
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TITLE VI—EXPAND WKSI 1
ELIGIBILITY 2
SEC. 1601. DEFINITION OF WELL-KNOWN SEASONED 3
ISSUER. 4
For purposes of the Federal securities laws, and regu-5
lations issued thereunder, an issuer shall be a ‘‘well-known 6
seasoned issuer’’ if— 7
(1) the aggregate market value of the voting and 8
non-voting common equity held by non-affiliates of 9
the issuer is $250,000,000 or more (as determined 10
under Form S–3 general instruction I.B.1. as in ef-11
fect on the date of enactment of this Act); and 12
(2) the issuer otherwise satisfies the requirements 13
of the definition of ‘‘well-known seasoned issuer’’ con-14
tained in section 230.405 of title 17, Code of Federal 15
Regulations without reference to any requirement in 16
such definition relating to minimum worldwide mar-17
ket value of outstanding voting and non-voting com-18
mon equity held by non-affiliates. 19
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TITLE VII—SMALLER REPORT-1
ING COMPANY, ACCELERATED 2
FILER, AND LARGE ACCELER-3
ATED FILER THRESHOLDS 4
SEC. 1701. SMALLER REPORTING COMPANY, ACCELERATED 5
FILER, AND LARGE ACCELERATED FILER 6
THRESHOLDS. 7
(a) S
MALLERREPORTINGCOMPANIES.— 8
(1) I
N GENERAL.—The Securities and Exchange 9
Commission shall revise the definition of a ‘‘smaller 10
reporting company’’ under section 229.10(f)(1) of title 11
17, Code of Federal Regulations— 12
(A) in paragraph (i), by adjusting the pub-13
lic float threshold from $250,000,000 to 14
$500,000,000; and 15
(B) in paragraph (ii)— 16
(i) by adjusting the annual revenue 17
threshold from $100,000,000 to 18
$250,000,000; and 19
(ii) in paragraph (B), by adjusting the 20
public float threshold from $700,000,000 to 21
$900,000,000. 22
(2) U
SE OF THREE-YEAR ROLLING AVERAGE AN -23
NUAL REVENUES .—The Securities and Exchange 24
Commission shall revise paragraphs (1)(ii) and 25
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(2)(iii)(B) under the definition of ‘‘smaller reporting 1
company’’ under section 229.10(f)(1) of title 17, Code 2
of Federal Regulations, by substituting ‘‘three-year 3
rolling average annual revenues’’ for ‘‘annual reve-4
nues’’. 5
(3) C
ONFORMING CHANGES .—The Securities and 6
Exchange Commission shall revise the definition of a 7
‘‘smaller reporting company’’ under sections 230.405 8
and 240.12b–2 of title 17, Code of Federal Regula-9
tions, and any other rule of the Commission in the 10
same manner as such definition is revised under 11
paragraphs (1) and (2). 12
(b) A
CCELERATEDFILERS ANDLARGEACCELERATED 13
F
ILERS.— 14
(1) L
ARGE ACCELERATED FILER .—The Securi-15
ties and Exchange Commission shall revise the defini-16
tion of a ‘‘large accelerated filer’’ under section 17
240.12b–2(2) of title 17, Code of Federal Regulations, 18
to increase the threshold amount (for the aggregate 19
worldwide market value of the voting and non-voting 20
common equity held by non-affiliates of an issuer) 21
from $700,000,000 to $750,000,000. 22
(2) T
HRESHOLD TO EXIT ACCELERATED FILER 23
STATUS.—The Securities and Exchange Commission 24
shall revise section 240.12b–2(3)(ii) of title 17, Code 25
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of Federal Regulations, to increase the threshold 1
amount (for the aggregate worldwide market value of 2
the voting and non-voting common equity held by 3
non-affiliates of an issuer) at which an issuer is no 4
longer an accelerated filer from $60,000,000 to 5
$75,000,000. 6
(3) T
HRESHOLD TO EXIT LARGE ACCELERATED 7
FILER STATUS.—The Securities and Exchange Com-8
mission shall revise section 240.12b–2(3)(iii) of title 9
17, Code of Federal Regulations, to increase the 10
threshold amount (for the aggregate worldwide market 11
value of the voting and non-voting common equity 12
held by non-affiliates of an issuer) at which an issuer 13
is no longer a large accelerated filer from 14
$560,000,000 to $750,000,000. 15
(4) E
XCLUSION OF SMALLER REPORTING COMPA -16
NIES.—The Securities and Exchange Commission 17
shall revise the definitions of an ‘‘accelerated filer’’ 18
and a ‘‘large accelerated filer’’ under paragraphs (1) 19
and (2) of section 240.12b–2 of title 17, Code of Fed-20
eral Regulations, respectively, to exclude any issuer 21
