[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2799 Reported in House (RH)]

<DOC>





                                                 Union Calendar No. 112
118th CONGRESS
  1st Session
                                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

                             April 24, 2023

 Mr. McHenry introduced the following bill; which was referred to the 
 Committee on Financial Services, and in addition to the Committee on 
Education and the Workforce, for a period to be subsequently determined 
 by the Speaker, in each case for consideration of such provisions as 
        fall within the jurisdiction of the committee concerned

                             July 17, 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]

                             July 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
 [For text of introduced bill, see copy of bill as introduced on April 
                               24, 2023]


_______________________________________________________________________

                                 A BILL


 
 To make reforms to the capital markets of the United States, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Expanding Access 
to Capital Act of 2023''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

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 disposition 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.

         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.

          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 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 DISPOSITION FINANCIAL STATEMENTS.

    The Securities and Exchange Commission shall revise section 210.1-
02(w)(1)(i)(A) of title 17, Code of Federal Regulations, to permit a 
registrant, in determining the significance of an acquisition or 
disposition described in such section 210.1-02(w)(1)(i)(A), to 
calculate the registrant's aggregate worldwide market value based on 
the applicable trading value, conversion value, or exchange value of 
all of the registrant's outstanding classes of stock (including 
preferred stock and non-traded common shares that are convertible into 
or exchangeable for traded common shares) and not just the voting and 
non-voting common equity of the registrant.

              TITLE II--HELPING STARTUPS CONTINUE TO GROW

SEC. 1201. SHORT TITLE.

    This title may be cited as the ``Helping Startups Continue To Grow 
Act''.

SEC. 1202. EMERGING GROWTH COMPANY CRITERIA.

    (a) Securities Act of 1933.--Section 2(a)(19) of the Securities Act 
of 1933 (15 U.S.C. 77b(a)(19)) is amended--
            (1) by striking ``$1,000,000,000'' each place such term 
        appears and inserting ``$1,500,000,000'';
            (2) in subparagraph (B)--
                    (A) by striking ``fifth'' and inserting ``7-year''; 
                and
                    (B) by adding ``or'' at the end;
            (3) in subparagraph (C), by striking ``; or'' and inserting 
        a period; and
            (4) by striking subparagraph (D).
    (b) Securities Exchange Act of 1934.--Section 3(a) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78c(a)) is amended, in the 
first paragraph (80) (related to emerging growth companies)--
            (1) by striking ``$1,000,000,000'' each place such term 
        appears and inserting ``$1,500,000,000'';
            (2) in subparagraph (B)--
                    (A) by striking ``fifth'' and inserting ``7-year''; 
                and
                    (B) by adding ``or'' at the end;
            (3) in subparagraph (C), by striking ``; or'' and inserting 
        a period; and
            (4) by striking subparagraph (D).

    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.

    (a) Auditor Independence Standards of the Public Company Accounting 
Oversight Board.--Section 103 of the Sarbanes-Oxley Act of 2002 (15 
U.S.C. 7213) is amended by adding at the end the following:
    ``(e) Auditor Independence for Certain Past Audits Occurring Before 
an Issuer Is a Public Company.--With respect to an issuer that is a 
public company or an issuer that has filed a registration statement to 
become a public company, the auditor independence rules established by 
the Board with respect to audits occurring before the last fiscal year 
of the issuer completed before the issuer filed a registration 
statement to become a public company shall treat an auditor as 
independent if--
            ``(1) the auditor is independent under standards 
        established by the American Institute of Certified Public 
        Accountants applicable to certified public accountants in 
        United States; or
            ``(2) with respect to a foreign issuer, the auditor is 
        independent under comparable standards applicable to certified 
        public accountants in the issuer's home country.''.
    (b) Auditor Independence Standards of the Securities and Exchange 
Commission.--Section 10A of the Securities Exchange Act of 1934 (15 
U.S.C. 78j-1) is amended by adding at the end the following:
    ``(n) Auditor Independence for Certain Past Audits Occurring Before 
an Issuer Is a Public Company.--With respect to an issuer that is a 
public company or an issuer that has filed a registration statement to 
become a public company, the auditor independence rules established by 
the Commission under the securities laws with respect to audits 
occurring before the last fiscal year of the issuer completed before 
the issuer filed a registration statement to become a public company 
shall treat an auditor as independent if--
            ``(1) the auditor is independent under standards 
        established by the American Institute of Certified Public 
        Accountants applicable to certified public accountants in 
        United States; or
            ``(2) with respect to a foreign issuer, the auditor is 
        independent under comparable standards applicable to certified 
        public accountants in the issuer's home country.''.

