[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 2190 Introduced in Senate (IS)]

112th CONGRESS
  2d Session
                                S. 2190

To amend the securities laws to provide for registration exemptions for 
        certain crowdfunded securities, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 13, 2012

 Mr. Merkley (for himself, Mr. Bennet, Mr. Brown of Massachusetts, and 
 Ms. Landrieu) introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To amend the securities laws to provide for registration exemptions for 
        certain crowdfunded securities, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Capital Raising Online While 
Deterring Fraud and Unethical Non-Disclosure Act of 2012'' or the 
``CROWDFUND Act''.

SEC. 2. CROWDFUNDING EXEMPTION.

    (a) Securities Act of 1933.--Section 4 of the Securities Act of 
1933 (15 U.S.C. 77d) is amended by adding at the end the following:
            ``(6) transactions involving the offer or sale of 
        securities by an issuer (including all entities controlled by 
        or under common control with the issuer), provided that--
                    ``(A) the aggregate amount sold to all investors by 
                the issuer, including any amount sold in reliance on 
                the exemption provided under this paragraph during the 
                12-month period preceding the date of such transaction, 
                is not more than $1,000,000;
                    ``(B) the aggregate amount sold to any investor by 
                an issuer, including any amount sold in reliance on the 
                exemption provided under this paragraph during the 12-
                month period preceding the date of such transaction, 
                does not exceed--
                            ``(i) the greater of $2,000 or 5 percent of 
                        the annual income or net worth of such 
                        investor, as applicable, if either the annual 
                        income or the net worth of the investor is less 
                        than $100,000; and
                            ``(ii) 10 percent of the annual income or 
                        net worth of such investor, as applicable, not 
                        to exceed a maximum aggregate amount sold of 
                        $100,000, if either the annual income or net 
                        worth of the investor is equal to or more than 
                        $100,000;
                    ``(C) the transaction is conducted through a broker 
                or funding portal that complies with the requirements 
                of section 4A(a); and
                    ``(D) the issuer complies with the requirements of 
                section 4A(b).''.
    (b) Requirements To Qualify for Crowdfunding Exemption.--The 
Securities Act of 1933 (15 U.S.C. 77a et seq.) is amended by inserting 
after section 4 the following:

``SEC. 4A. REQUIREMENTS WITH RESPECT TO CERTAIN SMALL TRANSACTIONS.