that is a smaller reporting company, as defined under 22
section 229.10(f)(1) of title 17, Code of Federal Regu-23
lations. 24
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DIVISION B—HELPING SMALL 1
BUSINESSES AND ENTRE-2
PRENEURS 3
TITLE I—UNLOCKING CAPITAL 4
FOR SMALL BUSINESSES 5
SEC. 2101. SHORT TITLE. 6
This title may be cited as the ‘‘Unlocking Capital for 7
Small Businesses Act of 2023’’. 8
SEC. 2102. SAFE HARBORS FOR PRIVATE PLACEMENT BRO-9
KERS AND FINDERS. 10
(a) I
NGENERAL.—Section 15 of the Securities Ex-11
change Act of 1934 (15 U.S.C. 78o) is amended by adding 12
at the end the following: 13
‘‘(p) P
RIVATEPLACEMENTBROKERSAFEHARBOR.— 14
‘‘(1) R
EGISTRATION REQUIREMENTS .—Not later 15
than 180 days after the date of the enactment of this 16
subsection the Commission shall promulgate regula-17
tions with respect to private placement brokers that 18
are no more stringent than those imposed on funding 19
portals. 20
‘‘(2) N
ATIONAL SECURITIES ASSOCIATIONS .—Not 21
later than 180 days after the date of the enactment 22
of this subsection the Commission shall promulgate 23
regulations that require the rules of any national se-24
curities association to allow a private placement 25
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broker to become a member of such national securities 1
association subject to reduced membership require-2
ments consistent with this subsection. 3
‘‘(3) D
ISCLOSURES REQUIRED .—Before effecting 4
a transaction, a private placement broker shall dis-5
close clearly and conspicuously, in writing, to all 6
parties to the transaction as a result of the broker’s 7
activities— 8
‘‘(A) that the broker is acting as a private 9
placement broker; 10
‘‘(B) the amount of any payment or antici-11
pated payment for services rendered as a private 12
placement broker in connection with such trans-13
action; 14
‘‘(C) the person to whom any such payment 15
is made; and 16
‘‘(D) any beneficial interest in the issuer, 17
direct or indirect, of the private placement 18
broker, of a member of the immediate family of 19
the private placement broker, of an associated 20
person of the private placement broker, or of a 21
member of the immediate family of such associ-22
ated person. 23
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‘‘(4) PRIVATE PLACEMENT BROKER DEFINED .— 1
In this subsection, the term ‘private placement broker’ 2
means a person that— 3
‘‘(A) receives transaction-based compensa-4
tion— 5
‘‘(i) for effecting a transaction by— 6
‘‘(I) introducing an issuer of secu-7
rities and a buyer of such securities in 8
connection with the sale of a business 9
effected as the sale of securities; or 10
‘‘(II) introducing an issuer of se-11
curities and a buyer of such securities 12
in connection with the placement of se-13
curities in transactions that are ex-14
empt from registration requirements 15
under the Securities Act of 1933; and 16
‘‘(ii) that is not with respect to— 17
‘‘(I) a class of publicly traded se-18
curities; 19
‘‘(II) the securities of an invest-20
ment company (as defined in section 3 21
of the Investment Company Act of 22
1940); or 23
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‘‘(III) a variable or equity-in-1
dexed annuity or other variable or eq-2
uity-indexed life insurance product; 3
‘‘(B) with respect to a transaction for which 4
such transaction-based compensation is re-5
ceived— 6
‘‘(i) does not handle or take possession 7
of the funds or securities; and 8
‘‘(ii) does not engage in an activity 9
that requires registration as an investment 10
adviser under State or Federal law; and 11
‘‘(C) is not a finder as defined under sub-12
section (q). 13
‘‘(q) F
INDERSAFEHARBOR.— 14
‘‘(1) N
ONREGISTRATION.—A finder is exempt 15
from the registration requirements of this Act. 16
‘‘(2) N
ATIONAL SECURITIES ASSOCIATIONS .—A 17
finder shall not be required to become a member of 18
any national securities association. 19
‘‘(3) F
INDER DEFINED.—In this subsection, the 20
term ‘finder’ means a person described in paragraphs 21
(A) and (B) of subsection (p)(4) that— 22
‘‘(A) receives transaction-based compensa-23
tion of equal to or less than $500,000 in any cal-24
endar year; 25
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‘‘(B) receives transaction-based compensa-1