   TITLE IV--EXPAND THE PROTECTION FOR RESEARCH REPORTS TO COVER ALL 
                       SECURITIES OF ALL ISSUERS

SEC. 1401. PROVISION OF RESEARCH.

    Section 2(a)(3) of the Securities Act of 1933 (15 U.S.C. 77b(a)(3)) 
is amended--
     (a) by striking ``an emerging growth company'' and inserting ``an 
issuer'';
    (b) by striking ``the common equity'' and inserting ``any''; and
    (c) by striking ``such emerging growth company'' and inserting 
``such issuer''.

    TITLE V--EXCLUDE QIBS AND IAAS FROM THE RECORD HOLDER COUNT FOR 
                         MANDATORY REGISTRATION

SEC. 1501. EXCLUSIONS FROM MANDATORY REGISTRATION THRESHOLD.

    (a) In General.--Section 12(g)(1) of the Securities Exchange Act of 
1934 (15 U.S.C. 78l(g)(1)) is amended--
            (1) in subparagraph (A)(i), by inserting after ``persons'' 
        the following: ``(that are not a qualified institutional buyer 
        or an institutional accredited investor)''; and
            (2) in subparagraph (B), by inserting after ``persons'' the 
        following: ``(that are not a qualified institutional buyer or 
        an institutional accredited investor)''.
    (b) Nonapplicability of General Exemptive Authority.--Section 36 of 
the Securities Exchange Act of 1934 (15 U.S.C. 78mm) shall not apply to 
the matter inserted by the amendments made by subsection (a).

                   TITLE VI--EXPAND WKSI ELIGIBILITY

SEC. 1601. DEFINITION OF WELL-KNOWN SEASONED ISSUER.

    For purposes of the Federal securities laws, and regulations issued 
thereunder, an issuer shall be a ``well-known seasoned issuer'' if--
            (1) the aggregate market value of the voting and non-voting 
        common equity held by non-affiliates of the issuer is 
        $250,000,000 or more (as determined under Form S-3 general 
        instruction I.B.1. as in effect on the date of enactment of 
        this Act); and
            (2) the issuer otherwise satisfies the requirements of the 
        definition of ``well-known seasoned issuer'' contained in 
        section 230.405 of title 17, Code of Federal Regulations 
        without reference to any requirement in such definition 
        relating to minimum worldwide market value of outstanding 
        voting and non-voting common equity held by non-affiliates.

  TITLE VII--SMALLER REPORTING COMPANY, ACCELERATED FILER, AND LARGE 
                      ACCELERATED FILER THRESHOLDS

SEC. 1701. SMALLER REPORTING COMPANY, ACCELERATED FILER, AND LARGE 
              ACCELERATED FILER THRESHOLDS.

