II
118THCONGRESS
2
DSESSION S. 4493
To amend the Securities Exchange Act of 1934 to create a safe harbor
for finders and private placement brokers, and for other purposes.
IN THE SENATE OF THE UNITED STATES
JUNE11, 2024
Mr. C
RAMERintroduced the following bill; which was read twice and referred
to the Committee on Banking, Housing, and Urban Affairs
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.
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. 3
This Act may be cited as the ‘‘Unlocking Capital for 4
Small Businesses Act of 2024’’. 5
SEC. 2. SAFE HARBORS FOR PRIVATE PLACEMENT BRO-6
KERS AND FINDERS. 7
(a) I
NGENERAL.—Section 15 of the Securities Ex-8
change Act of 1934 (15 U.S.C. 78o) is amended by adding 9
at the end the following: 10
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•S 4493 IS
‘‘(p) PRIVATEPLACEMENTBROKERSAFEHAR-1
BOR.— 2
‘‘(1) R
EGISTRATION REQUIREMENTS .—Not 3
later than 270 days after the date of the enactment 4
of this subsection the Commission shall promulgate 5
regulations with respect to private placement brokers 6
that are no more stringent than those imposed on 7
funding portals. Not later than 270 days after the 8
publication of the proposed regulations in the Fed-9
eral Register, the Commission shall promulgate final 10
rules. 11
‘‘(2) N
ATIONAL SECURITIES ASSOCIATIONS .— 12
Not later than 270 days after the date of the enact-13
ment of this subsection the Commission shall pro-14
mulgate regulations that require the rules of any na-15
tional securities association to allow a private place-16
ment broker to become a member of such national 17
securities association subject to reduced membership 18
requirements consistent with this subsection. Not 19
later than 270 days after the publication of the pro-20
posed regulations in the Federal Register, the Com-21
mission shall promulgate final rules. 22
‘‘(3) D
ISCLOSURES REQUIRED .—Before the 23
consummation of a transaction effecting a private 24
placement, a private placement broker shall disclose 25
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clearly and conspicuously, in writing, to all parties 1
to the transaction as a result of the broker’s activi-2
ties— 3
‘‘(A) that the broker is acting as a private 4
placement broker; 5
‘‘(B) the amount of any compensation or 6
anticipated compensation for services rendered 7
as a private placement broker in connection 8
with such transaction; 9
‘‘(C) the person to whom any such com-10
pensation is made; and 11
‘‘(D) any beneficial interest in the issuer, 12
direct or indirect, of the private placement 13
broker, of a member of the immediate family of 14
the private placement broker, of an associated 15
person of the private placement broker, or of a 16
member of the immediate family of such associ-17
ated person. 18
‘‘(4) P
RIVATE PLACEMENT BROKER DE -19
FINED.—In this subsection, the term ‘private place-20
ment broker’ means a person that— 21
‘‘(A) receives transaction-based compensa-22
tion— 23
‘‘(i) for effecting a transaction by— 24
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‘‘(I) introducing an issuer of se-1
curities and a buyer of such securities 2
in connection with the sale of a busi-3
ness effected as the sale of securities; 4
or 5
‘‘(II) introducing an issuer of se-6
curities and a buyer of such securities 7
in connection with the placement of 8
securities in transactions that are ex-9
empt from registration requirements 10
under the Securities Act of 1933; and 11
‘‘(ii) that is not with respect to— 12
‘‘(I) a class of publicly traded se-13
curities; 14
‘‘(II) the securities of an invest-15
ment company (as defined in section 3 16
of the Investment Company Act of 17
1940); or 18
‘‘(III) a variable or equity-in-19
dexed annuity or other variable or eq-20
uity-indexed life insurance product; 21
‘‘(B) with respect to a transaction for 22
which such transaction-based compensation is 23
received— 24
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‘‘(i) does not handle or take posses-1
sion of the funds or securities; and 2
‘‘(ii) does not engage in an activity 3
that requires registration as an investment 4