tion in connection with transactions that result 2
in a single issuer selling securities valued at 3
equal to or less than $15,000,000 in any cal-4
endar year; 5
‘‘(C) receives transaction-based compensa-6
tion in connection with transactions that result 7
in any combination of issuers selling securities 8
valued at equal to or less than $30,000,000 in 9
any calendar year; or 10
‘‘(D) receives transaction-based compensa-11
tion in connection with fewer than 16 trans-12
actions that are not part of the same offering or 13
are otherwise unrelated in any calendar year.’’. 14
(b) V
ALIDITY OFCONTRACTSWITHREGISTEREDPRI-15
VATEPLACEMENTBROKERS ANDFINDERS.—Section 29 of 16
the Securities Exchange Act of 1934 (15 U.S.C. 78cc) is 17
amended by adding at the end the following: 18
‘‘(d) Subsection (b) shall not apply to a contract made 19
for a transaction if— 20
‘‘(1) the transaction is one in which the issuer 21
engaged the services of a broker or dealer that is not 22
registered under this Act with respect to such trans-23
action; 24
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‘‘(2) such issuer received a self-certification from 1
such broker or dealer certifying that such broker or 2
dealer is a registered private placement broker under 3
section 15(p) or a finder under section 15(q); and 4
‘‘(3) the issuer either did not know that such self- 5
certification was false or did not have a reasonable 6
basis to believe that such self-certification was false.’’. 7
(c) R
EMOVAL OF PRIVATEPLACEMENTBROKERS 8
F
ROMDEFINITIONS OFBROKER.— 9
(1) R
ECORDS AND REPORTS ON MONETARY IN -10
STRUMENTS TRANSACTIONS .—Section 5312 of title 31, 11
United States Code, is amended in subsection 12
(a)(2)(G) by inserting ‘‘with the exception of a pri-13
vate placement broker as defined in section 15(p)(4) 14
of the Securities Exchange Act of 1934 (15 U.S.C. 15
78o(p)(4))’’ before the semicolon at the end. 16
(2) S
ECURITIES EXCHANGE ACT OF 1934 .—Sec-17
tion 3(a)(4) of the Securities Exchange Act of 1934 18
(15 U.S.C. 78c(a)(4)) is amended by adding at the 19
end the following: 20
‘‘(G) P
RIVATE PLACEMENT BROKERS .—A 21
private placement broker as defined in section 22
15(p)(4) is not a broker for the purposes of this 23
Act.’’. 24
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SEC. 2103. LIMITATIONS ON STATE LAW. 1
Section 15(i) of the Securities Exchange Act of 1934 2
(15 U.S.C. 78o(i)) is amended— 3
(1) by redesignating paragraphs (3) and (4) as 4
paragraphs (4) and (5), respectively; 5
(2) by inserting after paragraph (2) the fol-6
lowing: 7
‘‘(3) P
RIVATE PLACEMENT BROKERS AND FIND -8
ERS.— 9
‘‘(A) I
N GENERAL.—No State or political 10
subdivision thereof may enforce any law, rule, 11
regulation, or other administrative action that 12
imposes greater registration, audit, financial rec-13
ordkeeping, or reporting requirements on a pri-14
vate placement broker or finder than those that 15
are required under subsections (p) and (q), re-16
spectively. 17
‘‘(B) D
EFINITION OF STATE.—For purposes 18
of this paragraph, the term ‘State’ includes the 19
District of Columbia and each territory of the 20
United States.’’; and 21
(3) in paragraph (4), as so redesignated, by 22
striking ‘‘paragraph (3)’’ and inserting ‘‘paragraph 23
(5)’’. 24
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TITLE II—SMALL BUSINESS 1
INVESTOR CAPITAL ACCESS 2
SEC. 2201. SHORT TITLE. 3
This title may be cited as the ‘‘Small Business Investor 4
Capital Access Act’’. 5
SEC. 2202. INFLATION ADJUSTMENT FOR THE EXEMPTION 6
THRESHOLD FOR CERTAIN INVESTMENT AD-7
VISERS OF PRIVATE FUNDS. 8
Section 203(m) of the Investment Advisers Act of 1940 9
(15 U.S.C. 80b–3(m)) is amended by adding at the end the 10
following: 11
‘‘(5) I
NFLATION ADJUSTMENT.—The Commission 12
shall adjust the dollar amount described under para-13
graph (1)— 14
‘‘(A) upon enactment of this paragraph, to 15
reflect the change in the Consumer Price Index 16
for All Urban Consumers published by the Bu-17
reau of Labor Statistics of the Department of 18
Labor between the date of enactment of the Pri-19
vate Fund Investment Advisers Registration Act 20
of 2010 and the date of enactment of this para-21
graph; and 22
‘‘(B) annually thereafter, to reflect the 23