    (a) Smaller Reporting Companies.--
            (1) In general.--The Securities and Exchange Commission 
        shall revise the definition of a ``smaller reporting company'' 
        under section 229.10(f)(1) of title 17, Code of Federal 
        Regulations--
                    (A) in paragraph (i), by adjusting the public float 
                threshold from $250,000,000 to $500,000,000; and
                    (B) in paragraph (ii)--
                            (i) by adjusting the annual revenue 
                        threshold from $100,000,000 to $250,000,000; 
                        and
                            (ii) in paragraph (B), by adjusting the 
                        public float threshold from $700,000,000 to 
                        $900,000,000.
            (2) Use of three-year rolling average annual revenues.--The 
        Securities and Exchange Commission shall revise paragraphs 
        (1)(ii) and (2)(iii)(B) under the definition of ``smaller 
        reporting company'' under section 229.10(f)(1) of title 17, 
        Code of Federal Regulations, by substituting ``three-year 
        rolling average annual revenues'' for ``annual revenues''.
            (3) Conforming changes.--The Securities and Exchange 
        Commission shall revise the definition of a ``smaller reporting 
        company'' under sections 230.405 and 240.12b-2 of title 17, 
        Code of Federal Regulations, and any other rule of the 
        Commission in the same manner as such definition is revised 
        under paragraphs (1) and (2).
    (b) Accelerated Filers and Large Accelerated Filers.--
            (1) Large accelerated filer.--The Securities and Exchange 
        Commission shall revise the definition of a ``large accelerated 
        filer'' under section 240.12b-2(2) of title 17, Code of Federal 
        Regulations, to increase the threshold amount (for the 
        aggregate worldwide market value of the voting and non-voting 
        common equity held by non-affiliates of an issuer) from 
        $700,000,000 to $750,000,000.
            (2) Threshold to exit accelerated filer status.--The 
        Securities and Exchange Commission shall revise section 
        240.12b-2(3)(ii) of title 17, Code of Federal Regulations, to 
        increase the threshold amount (for the aggregate worldwide 
        market value of the voting and non-voting common equity held by 
        non-affiliates of an issuer) at which an issuer is no longer an 
        accelerated filer from $60,000,000 to $75,000,000.
            (3) Threshold to exit large accelerated filer status.--The 
        Securities and Exchange Commission shall revise section 
        240.12b-2(3)(iii) of title 17, Code of Federal Regulations, to 
        increase the threshold amount (for the aggregate worldwide 
        market value of the voting and non-voting common equity held by 
        non-affiliates of an issuer) at which an issuer is no longer a 
        large accelerated filer from $560,000,000 to $750,000,000.
            (4) Exclusion of smaller reporting companies.--The 
        Securities and Exchange Commission shall revise the definitions 
        of an ``accelerated filer'' and a ``large accelerated filer'' 
        under paragraphs (1) and (2) of section 240.12b-2 of title 17, 
        Code of Federal Regulations, respectively, to exclude any 
        issuer that is a smaller reporting company, as defined under 
        section 229.10(f)(1) of title 17, Code of Federal Regulations.

         DIVISION B--HELPING SMALL BUSINESSES AND ENTREPRENEURS

            TITLE I--UNLOCKING CAPITAL FOR SMALL BUSINESSES

SEC. 2101. SHORT TITLE.

    This title may be cited as the ``Unlocking Capital for Small 
Businesses Act of 2023''.

SEC. 2102. SAFE HARBORS FOR PRIVATE PLACEMENT BROKERS AND FINDERS.