    ``(a) Requirements on Intermediaries.--A person engaged in the 
business of effecting transactions in securities for the account of 
others pursuant to section 4(6) shall--
            ``(1) register with the Commission as--
                    ``(A) a broker; or
                    ``(B) a funding portal (as defined in section 
                3(a)(80) of the Securities Exchange Act of 1934);
            ``(2) register with any applicable self-regulatory 
        organization (as defined in section 3(a)(26) of the Securities 
        Exchange Act of 1934);
            ``(3) provide such disclosures, including disclosures 
        related to risks and other investor education materials, as the 
        Commission shall, by rule, determine appropriate;
            ``(4) ensure that each investor--
                    ``(A) reviews investor-education information, in 
                accordance with standards established by the 
                Commission, by rule;
                    ``(B) positively affirms that the investor 
                understands that the investor is risking the loss of 
                the entire investment, and that the investor could bear 
                such a loss; and
                    ``(C) answers questions demonstrating--
                            ``(i) an understanding of the level of risk 
                        generally applicable to investments in 
                        startups, emerging businesses, and small 
                        issuers;
                            ``(ii) an understanding of the risk of 
                        illiquidity; and
                            ``(iii) an understanding of such other 
                        matters as the Commission determines 
                        appropriate, by rule;
            ``(5) take such measures to reduce the risk of fraud with 
        respect to such transactions, as established by the Commission, 
        by rule, including obtaining a background and securities 
        enforcement regulatory history check on each officer, director, 
        and person holding more than 20 percent of the outstanding 
        equity of every issuer whose securities are offered by such 
        person;
            ``(6) not later than 21 days prior to the first day on 
        which securities are sold to any investor (or such other period 
        as the Commission may establish), make available to the 
        Commission and to potential investors any information provided 
        by the issuer pursuant to subsection (b);
            ``(7) ensure that all offering proceeds are only provided 
        to the issuer when the aggregate capital raised from all 
        investors is equal to or greater than a target offering amount, 
        and allow all investors to cancel their commitments to invest, 
        as the Commission shall, by rule, determine appropriate;
            ``(8) make such efforts as the Commission determines 
        appropriate, by rule, to ensure that no investor in a 12-month 
        period has purchased securities offered pursuant to section 
        4(6) that, in the aggregate, from all issuers, exceed the 
        investment limits set forth in section 4(6)(B);
            ``(9) take such steps to protect the privacy of information 
        collected from investors as the Commission shall, by rule, 
        determine appropriate;
            ``(10) not compensate promoters, finders, or lead 
        generators for providing the broker or funding portal with the 
        personal identifying information of any potential investor;
            ``(11) prohibit its directors, officers, or partners (or 
        any person occupying a similar status or performing a similar 
        function) from having any financial interest in an issuer using 
        its services; and
            ``(12) meet such other requirements as the Commission may, 
        by rule, prescribe, for the protection of investors and in the 
        public interest.
    ``(b) Requirements for Issuers.--For purposes of section 4(6), an 
issuer who offers or sells securities shall--
            ``(1) be organized under and subject to the laws of a State 
        or territory of the United States or the District of Columbia;
            ``(2) not be--
                    ``(A) subject to the requirement to file reports 
                pursuant to section 13 or section 15(d) of the 
                Securities Exchange Act of 1934 (15 U.S.C. 78m, 
                78p(d)); or
                    ``(B) treated as--
                            ``(i) an investment company, as defined in 
                        section 3 of the Investment Company Act of 1940 
                        (15 U.S.C. 80a-3);
                            ``(ii) an issuer excluded from the 
                        Investment Company Act of 1940 (15 U.S.C. 80a 
                        et seq.); or
                            ``(iii) such other company as the 
                        Commission, by rule or regulation, determines 
                        appropriate;
            ``(3) file with the Commission and provide to investors and 
        the relevant broker or funding portal, and make available to 
        potential investors--
                    ``(A) the name, legal status, physical address, and 
                website address of the issuer;
                    ``(B) the names of the directors and officers (and 
                any persons occupying a similar status or performing a 
                similar function), and each person holding more than 20 
                percent of the shares of the issuer;
                    ``(C) a description of the business of the issuer 
                and the anticipated business plan of the issuer;
                    ``(D) a description of the financial condition of 
                the issuer, including, for offerings that, together 
                with all other offerings of the issuer under section 
                4(6) within the preceding 12-month period, have, in the 
                aggregate, target offering amounts of--
                            ``(i) $100,000 or less--
                                    ``(I) the income tax returns filed 
                                by the issuer for the most recently 
                                completed year (if any); and
                                    ``(II) financial statements of the 
                                issuer, which shall be certified by the 
                                principal executive officer of the 
                                issuer to be true and complete in all 
                                material respects;
                            ``(ii) more than $100,000, but not more 