change in the Consumer Price Index for All 24
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Urban Consumers published by the Bureau of 1
Labor Statistics of the Department of Labor.’’. 2
TITLE III—IMPROVING CAPITAL 3
ALLOCATION FOR NEWCOMERS 4
SEC. 2301. SHORT TITLE. 5
This title may be cited as the ‘‘Improving Capital Allo-6
cation for Newcomers Act of 2023’’. 7
SEC. 2302. QUALIFYING VENTURE CAPITAL FUNDS. 8
Section 3(c)(1) of the Investment Company Act of 1940 9
(15 U.S.C. 80a–3(c)(1)) is amended— 10
(1) in the matter preceding subparagraph (A), 11
by striking ‘‘250 persons’’ and inserting ‘‘600 per-12
sons’’; and 13
(2) in subparagraph (C)(i), by striking 14
‘‘$10,000,000’’ and inserting ‘‘$150,000,000’’. 15
TITLE IV—SMALL ENTRE-16
PRENEURS’ EMPOWERMENT 17
AND DEVELOPMENT 18
SEC. 2401. SHORT TITLE. 19
This title may be cited as the ‘‘Small Entrepreneurs’ 20
Empowerment and Development Act of 2023’’ or the 21
‘‘SEED Act of 2023’’. 22
SEC. 2402. MICRO-OFFERING EXEMPTION. 23
(a) I
NGENERAL.—Section 4 of the Securities Act of 24
1933 (15 U.S.C. 77d) is amended— 25
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(1) in subsection (a), by adding at the end the 1
following: 2
‘‘(8) transactions meeting the requirements of 3
subsection (f).’’; and 4
(2) by adding at the end the following: 5
‘‘(f) M
ICRO-OFFERINGS.—The transactions referred to 6
in subsection (a)(8) are transactions involving the sale of 7
securities by an issuer (including all entities controlled by 8
or under common control with the issuer) where the aggre-9
gate amount of all securities sold by the issuer, including 10
any amount sold in reliance on the exemption provided 11
under subsection (a)(8), during the 12-month period pre-12
ceding such transaction, does not exceed $250,000.’’. 13
(b) D
ISQUALIFICATION.— 14
(1) I
N GENERAL.—Not later than 270 days after 15
the date of enactment of this Act, the Securities and 16
Exchange Commission shall, by rule, establish dis-17
qualification provisions under which an issuer shall 18
not be eligible to offer securities pursuant to section 19
4(a)(8) of the Securities Act of 1933, as added by this 20
section. 21
(2) I
NCLUSIONS.—Disqualification provisions re-22
quired by this subsection shall— 23
(A) be substantially similar to the provi-24
sions of section 230.506(d) of title 17, Code of 25
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Federal Regulations (or any successor thereto); 1
and 2
(B) disqualify any offering or sale of securi-3
ties by a person that— 4
(i) is subject to a final order of a cov-5
ered regulator that— 6
(I) bars the person from— 7
(aa) association with an en-8
tity regulated by the covered regu-9
lator; 10
(bb) engaging in the business 11
of securities, insurance, or bank-12
ing; or 13
(cc) engaging in savings as-14
sociation or credit union activi-15
ties; or 16
(II) constitutes a final order based 17
on a violation of any law or regulation 18
that prohibits fraudulent, manipula-19
tive, or deceptive conduct, if such final 20
order was issued within the previous 21
10-year period; or 22
(ii) has been convicted of any felony or 23
misdemeanor in connection with the pur-24
chase or sale of any security or involving 25
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the making of any false filing with the 1
Commission. 2
(3) C
OVERED REGULATOR DEFINED .—In this 3
subsection, the term ‘‘covered regulator’’ means— 4
(A) a State securities commission (or an 5
agency or officer of a State performing like func-6
tions); 7
(B) a State authority that supervises or ex-8
amines banks, savings associations, or credit 9
unions; 10
(C) a State insurance commission (or an 11
agency or officer of a State performing like func-12
tions); 13
(D) a Federal banking agency (as defined 14
under section 3 of the Federal Deposit Insurance 15
Act); and 16
(E) the National Credit Union Administra-17
tion. 18
(c) E
XEMPTIONUNDERSTATEREGULATIONS.—Sec-19
tion 18(b)(4) of the Securities Act of 1933 (15 U.S.C. 20
77r(b)(4)) is amended— 21
(1) in subparagraph (F), by striking ‘‘or’’ at the 22
end; 23
(2) in subparagraph (G), by striking the period 24
and inserting ‘‘; or’’; and 25
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(3) by adding at the end the following: 1