    (a) In General.--Section 15 of the Securities Exchange Act of 1934 
(15 U.S.C. 78o) is amended by adding at the end the following:
    ``(p) Private Placement Broker Safe Harbor.--
            ``(1) Registration requirements.--Not later than 180 days 
        after the date of the enactment of this subsection the 
        Commission shall promulgate regulations with respect to private 
        placement brokers that are no more stringent than those imposed 
        on funding portals.
            ``(2) National securities associations.--Not later than 180 
        days after the date of the enactment of this subsection the 
        Commission shall promulgate regulations that require the rules 
        of any national securities association to allow a private 
        placement broker to become a member of such national securities 
        association subject to reduced membership requirements 
        consistent with this subsection.
            ``(3) Disclosures required.--Before effecting a 
        transaction, a private placement broker shall disclose clearly 
        and conspicuously, in writing, to all parties to the 
        transaction as a result of the broker's activities--
                    ``(A) that the broker is acting as a private 
                placement broker;
                    ``(B) the amount of any payment or anticipated 
                payment for services rendered as a private placement 
                broker in connection with such transaction;
                    ``(C) the person to whom any such payment is made; 
                and
                    ``(D) any beneficial interest in the issuer, direct 
                or indirect, of the private placement broker, of a 
                member of the immediate family of the private placement 
                broker, of an associated person of the private 
                placement broker, or of a member of the immediate 
                family of such associated person.
            ``(4) Private placement broker defined.--In this 
        subsection, the term `private placement broker' means a person 
        that--
                    ``(A) receives transaction-based compensation--
                            ``(i) for effecting a transaction by--
                                    ``(I) introducing an issuer of 
                                securities and a buyer of such 
                                securities in connection with the sale 
                                of a business effected as the sale of 
                                securities; or
                                    ``(II) introducing an issuer of 
                                securities and a buyer of such 
                                securities in connection with the 
                                placement of securities in transactions 
                                that are exempt from registration 
                                requirements under the Securities Act 
                                of 1933; and
                            ``(ii) that is not with respect to--
                                    ``(I) a class of publicly traded 
                                securities;
                                    ``(II) the securities of an 
                                investment company (as defined in 
                                section 3 of the Investment Company Act 
                                of 1940); or
                                    ``(III) a variable or equity-
                                indexed annuity or other variable or 
                                equity-indexed life insurance product;
                    ``(B) with respect to a transaction for which such 
                transaction-based compensation is received--
                            ``(i) does not handle or take possession of 
                        the funds or securities; and
                            ``(ii) does not engage in an activity that 
                        requires registration as an investment adviser 
                        under State or Federal law; and
                    ``(C) is not a finder as defined under subsection 
                (q).
    ``(q) Finder Safe Harbor.--
            ``(1) Nonregistration.--A finder is exempt from the 
        registration requirements of this Act.
            ``(2) National securities associations.--A finder shall not 
        be required to become a member of any national securities 
        association.
            ``(3) Finder defined.--In this subsection, the term 
        `finder' means a person described in paragraphs (A) and (B) of 
        subsection (p)(4) that--
                    ``(A) receives transaction-based compensation of 
                equal to or less than $500,000 in any calendar year;
                    ``(B) receives transaction-based compensation in 
                connection with transactions that result in a single 
                issuer selling securities valued at equal to or less 
                than $15,000,000 in any calendar year;
                    ``(C) receives transaction-based compensation in 
                connection with transactions that result in any 
                combination of issuers selling securities valued at 
                equal to or less than $30,000,000 in any calendar year; 
                or
                    ``(D) receives transaction-based compensation in 
                connection with fewer than 16 transactions that are not 
                part of the same offering or are otherwise unrelated in 
                any calendar year.''.
    (b) Validity of Contracts With Registered Private Placement Brokers 
and Finders.--Section 29 of the Securities Exchange Act of 1934 (15 
U.S.C. 78cc) is amended by adding at the end the following:
    ``(d) Subsection (b) shall not apply to a contract made for a 
transaction if--
            ``(1) the transaction is one in which the issuer engaged 
        the services of a broker or dealer that is not registered under 
        this Act with respect to such transaction;
            ``(2) such issuer received a self-certification from such 
        broker or dealer certifying that such broker or dealer is a 
        registered private placement broker under section 15(p) or a 
        finder under section 15(q); and
            ``(3) the issuer either did not know that such self-
        certification was false or did not have a reasonable basis to 
        believe that such self-certification was false.''.
    (c) Removal of Private Placement Brokers From Definitions of 
Broker.--
            (1) Records and reports on monetary instruments 
        transactions.--Section 5312 of title 31, United States Code, is 
        amended in subsection (a)(2)(G) by inserting ``with the 
        exception of a private placement broker as defined in section 
        15(p)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78o(p)(4))'' before the semicolon at the end.
            (2) Securities exchange act of 1934.--Section 3(a)(4) of 
        the Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)) is 
        amended by adding at the end the following:
                    ``(G) Private placement brokers.--A private 
                placement broker as defined in section 15(p)(4) is not 
                a broker for the purposes of this Act.''.

SEC. 2103. LIMITATIONS ON STATE LAW.

    Section 15(i) of the Securities Exchange Act of 1934 (15 U.S.C. 
78o(i)) is amended--
            (1) by redesignating paragraphs (3) and (4) as paragraphs 
        (4) and (5), respectively;
            (2) by inserting after paragraph (2) the following:
            ``(3) Private placement brokers and finders.--
                    ``(A) In general.--No State or political 
                subdivision thereof may enforce any law, rule, 
                regulation, or other administrative action that imposes 
                greater registration, audit, financial recordkeeping, 
                or reporting requirements on a private placement broker 
                or finder than those that are required under 
                subsections (p) and (q), respectively.
                    ``(B) Definition of state.--For purposes of this 
                paragraph, the term `State' includes the District of 
                Columbia and each territory of the United States.''; 
                and
            (3) in paragraph (4), as so redesignated, by striking 
        ``paragraph (3)'' and inserting ``paragraph (5)''.

            TITLE II--SMALL BUSINESS INVESTOR CAPITAL ACCESS

SEC. 2201. SHORT TITLE.

    This title may be cited as the ``Small Business Investor Capital 
Access Act''.

SEC. 2202. INFLATION ADJUSTMENT FOR THE EXEMPTION THRESHOLD FOR CERTAIN 
              INVESTMENT ADVISERS OF PRIVATE FUNDS.