                        than $500,000, financial statements reviewed by 
                        a public accountant who is independent of the 
                        issuer, using professional standards and 
                        procedures for such review or standards and 
                        procedures established by the Commission, by 
                        rule, for such purpose; and
                            ``(iii) more than $500,000 (or such other 
                        amount as the Commission may establish, by 
                        rule), audited financial statements;
                    ``(E) a description of the stated purpose and 
                intended use of the proceeds of the offering sought by 
                the issuer with respect to the target offering amount;
                    ``(F) the target offering amount, the deadline to 
                reach the target offering amount, and regular updates 
                regarding the progress of the issuer in meeting the 
                target offering amount;
                    ``(G) the price to the public of the securities or 
                the method for determining the price, provided that, 
                prior to sale, each investor shall be provided in 
                writing the final price and all required disclosures, 
                with a reasonable opportunity to rescind the commitment 
                to purchase the securities;
                    ``(H) a description of the ownership and capital 
                structure of the issuer, including--
                            ``(i) terms of the securities of the issuer 
                        being offered and each other class of security 
                        of the issuer, including how such terms may be 
                        modified, and a summary of the differences 
                        between such securities, including how the 
                        rights of the securities being offered may be 
                        materially limited, diluted, or qualified by 
                        the rights of any other class of security of 
                        the issuer;
                            ``(ii) a description of how the exercise of 
                        the rights held by the principal shareholders 
                        of the issuer could negatively impact the 
                        purchasers of the securities being offered;
                            ``(iii) the name and ownership level of 
                        each existing shareholder who owns more than 20 
                        percent of any class of the securities of the 
                        issuer;
                            ``(iv) how the securities being offered are 
                        being valued, and examples of methods for how 
                        such securities may be valued by the issuer in 
                        the future, including during subsequent 
                        corporate actions; and
                            ``(v) the risks to purchasers of the 
                        securities relating to minority ownership in 
                        the issuer, the risks associated with corporate 
                        actions, including additional issuances of 
                        shares, a sale of the issuer or of assets of 
                        the issuer, or transactions with related 
                        parties; and
                    ``(I) such other information as the Commission may, 
                by rule, prescribe, for the protection of investors and 
                in the public interest;
            ``(4) not advertise the terms of the offering, except for 
        notices which direct investors to the funding portal or broker;
            ``(5) not compensate or commit to compensate, directly or 
        indirectly, any person to promote its offerings through 
        communication channels provided by a broker or funding portal, 
        without taking such steps as the Commission shall, by rule, 
        require to ensure that such person clearly discloses the 
        receipt, past or prospective, of such compensation, upon each 
        instance of such promotional communication;
            ``(6) not less than annually, file with the Commission and 
        provide to investors reports of the results of operations and 
        financial statements of the issuer, as the Commission shall, by 
        rule, determine appropriate, subject to such exceptions and 
        termination dates as the Commission may establish, by rule; and
            ``(7) comply with such other requirements as the Commission 
        may, by rule, prescribe, for the protection of investors and in 
        the public interest.
    ``(c) Liability for Material Misstatements and Omissions.--
            ``(1) Actions authorized.--
                    ``(A) In general.--Subject to paragraph (2), a 
                person who purchases a security in a transaction 
                exempted by the provisions of section 4(6) may bring an 
                action against an issuer described in paragraph (2), 
                either at law or in equity in any court of competent 
                jurisdiction, to recover the consideration paid for 
                such security with interest thereon, less the amount of 
                any income received thereon, upon the tender of such 
                security, or for damages if such person no longer owns 
                the security.
                    ``(B) Liability.--An action brought under this 
                paragraph shall be subject to the provisions of section 
                12(b) and section 13, as if the liability were created 
                under section 12(a)(2).
            ``(2) Applicability.--An issuer shall be liable in an 
        action under paragraph (1), if the issuer--
                    ``(A) by the use of any means or instruments of 
                transportation or communication in interstate commerce 
                or of the mails, by any means of any written or oral 
                communication, in the offering or sale of a security in 
                a transaction exempted by the provisions of section 
                4(6), makes an untrue statement of a material fact or 
                omits to state a material fact required to be stated or 
                necessary in order to make the statements, in the light 
                of the circumstances under which they were made, not 
                misleading, provided that the purchaser did not know of 
                such untruth or omission; and
                    ``(B) does not sustain the burden of proof that 
                such issuer did not know, and in the exercise of 