adviser under State or Federal law; and 5
‘‘(C) is not a finder as defined under sub-6
section (q). 7
‘‘(q) F
INDERSAFEHARBOR.— 8
‘‘(1) N
ONREGISTRATION.—A finder is exempt 9
from the registration requirements of this Act. 10
‘‘(2) N
ATIONAL SECURITIES ASSOCIATIONS .—A 11
finder shall not be required to become a member of 12
any national securities association. 13
‘‘(3) F
INDER DEFINED.—In this subsection, the 14
term ‘finder’ means a person described in para-15
graphs (A) and (B) of subsection (p)(4) that— 16
‘‘(A) receives transaction-based compensa-17
tion of equal to or less than $500,000 in any 18
calendar year; 19
‘‘(B) receives transaction-based compensa-20
tion in connection with transactions that result 21
in a single issuer selling securities valued at 22
equal to or less than $15,000,000 in any cal-23
endar year; 24
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‘‘(C) receives transaction-based compensa-1
tion in connection with transactions that result 2
in any combination of issuers selling securities 3
valued at equal to or less than $30,000,000 in 4
any calendar year; or 5
‘‘(D) receives transaction-based compensa-6
tion in connection with fewer than 16 trans-7
actions that are not part of the same offering 8
or are otherwise unrelated in any calendar year. 9
‘‘(4) A
DJUSTMENT FOR INFLATION .—The 10
amounts described in paragraph (3) shall be in-11
creased each year by an amount equal to the per-12
centage increase, if any, in the Consumer Price 13
Index, as determined by the Department of Labor or 14
its successor.’’. 15
(b) V
ALIDITY OFCONTRACTSWITHREGISTERED 16
P
RIVATEPLACEMENTBROKERS ANDFINDERS.—Section 17
29 of the Securities Exchange Act (15 U.S.C. 78cc) is 18
amended by adding at the end the following: 19
‘‘(d) Subsection (b) shall not apply to a contract 20
made for a transaction if— 21
‘‘(1) the transaction is one in which the issuer 22
engaged the services of a broker or dealer that is not 23
registered under this Act with respect to such trans-24
action; 25
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‘‘(2) such issuer received a self-certification 1
from such broker or dealer certifying that such 2
broker or dealer is a registered private placement 3
broker under section 15(p) or a finder under section 4
15(q); and 5
‘‘(3) the issuer either did not know that such 6
self-certification was false or did not have a reason-7
able basis to believe that such self-certification was 8
false.’’. 9
(c) R
EMOVAL OF PRIVATEPLACEMENTBROKERS 10
F
ROMDEFINITIONS OFBROKER.— 11
(1) R
ECORDS AND REPORTS ON MONETARY IN -12
STRUMENTS TRANSACTIONS .—Section 5312 of title 13
31, United States Code, is amended in subsection 14
(a)(2)(G) by inserting ‘‘with the exception of a pri-15
vate placement broker as defined in section 15(p)(4) 16
of the Securities Exchange Act of 1934 (15 U.S.C. 17
78o(p)(4))’’ before the semicolon at the end. 18
(2) S
ECURITIES EXCHANGE ACT OF 1934 .—Sec-19
tion 3(a)(4) of the Securities Exchange Act of 1934 20
(15 U.S.C. 78c(a)(4)) is amended by adding at the 21
end the following: 22
‘‘(G) P
RIVATE PLACEMENT BROKERS .—A 23
private placement broker as defined in section 24
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15(p)(4) is not a broker for the purposes of this 1
Act.’’. 2
SEC. 3. LIMITATIONS ON STATE LAW. 3
Section 15(i) of the Securities Exchange Act of 1934 4
(15 U.S.C. 78o(i)) is amended— 5
(1) by redesignating paragraph (3) as para-6
graph (4); and 7
(2) by inserting after paragraph (2) the fol-8
lowing: 9
‘‘(3) P
RIVATE PLACEMENT BROKERS AND FIND -10
ERS.— 11
‘‘(A) I
N GENERAL.—No State or political 12
subdivision thereof may enforce any law, rule, 13
regulation, or other administrative action that 14
imposes greater registration, audit, financial 15
recordkeeping, or reporting requirements on a 16
private placement broker or finder than those 17
that are required under subsections (p) and (q), 18
respectively. 19
‘‘(B) D
EFINITION OF STATE .—For pur-20
poses of this paragraph, the term ‘State’ in-21
cludes the District of Columbia and each terri-22
tory of the United States.’’. 23
Æ
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