‘‘(H) section 4(a)(8).’’. 2
TITLE V—REGULATION A+ 3
IMPROVEMENT 4
SEC. 2501. SHORT TITLE. 5
This title may be cited as the ‘‘Regulation A+ Im-6
provement Act of 2023’’. 7
SEC. 2502. JOBS ACT-RELATED EXEMPTION. 8
Section 3(b) of the Securities Act of 1933 (15 U.S.C. 9
77c(b)) is amended— 10
(1) in paragraph (2)(A), by striking 11
‘‘$50,000,000’’ and inserting ‘‘$150,000,000, adjusted 12
for inflation by the Commission every 2 years to the 13
nearest $10,000 to reflect the change in the Consumer 14
Price Index for All Urban Consumers published by 15
the Bureau of Labor Statistics’’; and 16
(2) in paragraph (5)— 17
(A) by striking ‘‘such amount as’’ and in-18
serting: ‘‘such amount, in addition to the adjust-19
ment for inflation provided for under such para-20
graph (2)(A), as’’; and 21
(B) by striking ‘‘such amount, it’’ and in-22
serting ‘‘such amount, in addition to the adjust-23
ment for inflation provided for under such para-24
graph (2)(A), it’’. 25
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TITLE VI—DEVELOPING AND EM-1
POWERING OUR ASPIRING 2
LEADERS 3
SEC. 2601. SHORT TITLE. 4
This title may be cited as the ‘‘Developing and Em-5
powering our Aspiring Leaders Act of 2023’’ or the ‘‘DEAL 6
Act of 2023’’. 7
SEC. 2602. DEFINITIONS. 8
Not later than the end of the 180-day period beginning 9
on the date of the enactment of this Act, the Securities and 10
Exchange Commission shall, to the extent such revisions fa-11
cilitate capital formation without compromising investor 12
protection— 13
(1) revise the definition of a qualifying invest-14
ment under paragraph (c) of section 275.203(l)–1 of 15
title 17, Code of Federal Regulations— 16
(A) to include an equity security issued by 17
a qualifying portfolio company, whether ac-18
quired directly from the company or in a sec-19
ondary acquisition; and 20
(B) to specify that an investment in another 21
venture capital fund is a qualifying investment 22
under such definition; and 23
(2) revise paragraph (a) of such section to re-24
quire, as a condition of a private fund qualifying as 25
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a venture capital fund under such paragraph, that 1
the qualifying investments of the private fund are ei-2
ther— 3
(A) predominantly qualifying investments 4
that were acquired directly from a qualifying 5
portfolio company; or 6
(B) predominantly qualifying investments 7
in another venture capital fund or other venture 8
capital funds. 9
SEC. 2603. REPORTS. 10
(a) GAO R
EPORT.—The Comptroller General of the 11
United States shall issue a report to Congress on the risks 12
and impacts of concentrated sectoral counterparty risk in 13
the banking sector, in light of the failure of Silicon Valley 14
Bank. 15
(b) A
DVOCATE FORSMALLBUSINESSCAPITALFORMA-16
TIONREPORT.—The Advocate for Small Business Capital 17
Formation shall issue a report to Congress and the Securi-18
ties and Exchange Commission— 19
(1) examining the access to banking services for 20
venture funds and companies funded by venture cap-21
ital, in light of the failure of Silicon Valley Bank, es-22
pecially those funds and companies located outside of 23
the established technology and venture capital hubs of 24
California, Massachusetts, and New York; and 25
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(2) containing any policy recommendations of 1
the Advocate. 2
TITLE VII—IMPROVING 3
CROWDFUNDING OPPORTUNI-4
TIES 5
SEC. 2701. SHORT TITLE. 6
This title may be cited as the ‘‘Improving 7
Crowdfunding Opportunities Act’’. 8
SEC. 2702. CROWDFUNDING REVISIONS. 9
(a) E
XEMPTIONFROMSTATEREGULATION.—Section 10
18(b)(4)(A) of the Securities Act of 1933 (15 U.S.C. 11
77r(b)(4)(A)) is amended by striking ‘‘pursuant to section’’ 12
and all that follows through the semicolon at the end and 13
inserting the following: ‘‘pursuant to— 14
‘‘(i) section 13 or 15(d) of the Securi-15
ties Exchange Act of 1934 (15 U.S.C. 78m, 16
78o(d)); or 17
‘‘(ii) section 4A(b) or any regulation 18
issued under that section;’’. 19
(b) L
IABILITY FORMATERIALMISSTATEMENTS AND 20
O
MISSIONS.—Section 4A(c) of the Securities Act of 1933 21
(15 U.S.C. 77d–1(c)) is amended— 22
(1) by redesignating paragraph (3) as para-23
graph (4); and 24