                reasonable care could not have known, of such untruth 
                or omission.
            ``(3) Definition.--As used in this subsection, the term 
        `issuer' includes any person who is a director or partner of 
        the issuer, and the principal executive officer or officers, 
        principal financial officer, and controller or principal 
        accounting officer of the issuer (and any person occupying a 
        similar status or performing a similar function) that offers or 
        sells a security in a transaction exempted by the provisions of 
        section 4(6), and any person who offers or sells the security 
        in such offering.
    ``(d) Information Available to States.--The Commission shall make, 
or shall cause to be made by the relevant broker or funding portal, the 
information described in subsection (b) and such other information as 
the Commission, by rule, determines appropriate, available to the 
securities commission (or any agency or office performing like 
functions) of each State and territory of the United States and the 
District of Columbia.
    ``(e) Restrictions on Sales.--Securities issued pursuant to a 
transaction described in section 4(6)--
            ``(1) may not be transferred by the purchaser of such 
        securities during the 1-year period beginning on the date of 
        purchase, unless such securities are transferred--
                    ``(A) to the issuer of the securities;
                    ``(B) to an accredited investor;
                    ``(C) as part of an offering registered with the 
                Commission; or
                    ``(D) to a member of the family of the purchaser or 
                the equivalent, or in connection with the death or 
                divorce of the purchaser or other similar circumstance, 
                in the discretion of the Commission; and
            ``(2) shall be subject to such other limitations as the 
        Commission shall, by rule, establish.
    ``(f) Rule of Construction.--Nothing in this section or section 
4(6) shall be construed as preventing an issuer from raising capital 
through methods not described under section 4(6).
    ``(g) Certain Calculations.--
            ``(1) Dollar amounts.--Dollar amounts in section 4(6) and 
        subsections (a)(9) and (b)(2) of this section shall be adjusted 
        by the Commission not less frequently than once every 5 years, 
        by notice published in the Federal Register to reflect any 
        change in the Consumer Price Index for All Urban Consumers 
        published by the Bureau of Labor Statistics.
            ``(2) Income and net worth.--The income and net worth of a 
        natural person under section 4(6)(B)(ii) and subsection (a)(9) 
        of this section shall be calculated in accordance with any 
        rules of the Commission under this title regarding the 
        calculation of the income and net worth, respectively, of an 
        accredited investor.''.
    (c) Rulemaking.--Not later than 270 days after the date of 
enactment of this Act, the Securities and Exchange Commission (in this 
Act referred to as the ``Commission'') shall issue such rules as the 
Commission determines may be necessary or appropriate for the 
protection of investors to carry out sections 4(6) and section 4A of 
the Securities Act of 1933, as added by this Act. In carrying out this 
section, the Commission shall consult with any securities commission 
(or any agency or office performing like functions) of the States, any 
territory of the United States, and the District of Columbia, which 
seeks to consult with the Commission, and with any applicable national 
securities association.
    (d) Disqualification.--
            (1) In general.--Not later than 270 days after the date of 
        enactment of this Act, the Commission shall, by rule, establish 
        disqualification provisions under which--
                    (A) an issuer shall not be eligible to offer 
                securities pursuant to section 4(6) of the Securities 
                Act of 1933, as added by this Act; and
                    (B) a broker or funding portal shall not be 
                eligible to effect or participate in transactions 
                pursuant to that section 4(6).
            (2) Inclusions.--Disqualification provisions required by 
        this subsection shall--
                    (A) be substantially similar to the provisions of 
                section 230.262 of title 17, Code of Federal 
                Regulations (or any successor thereto); and
                    (B) disqualify any offering or sale of securities 
                by a person that--
                            (i) is subject to a final order of a State 
                        securities commission (or an agency or officer 
                        of a State performing like functions), a State 
                        authority that supervises or examines banks, 
                        savings associations, or credit unions, a State 
                        insurance commission (or an agency or officer 
                        of a State performing like functions), an 
                        appropriate Federal banking agency, or the 
                        National Credit Union Administration, that--
                                    (I) bars the person from--
                                            (aa) association with an 
                                        entity regulated by such 
                                        commission, authority, agency, 
                                        or officer;
                                            (bb) engaging in the 
                                        business of securities, 
                                        insurance, or banking; or
                                            (cc) engaging in savings 
                                        association or credit union 
                                        activities; or
                                    (II) constitutes a final order 
                                based on a violation of any law or 
                                regulation that prohibits fraudulent, 
                                manipulative, or deceptive conduct 
                                within the 10-year period ending on the 
                                date of the filing of the offer or 
                                sale; or
                            (ii) has been convicted of any felony or 
                        misdemeanor in connection with the purchase or 
                        sale of any security or involving the making of 
                        any false filing with the Commission.