    Section 203(m) of the Investment Advisers Act of 1940 (15 U.S.C. 
80b-3(m)) is amended by adding at the end the following:
            ``(5) Inflation adjustment.--The Commission shall adjust 
        the dollar amount described under paragraph (1)--
                    ``(A) upon enactment of this paragraph, to reflect 
                the change in the Consumer Price Index for All Urban 
                Consumers published by the Bureau of Labor Statistics 
                of the Department of Labor between the date of 
                enactment of the Private Fund Investment Advisers 
                Registration Act of 2010 and the date of enactment of 
                this paragraph; and
                    ``(B) annually thereafter, to reflect the change in 
                the Consumer Price Index for All Urban Consumers 
                published by the Bureau of Labor Statistics of the 
                Department of Labor.''.

         TITLE III--IMPROVING CAPITAL ALLOCATION FOR NEWCOMERS

SEC. 2301. SHORT TITLE.

    This title may be cited as the ``Improving Capital Allocation for 
Newcomers Act of 2023''.

SEC. 2302. QUALIFYING VENTURE CAPITAL FUNDS.

    Section 3(c)(1) of the Investment Company Act of 1940 (15 U.S.C. 
80a-3(c)(1)) is amended--
            (1) in the matter preceding subparagraph (A), by striking 
        ``250 persons'' and inserting ``600 persons''; and
            (2) in subparagraph (C)(i), by striking ``$10,000,000'' and 
        inserting ``$150,000,000''.

       TITLE IV--SMALL ENTREPRENEURS' EMPOWERMENT AND DEVELOPMENT

SEC. 2401. SHORT TITLE.

    This title may be cited as the ``Small Entrepreneurs' Empowerment 
and Development Act of 2023'' or the ``SEED Act of 2023''.

SEC. 2402. MICRO-OFFERING EXEMPTION.

    (a) In General.--Section 4 of the Securities Act of 1933 (15 U.S.C. 
77d) is amended--
            (1) in subsection (a), by adding at the end the following:
            ``(8) transactions meeting the requirements of subsection 
        (f).''; and
            (2) by adding at the end the following:
    ``(f) Micro-Offerings.--The transactions referred to in subsection 
(a)(8) are transactions involving the sale of securities by an issuer 
(including all entities controlled by or under common control with the 
issuer) where the aggregate amount of all securities sold by the 
issuer, including any amount sold in reliance on the exemption provided 
under subsection (a)(8), during the 12-month period preceding such 
transaction, does not exceed $250,000.''.
    (b) Disqualification.--
            (1) In general.--Not later than 270 days after the date of 
        enactment of this Act, the Securities and Exchange Commission 
        shall, by rule, establish disqualification provisions under 
        which an issuer shall not be eligible to offer securities 
        pursuant to section 4(a)(8) of the Securities Act of 1933, as 
        added by this section.
            (2) Inclusions.--Disqualification provisions required by 
        this subsection shall--
                    (A) be substantially similar to the provisions of 
                section 230.506(d) 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 
                        covered regulator that--
                                    (I) bars the person from--
                                            (aa) association with an 
                                        entity regulated by the covered 
                                        regulator;
                                            (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, if 
                                such final order was issued within the 
                                previous 10-year period; 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.
            (3) Covered regulator defined.--In this subsection, the 
        term ``covered regulator'' means--
                    (A) a State securities commission (or an agency or 
                officer of a State performing like functions);
                    (B) a State authority that supervises or examines 
                banks, savings associations, or credit unions;
                    (C) a State insurance commission (or an agency or 
                officer of a State performing like functions);
                    (D) a Federal banking agency (as defined under 
                section 3 of the Federal Deposit Insurance Act); and
                    (E) the National Credit Union Administration.
    (c) Exemption Under State Regulations.--Section 18(b)(4) of the 
Securities Act of 1933 (15 U.S.C. 77r(b)(4)) is amended--
            (1) in subparagraph (F), by striking ``or'' at the end;
            (2) in subparagraph (G), by striking the period and 
        inserting ``; or''; and
            (3) by adding at the end the following:
                    ``(H) section 4(a)(8).''.

                   TITLE V--REGULATION A+ IMPROVEMENT

SEC. 2501. SHORT TITLE.

    This title may be cited as the ``Regulation A+ Improvement Act of 
2023''.

SEC. 2502. JOBS ACT-RELATED EXEMPTION.