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(2) by inserting after paragraph (2) the fol-1
lowing: 2
‘‘(3) L
IABILITY OF FUNDING PORTALS .—For the 3
purposes of this subsection, a funding portal, as that 4
term is defined in section 3(a) of the Securities Ex-5
change Act of 1934 (15 U.S.C. 78c(a)), shall not be 6
considered to be an issuer unless, in connection with 7
the offer or sale of a security, the funding portal 8
knowingly— 9
‘‘(A) makes any untrue statement of a ma-10
terial fact or omits to state a material fact in 11
order to make the statements made, in light of 12
the circumstances under which they are made, 13
not misleading; or 14
‘‘(B) engages in any act, practice, or course 15
of business which operates or would operate as a 16
fraud or deceit upon any person.’’. 17
(c) A
PPLICABILITY OFBANKSECRECYACTREQUIRE-18
MENTS.— 19
(1) S
ECURITIES ACT OF 1933.—Section 4A(a) of 20
the Securities Act of 1933 (15 U.S.C. 77d–1(a)) is 21
amended— 22
(A) in paragraph (11), by striking ‘‘and’’ 23
at the end; 24
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(B) in paragraph (12), by striking the pe-1
riod at the end and inserting ‘‘; and’’; and 2
(C) by adding at the end the following: 3
‘‘(13) not be subject to the recordkeeping and re-4
porting requirements relating to monetary instru-5
ments under subchapter II of chapter 53 of title 31, 6
United States Code.’’. 7
(2) T
ITLE 31, UNITED STATES CODE .—Section 8
5312 of title 31, United States Code, is amended by 9
striking subsection (c) and inserting the following: 10
‘‘(c) A
DDITIONALCLARIFICATION.—The term ‘finan-11
cial institution’ (as defined in subsection (a))— 12
‘‘(1) includes any futures commission merchant, 13
commodity trading advisor, or commodity pool oper-14
ator registered, or required to register, under the 15
Commodity Exchange Act (7 U.S.C. 1 et seq.); and 16
‘‘(2) does not include a funding portal, as that 17
term is defined in section 3(a) of the Securities Ex-18
change Act of 1934 (15 U.S.C. 78c(a)).’’. 19
(d) P
ROVISION OFIMPERSONALINVESTMENTADVICE 20
ANDRECOMMENDATIONS.—Section 3(a) of the Securities 21
Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended— 22
(1) by redesignating the second paragraph (80) 23
(relating to funding portals) as paragraph (81); and 24
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(2) in paragraph (81)(A), as so redesignated, by 1
inserting after ‘‘recommendations’’ the following: 2
‘‘(other than by providing impersonal investment ad-3
vice by means of written material, or an oral state-4
ment, that does not purport to meet the objectives or 5
needs of a specific individual or account)’’. 6
(e) T
ARGETAMOUNTS OFCERTAINEXEMPTEDOFFER-7
INGS.—The Securities and Exchange Commission shall 8
amend paragraph (t)(1) of section 227.201 of title 17, Code 9
of Federal Regulations so that such paragraph applies with 10
respect to an issuer offering or selling securities in reliance 11
on section 4(a)(6) of the Securities Act of 1933 (15 U.S.C. 12
77d(a)(6)) if— 13
(1) the offerings of such issuer, together with all 14
other amounts sold under such section 4(a)(6) within 15
the preceding 12-month period, have, in the aggregate, 16
a target amount of more than $124,000 but not more 17
than $250,000; 18
(2) the financial statements of such issuer that 19
have either been reviewed or audited by a public ac-20
countant that is independent of the issuer are un-21
available at the time of filing; and 22
(3) such issuer provides a statement that finan-23
cial information certified by the principal executive 24
officer of the issuer has been provided instead of fi-25
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nancial statements reviewed by a public accountant 1
that is independent of the issuer. 2
(f) E
XEMPTIONAVAILABLE TOINVESTMENTCOMPA-3
NIES.—Section 4A(f) of the Securities Act of 1933 (15 4
U.S.C. 77d–1(f)) is amended— 5
(1) in paragraph (2), by inserting ‘‘or’’ after the 6
semicolon; 7
(2) by striking paragraph (3); and 8
(3) by redesignating paragraph (4) as para-9
graph (3). 10
(g) N
ON-ACCREDITEDINVESTORREQUIREMENTS.— 11
Section 4(a)(6) of the Securities Act of 1933 (15 U.S.C. 12
77d(a)(6))) is amended— 13
(1) in subparagraph (A), by striking 14
