Clarification of general solicitation

(a)

Angel investor group defined

The term angel investor group means any group that—(1)is composed of accredited investors;(2)holds regular meetings and has defined processes and procedures for making investment decisions, either individually or among the membership of the group as a whole; and(3)is neither associated nor affiliated with brokers, dealers, or investment advisers.(b)

In general

Not later than 6 months after the date of enactment of this Act, the Securities and Exchange Commission shall revise Regulation D (17 CFR 230.500 et seq.) to specify that the prohibition against general solicitation or general advertising contained in section 230.502(c) of title 17, Code of Federal Regulations, shall not apply to a presentation or other communication made by or on behalf of an issuer which is made at an event in which more than one issuer participates—(1)sponsored by—(A)the United States or any territory thereof, the District of Columbia, any State, a federally recognized Indian Tribe, a political subdivision of any State, territory, or federally recognized Indian Tribe, or any agency or public instrumentality of any of the foregoing;(B)a college, university, or other institution of higher education;(C)a nonprofit organization;(D)an angel investor group;(E)an incubator or accelerator;(F)a venture forum, venture capital association, or trade association, other than an association created solely for the purpose of sponsoring an event described under this subsection; or(G)any other group, person, or entity as the Securities and Exchange Commission may determine by rule;(2)that is not held in any facility that is owned or operated by a religious organization, other than an institution of higher education that is accredited and operated primarily for post-secondary education;(3)where any advertising for the event does not reference any specific offering of securities by the issuer;(4)the sponsor of which—(A)does not make investment recommendations or provide investment advice to event attendees;(B)does not engage in an active role in any investment negotiations between the issuer and investors attending the event;(C)does not charge event attendees any fees other than reasonable administrative fees;(D)does not receive any compensation for making introductions between investors attending the event and issuers, or for investment negotiations between such parties; and(E)does not receive any compensation with respect to such event that would require registration of the sponsor as a broker or a dealer under the Securities Exchange Act of 1934, or as an investment advisor under the Investment Advisers Act of 1940;(5)where no information regarding an offering of securities by the issuer is communicated or distributed by or on behalf of the issuer, other than—(A)that the issuer is in the process of offering securities or planning to offer securities;(B)the type and amount of securities being offered;(C)the amount of securities being offered and the unsubscribed amount; and(D)the intended use of proceeds of the offering; and(6)in the case of an event that allows attendees to participate virtually, rather than in person, where online participation in the event is limited to—(A)individuals who are members of, or otherwise associated with the sponsor organization;(B)individuals that the sponsor reasonably believes are accredited investors; or(C)individuals who have been invited to the event by the sponsor based on industry or investment-related experience reasonably selected by the sponsor in good faith and disclosed in the public communications about the event.(c)

Rule of construction

Subsection (b) may only be construed as requiring the Securities and Exchange Commission to amend the requirements of Regulation D with respect to presentations and communications, and not with respect to purchases or sales.