    Section 3(b) of the Securities Act of 1933 (15 U.S.C. 77c(b)) is 
amended--
            (1) in paragraph (2)(A), by striking ``$50,000,000'' and 
        inserting ``$150,000,000, adjusted for inflation by the 
        Commission every 2 years to the nearest $10,000 to reflect the 
        change in the Consumer Price Index for All Urban Consumers 
        published by the Bureau of Labor Statistics''; and
            (2) in paragraph (5)--
                    (A) by striking ``such amount as'' and inserting: 
                ``such amount, in addition to the adjustment for 
                inflation provided for under such paragraph (2)(A), 
                as''; and
                    (B) by striking ``such amount, it'' and inserting 
                ``such amount, in addition to the adjustment for 
                inflation provided for under such paragraph (2)(A), 
                it''.

        TITLE VI--DEVELOPING AND EMPOWERING OUR ASPIRING LEADERS

SEC. 2601. SHORT TITLE.

    This title may be cited as the ``Developing and Empowering our 
Aspiring Leaders Act of 2023'' or the ``DEAL Act of 2023''.

SEC. 2602. DEFINITIONS.

    Not later than the end of the 180-day period beginning on the date 
of the enactment of this Act, the Securities and Exchange Commission 
shall, to the extent such revisions facilitate capital formation 
without compromising investor protection--
            (1) revise the definition of a qualifying investment under 
        paragraph (c) of section 275.203(l)-1 of title 17, Code of 
        Federal Regulations--
                    (A) to include an equity security issued by a 
                qualifying portfolio company, whether acquired directly 
                from the company or in a secondary acquisition; and
                    (B) to specify that an investment in another 
                venture capital fund is a qualifying investment under 
                such definition; and
            (2) revise paragraph (a) of such section to require, as a 
        condition of a private fund qualifying as a venture capital 
        fund under such paragraph, that the qualifying investments of 
        the private fund are either--
                    (A) predominantly qualifying investments that were 
                acquired directly from a qualifying portfolio company; 
                or
                    (B) predominantly qualifying investments in another 
                venture capital fund or other venture capital funds.

SEC. 2603. REPORTS.

    (a) GAO Report.--The Comptroller General of the United States shall 
issue a report to Congress on the risks and impacts of concentrated 
sectoral counterparty risk in the banking sector, in light of the 
failure of Silicon Valley Bank.
    (b) Advocate for Small Business Capital Formation Report.--The 
Advocate for Small Business Capital Formation shall issue a report to 
Congress and the Securities and Exchange Commission--
            (1) examining the access to banking services for venture 
        funds and companies funded by venture capital, in light of the 
        failure of Silicon Valley Bank, especially those funds and 
        companies located outside of the established technology and 
        venture capital hubs of California, Massachusetts, and New 
        York; and
            (2) containing any policy recommendations of the Advocate.

            TITLE VII--IMPROVING CROWDFUNDING OPPORTUNITIES

SEC. 2701. SHORT TITLE.

    This title may be cited as the ``Improving Crowdfunding 
Opportunities Act''.

SEC. 2702. CROWDFUNDING REVISIONS.