‘‘$1,000,000’’ and inserting ‘‘$10,000,000’’; and 15
(2) in subparagraph (B), by striking ‘‘does not 16
exceed’’ and all that follows through ‘‘more than 17
$100,000’’ and inserting ‘‘does not exceed 10 percent 18
of the annual income or net worth of such investor’’. 19
(h) T
ECHNICALCORRECTION.—The Securities Act of 20
1933 (15 U.S.C. 77a et seq.) is amended— 21
(1) by striking the term ‘‘section 4(6)’’ each place 22
such term appears and inserting ‘‘section 4(a)(6)’’; 23
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(2) by striking the term ‘‘section 4(6)(B)’’ each 1
place such term appears and inserting ‘‘section 2
4(a)(6)(B)’’; and 3
(3) in section 4A(f), by striking ‘‘Section 4(6)’’ 4
and inserting ‘‘Section 4(a)(6)’’. 5
TITLE VIII—RESTORING THE 6
SECONDARY TRADING MARKET 7
SEC. 2801. SHORT TITLE. 8
This title may be cited as the ‘‘Restoring the Secondary 9
Trading Market Act’’. 10
SEC. 2802. EXEMPTION FROM STATE REGULATION. 11
Section 18(a) of the Securities Act of 1933 (15 U.S.C. 12
77r(a)) is amended— 13
(1) in paragraph (2), by striking ‘‘or’’ at the 14
end; 15
(2) in paragraph (3), by striking the period at 16
the end and inserting ‘‘; or’’; and 17
(3) by adding at the end the following: 18
‘‘(4) shall directly or indirectly prohibit, limit, 19
or impose any conditions upon the off-exchange sec-20
ondary trading (as such term is defined by the Com-21
mission) in securities of an issuer that makes current 22
information publicly available, including— 23
‘‘(A) the information required in the peri-24
odic and current reports described under para-25
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graph (b) of section 230.257 of title 17, Code of 1
Federal Regulations; or 2
‘‘(B) the documents and information re-3
quired with respect to Tier 2 offerings, as defined 4
in section 230.251(a) of title 17, Code of Federal 5
Regulations.’’. 6
DIVISION C—INCREASING 7
ACCESS TO PRIVATE MARKETS 8
TITLE I—GIG WORKER EQUITY 9
COMPENSATION 10
SEC. 3101. SHORT TITLE. 11
This title may be cited as the ‘‘Gig Worker Equity 12
Compensation Act’’. 13
SEC. 3102. EXTENSION OF RULE 701. 14
(a) I
NGENERAL.—The exemption provided under sec-15
tion 230.701 of title 17, Code of Federal Regulations, shall 16
apply to individuals (other than employees) providing 17
goods for sale, labor, or services for remuneration to either 18
an issuer or to customers of an issuer to the same extent 19
as such exemptions apply to employees of the issuer. For 20
purposes of the previous sentence, the term ‘‘customers’’ 21
may, at the election of an issuer, include users of the issuer’s 22
platform. 23
(b) A
DJUSTMENT FORINFLATION.—The Securities and 24
Exchange Commission shall annually adjust the dollar fig-25
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ure under section 230.701(e) of title 17, Code of Federal 1
Regulations, to reflect the percentage change in the Con-2
sumer Price Index for All Urban Consumers published by 3
the Bureau of Labor Statistics of the Department of Labor. 4
(c) R
ULEMAKING.—The Securities and Exchange Com-5
mission— 6
(1) shall revise section 230.701 of title 17, Code 7
of Federal Regulations, to reflect the requirements of 8
this section; and 9
(2) may not revise such section 230.701 in any 10
manner that would have the effect of restricting access 11
to equity compensation for employees or individuals 12
described under subsection (a). 13
SEC. 3103. PREEMPTION OF CERTAIN PROVISIONS OF 14
STATE LAW. 15
Any provision of a State law with respect to wage 16
rates or benefits that creates a presumption that an indi-17
vidual providing goods for sale, labor, or services for remu-18
neration for a person is an employee of such person under 19
such law is preempted. 20
SEC. 3104. GAO STUDY. 21
Not later than the end of the 3-year period beginning 22
on the date of enactment of this Act, the Comptroller Gen-23
eral of the United States shall carry out a study on the 24
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effects of this title and submit a report on such study to 1
the Congress. 2
TITLE II—INVESTMENT 3
OPPORTUNITY EXPANSION 4
SEC. 3201. SHORT TITLE. 5
This title may be cited as the ‘‘Investment Opportunity 6
Expansion Act’’. 7
SEC. 3202. INVESTMENT THRESHOLDS TO QUALIFY AS AN 8
ACCREDITED INVESTOR. 9