SEC. 3. EXCLUSION OF CROWDFUNDING INVESTORS FROM SHAREHOLDER CAP.

    (a) Exemption.--Section 12(g) of the Securities Exchange Act of 
1934 (15 U.S.C. 78l(g)) is amended by adding at the end the following:
            ``(6) Exclusion for persons holding certain securities.--
        The Commission shall, by rule, exempt, conditionally or 
        unconditionally, securities acquired pursuant to an offering 
        made under section 4(6) of the Securities Act of 1933 from the 
        provisions of this subsection.''.
    (b) Rulemaking.--The Commission shall issue a rule to carry out 
section 12(g)(6) of the Securities Exchange Act of 1934 (15 U.S.C. 
78c), as added by this section, not later than 270 days after the date 
of enactment of this Act.

SEC. 4. FUNDING PORTAL REGULATION.

    (a) Exemption.--
            (1) In general.--Section 3 of the Securities Exchange Act 
        of 1934 (15 U.S.C. 78c) is amended by adding at the end the 
        following:
    ``(h) Limited Exemption for Funding Portals.--
            ``(1) In general.--The Commission shall, by rule, exempt, 
        conditionally or unconditionally, a registered funding portal 
        from the requirement to register as a broker or dealer under 
        section 15(a)(1), provided that such funding portal--
                    ``(A) remains subject to the examination, 
                enforcement, and other rulemaking authority of the 
                Commission;
                    ``(B) is a member of a national securities 
                association registered under section 15A; and
                    ``(C) is subject to such other requirements under 
                this title as the Commission determines appropriate 
                under such rule.
            ``(2) National securities association membership.--For 
        purposes of sections 15(b)(8) and 15A, the term `broker or 
        dealer' includes a funding portal and the term `registered 
        broker or dealer' includes a registered funding portal, except 
        to the extent that the Commission, by rule, determines 
        otherwise, provided that a national securities association 
        shall only examine for and enforce against a registered funding 
        portal rules of such national securities association written 
        specifically for registered funding portals.''.
            (2) Rulemaking.--The Commission shall issue a rule to carry 
        out section 3(h) of the Securities Exchange Act of 1934 (15 
        U.S.C. 78c), as added by this subsection, not later than 270 
        days after the date of enactment of this Act.
    (b) Definition.--Section 3(a) of the Securities Exchange Act of 
1934 (15 U.S.C. 78c(a)), as amended by title II of this Act, is amended 
by adding at the end the following:
            ``(80) Funding portal.--The term `funding portal' means any 
        person engaged in the business of effecting transactions in 
        securities for the account of others, solely pursuant to 
        section 4(6) of the Securities Act of 1933 (15 U.S.C. 77d(6)), 
        that does not--
                    ``(A) offer investment advice or recommendations;
                    ``(B) solicit purchases, sales, or offers to buy 
                the securities offered or displayed on its website or 
                portal;
                    ``(C) compensate employees, agents, or other 
                persons for such solicitation or based on the sale of 
                securities displayed or referenced on its website or 
                portal;
                    ``(D) hold, manage, possess, or otherwise handle 
                investor funds or securities; or
                    ``(E) engage in such other activities as the 
                Commission, by rule, determines appropriate.''.

SEC. 5. RELATIONSHIP WITH STATE LAW.

    (a) In General.--Section 18(b)(4) of the Securities Act of 1933 (15 
U.S.C. 77r(b)(4)) is amended--
            (1) by redesignating subparagraphs (C) and (D) as 
        subparagraphs (D) and (E), respectively; and
            (2) by inserting after subparagraph (B) the following:
                    ``(C) section 4(6);''.
    (b) Clarification of the Preservation of State Enforcement 
Authority.--
            (1) In general.--The amendments made by subsection (a) 
        relate solely to State registration, documentation, and 
        offering requirements, as described under section 18(a) of 
        Securities Act of 1933 (15 U.S.C. 77r(a)), and shall have no 
        impact or limitation on other State authority to take 
        enforcement action with regard to an issuer, funding portal, or 
        any other person or entity using the exemption from 
        registration provided by section 4(6) of that Act.
            (2) Clarification of state jurisdiction over unlawful 
        conduct of funding portals and issuers.--Section 18(c)(1) of 
        the Securities Act of 1933 (15 U.S.C. 77r(c)(1)) is amended by 
        striking ``with respect to fraud or deceit, or unlawful conduct 
        by a broker or dealer, in connection with securities or 
        securities transactions.'' and inserting the following: ``, in 
        connection with securities or securities transactions
                    ``(A) with respect to--
                            ``(i) fraud or deceit; or
                            ``(ii) unlawful conduct by a broker or 
                        dealer; and
                    ``(B) in connection to a transaction described 
                under section 4(6), with respect to--
                            ``(i) fraud or deceit; or
                            ``(ii) unlawful conduct by a broker, 
                        dealer, funding portal, or issuer.''.
    (c) Notice Filings Permitted.--Section 18(c)(2) of the Securities 
Act of 1933 (15 U.S.C. 77r(c)(2)) is amended by adding at the end the 
following:
                    ``(F) Fees not permitted on crowdfunded 
                securities.--Notwithstanding subparagraphs (A), (B), 
                and (C), no filing or fee may be required with respect 
                to any security that is a covered security pursuant to 
                subsection (b)(4)(B), or will be such a covered 
                security upon completion of the transaction, except for 
                the securities commission (or any agency or office 
                performing like functions) of the State of the 
                principal place of business of the issuer, or any State 
                in which purchasers of 50 percent or greater of the 
                aggregate amount of the issue are residents, provided 
                that for purposes of this subparagraph, the term 
                `State' includes the District of Columbia and the 
                territories of the United States.''.
    (d) Funding Portals.--
            (1) State exemptions and oversight.--Section 15(i) of the 
        Securities Exchange Act of 1934 (15 U.S.C. 78o(i)) is amended--
                    (A) by redesignating paragraphs (2) and (3) as 
                paragraphs (3) and (4), respectively; and
                    (B) by inserting after paragraph (1) the following:
            ``(2) Funding portals.--
                    ``(A) Limitation on state laws.--Except as provided 
                in subparagraph (B), no State or political subdivision 
                thereof may enforce any law, rule, regulation, or other 
                administrative action against a registered funding 
                portal with respect to its business as such.
                    ``(B) Examination and enforcement authority.--
                Subparagraph (A) does not apply with respect to the 
                examination and enforcement of any law, rule, 
                regulation, or administrative action of a State or 
                political subdivision thereof in which the principal 
                place of business of a registered funding portal is 
                located, provided that such law, rule, regulation, or 
                administrative action is not in addition to or 
                different from the requirements for registered funding 
                portals established by the Commission.
                    ``(C) Definition.--For purposes of this paragraph, 
                the term `State' includes the District of Columbia and 
                the territories of the United States.''.
            (2) State fraud authority.--Section 18(c)(1) of the 
        Securities Act of 1933 (15 U.S.C. 77r(c)(1)) is amended by 
        striking ``or dealer'' and inserting ``, dealer, or funding 
        portal''.