Section 2(a)(15) of the Securities Act of 1933 (15 10
U.S.C. 77b(a)(15)) is amended— 11
(1) by striking ‘‘(15) The term ‘accredited inves-12
tor’ shall mean—’’ and inserting the following: 13
‘‘(15) A
CCREDITED INVESTOR.— 14
‘‘(A) I
N GENERAL.—The term ‘accredited 15
investor’ means—’’; 16
(2) in clause (i), by striking ‘‘or’’ at the end; 17
(3) in clause (ii), by striking the period at the 18
end and inserting a semicolon; and 19
(4) by adding at the end the following: 20
‘‘(iii) with respect to a proposed trans-21
action, any individual whose aggregate in-22
vestment, at the completion of such trans-23
action, in securities with respect to which 24
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there has not been a public offering is not 1
more than 10 percent of the greater of— 2
‘‘(I) the net assets of the indi-3
vidual; or 4
‘‘(II) the annual income of the in-5
dividual;’’. 6
TITLE III—RISK DISCLOSURE 7
AND INVESTOR ATTESTATION 8
SEC. 3301. SHORT TITLE. 9
This title may be cited as the ‘‘Risk Disclosure and 10
Investor Attestation Act’’. 11
SEC. 3302. INVESTOR ATTESTATION. 12
(a) I
NGENERAL.—Section 2(a)(15) of the Securities 13
Act of 1933 (15 U.S.C. 77b(a)(15)), as amended by section 14
3202, is further amended by adding at the end the fol-15
lowing: 16
‘‘(iv) with respect to an issuer, any in-17
dividual that has attested to the issuer that 18
the individual understands the risks of in-19
vestment in private issuers, using such form 20
as the Commission shall establish, by rule, 21
but which form may not be longer than 2 22
pages in length; or’’. 23
(b) R
ULEMAKING.—Not later than the end of the 1- 24
year period beginning on the date of enactment of this Act, 25
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•HR 2799 RH
the Securities and Exchange Commission shall issue rules 1
to carry out the amendments made by subsection (a), in-2
cluding establishing the form required under such amend-3
ments. 4
TITLE IV—ACCREDITED INVES-5
TORS INCLUDE INDIVIDUALS 6
RECEIVING ADVICE FROM 7
CERTAIN PROFESSIONALS 8
SEC. 3401. ACCREDITED INVESTORS INCLUDE INDIVIDUALS 9
RECEIVING ADVICE FROM CERTAIN PROFES-10
SIONALS. 11
(a) S
ECURITIESACT OF1933.—Section 2(a)(15) of the 12
Securities Act of 1933 (15 U.S.C. 77b(a)(15)), as amended 13
by sections 3202 and 3302, is further amended by adding 14
at the end the following: 15
‘‘(v) any individual receiving individ-16
ualized investment advice or individualized 17
investment recommendations with respect to 18
the applicable transaction from an indi-19
vidual described under section 20
203.501(a)(10) of title 17, Code of Federal 21
Regulations. 22
‘‘(B) D
EFINITIONS.—In subparagraph 23
(A)(v): 24
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•HR 2799 RH
‘‘(i) INVESTMENT ADVICE.—The term 1
‘investment advice’ shall be interpreted con-2
sistently with the interpretation of the 3
phrase ‘engages in the business of advising 4
others, either directly or through publica-5
tions or writings, as to the value of securi-6
ties or as to the advisability of investing in, 7
purchasing, or selling securities’ under sec-8
tion 202(a)(11) of the Investment Advisers 9
Act of 1940 (15 U.S.C. 80b–2(a)(11)). 10
‘‘(ii) I
NVESTMENT RECOMMENDA -11
TION.—The term ‘investment recommenda-12
tion’ shall be interpreted consistently with 13
the interpretation of the term ‘recommenda-14
tion’ under section 240.15l-1 of title 17, 15
Code of Federal Regulations.’’. 16
(b) C
ONFORMINGCHANGES TOREGULATIONS.—The 17
Securities and Exchange Commission shall revise section 18
203.501(a) of title 17, Code of Federal Regulations, and any 19
other definition of ‘‘accredited investor’’ in a rule of the 20
Commission in the same manner as such definition is re-21
vised under subsection (a). 22
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112
118
TH
CONGRESS
1
ST
S
ESSION
H. R. 2799
[Report No. 118–143, Part I]
A BILL
To make reforms to the capital markets of the
United States, and for other purposes.
J
ULY
17, 2023
Reported from the Committee on Financial Services with
an amendment
J
ULY
17, 2023
Committee on Education and the Workforce discharged;
committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
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