SEC. 6. REPORTS TO CONGRESS.

    (a) In General.--The Commission, after consultation with the 
securities commission (or any agency or office performing like 
functions) of the States and State attorneys general, shall submit a 
report to the Committee on Banking, Housing, and Urban Affairs of the 
Senate and the Committee on Financial Services of the House of 
Representatives, not later than 1 year after the date on which the 
Commission issues final rules under section 2(c), and every 2 years 
thereafter through the date that is 7 years after that date of 
issuance.
    (b) Reports.--Each report provided pursuant to subsection (a) shall 
include--
            (1) a description of the material risks posed to investors 
        in securities issued pursuant to section 4(6) of the Securities 
        Act of 1933, as added by this Act, including risks related to 
        valuations, subsequent corporate actions by the issuer, 
        dilution of ownership interests or rights, and any other risks 
        to investors that the Commission shall determine;
            (2) a description of the performance of investments made in 
        securities issued pursuant to that section 4(6), to the extent 
        that such information is available to the Commission;
            (3) a description of fraud or misconduct allegations 
        related to issuances made pursuant to that section 4(6), 
        including a description of actions by and complaints to the 
        Commission involving material misstatements, material 
        omissions, or other material problems associated with offerings 
        in reliance on such exemption, provided that the description 
        shall be limited to concluded enforcement actions or 
        information that is otherwise publicly available;
            (4) the approximate number of offerings made pursuant to 
        that section 4(6);
            (5) a summary of information relating to purchasers of 
        securities offered pursuant to that section 4(6), including 
        investor income and net worth levels, the number of investments 
        in such offerings made by such investors, and the average sizes 
        of such investments, to the extent that such information is 
        available to the Commission;
            (6) a summary of information relating to issuers of 
        securities relying on that section 4(6), including their asset 
        sizes, revenues, numbers of investors, and the amounts raised, 
        to the extent that such information is available to the 
        Commission;
            (7) a description of any emerging trends in offerings or 
        issuances made pursuant to that section 4(6);
            (8) recommendations regarding enhancements, including 
        additional issuer, broker, dealer, or funding portal 
        requirements, regulatory oversight, or disclosures, that may 
        improve protections for investors purchasing securities issued 
        pursuant to that section 4(6); and
            (9) any other information that the Commission deems 
        necessary or appropriate.
    (c) State Reports.--
            (1) In general.--If the securities commission (or any 
        agency or office performing like functions) of a State or State 
        attorney general issues a report in writing to the Commission 
        identifying any emerging trends that have undermined investor 
        protections, or other risks pertaining to investor protection, 
        in offerings or issuances relying upon section 4(6) of the 
        Securities Act of 1933, as added by this Act, other than in 
        connection with a review conducted by the Commission pursuant 
        to this section, the Commission shall--
                    (A) conduct a preliminary review of such report; 
                and
                    (B) respond in writing to such report, not later 
                than 120 days after the date of receipt of such report, 
                with the results of its preliminary review.
            (2) Copies of report.--The Commission shall provide a copy 
        of any report of the securities commission (or any agency or 
        office performing like functions) of a State or State attorney 
        general described in paragraph (1) and the response of the 
        Commission to the Committee on Banking, Housing, and Urban 
        Affairs of the Senate and the Committee on Financial Services 
        of the House of Representatives, not later than 90 days after 
        the date on which such response is provided.
    (d) Definition of State.--For purposes of this section, the term 
``State'' includes any territory of the United States and the District 
of Columbia.
                                 <all>