    (a) Exemption From State Regulation.--Section 18(b)(4)(A) of the 
Securities Act of 1933 (15 U.S.C. 77r(b)(4)(A)) is amended by striking 
``pursuant to section'' and all that follows through the semicolon at 
the end and inserting the following: ``pursuant to--
                            ``(i) section 13 or 15(d) of the Securities 
                        Exchange Act of 1934 (15 U.S.C. 78m, 78o(d)); 
                        or
                            ``(ii) section 4A(b) or any regulation 
                        issued under that section;''.
    (b) Liability for Material Misstatements and Omissions.--Section 
4A(c) of the Securities Act of 1933 (15 U.S.C. 77d-1(c)) is amended--
            (1) by redesignating paragraph (3) as paragraph (4); and
            (2) by inserting after paragraph (2) the following:
            ``(3) Liability of funding portals.--For the purposes of 
        this subsection, a funding portal, as that term is defined in 
        section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78c(a)), shall not be considered to be an issuer unless, in 
        connection with the offer or sale of a security, the funding 
        portal knowingly--
                    ``(A) makes any untrue statement of a material fact 
                or omits to state a material fact in order to make the 
                statements made, in light of the circumstances under 
                which they are made, not misleading; or
                    ``(B) engages in any act, practice, or course of 
                business which operates or would operate as a fraud or 
                deceit upon any person.''.
    (c) Applicability of Bank Secrecy Act Requirements.--
            (1) Securities act of 1933.--Section 4A(a) of the 
        Securities Act of 1933 (15 U.S.C. 77d-1(a)) is amended--
                    (A) in paragraph (11), by striking ``and'' at the 
                end;
                    (B) in paragraph (12), by striking the period at 
                the end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(13) not be subject to the recordkeeping and reporting 
        requirements relating to monetary instruments under subchapter 
        II of chapter 53 of title 31, United States Code.''.
            (2) Title 31, united states code.--Section 5312 of title 
        31, United States Code, is amended by striking subsection (c) 
        and inserting the following:
    ``(c) Additional Clarification.--The term `financial institution' 
(as defined in subsection (a))--
            ``(1) includes any futures commission merchant, commodity 
        trading advisor, or commodity pool operator registered, or 
        required to register, under the Commodity Exchange Act (7 
        U.S.C. 1 et seq.); and
            ``(2) does not include a funding portal, as that term is 
        defined in section 3(a) of the Securities Exchange Act of 1934 
        (15 U.S.C. 78c(a)).''.
    (d) Provision of Impersonal Investment Advice and 
Recommendations.--Section 3(a) of the Securities Exchange Act of 1934 
(15 U.S.C. 78c(a)) is amended--
            (1) by redesignating the second paragraph (80) (relating to 
        funding portals) as paragraph (81); and
            (2) in paragraph (81)(A), as so redesignated, by inserting 
        after ``recommendations'' the following: ``(other than by 
        providing impersonal investment advice by means of written 
        material, or an oral statement, that does not purport to meet 
        the objectives or needs of a specific individual or account)''.
    (e) Target Amounts of Certain Exempted Offerings.--The Securities 
and Exchange Commission shall amend paragraph (t)(1) of section 227.201 
of title 17, Code of Federal Regulations so that such paragraph applies 
with respect to an issuer offering or selling securities in reliance on 
section 4(a)(6) of the Securities Act of 1933 (15 U.S.C. 77d(a)(6)) 
if--
            (1) the offerings of such issuer, together with all other 
        amounts sold under such section 4(a)(6) within the preceding 
        12-month period, have, in the aggregate, a target amount of 
        more than $124,000 but not more than $250,000;
            (2) the financial statements of such issuer that have 
        either been reviewed or audited by a public accountant that is 
        independent of the issuer are unavailable at the time of 
        filing; and
            (3) such issuer provides a statement that financial 
        information certified by the principal executive officer of the 
        issuer has been provided instead of financial statements 
        reviewed by a public accountant that is independent of the 
        issuer.
    (f) Exemption Available to Investment Companies.--Section 4A(f) of 
the Securities Act of 1933 (15 U.S.C. 77d-1(f)) is amended--
            (1) in paragraph (2), by inserting ``or'' after the 
        semicolon;
            (2) by striking paragraph (3); and
            (3) by redesignating paragraph (4) as paragraph (3).
    (g) Non-accredited Investor Requirements.--Section 4(a)(6) of the 
Securities Act of 1933 (15 U.S.C. 77d(a)(6))) is amended--
            (1) in subparagraph (A), by striking ``$1,000,000'' and 
        inserting ``$10,000,000''; and
            (2) in subparagraph (B), by striking ``does not exceed'' 
        and all that follows through ``more than $100,000'' and 
        inserting ``does not exceed 10 percent of the annual income or 
        net worth of such investor''.
    (h) Technical Correction.--The Securities Act of 1933 (15 U.S.C. 
77a et seq.) is amended--
            (1) by striking the term ``section 4(6)'' each place such 
        term appears and inserting ``section 4(a)(6)'';
            (2) by striking the term ``section 4(6)(B)'' each place 
        such term appears and inserting ``section 4(a)(6)(B)''; and
            (3) in section 4A(f), by striking ``Section 4(6)'' and 
        inserting ``Section 4(a)(6)''.

           TITLE VIII--RESTORING THE SECONDARY TRADING MARKET

SEC. 2801. SHORT TITLE.

    This title may be cited as the ``Restoring the Secondary Trading 
Market Act''.

SEC. 2802. EXEMPTION FROM STATE REGULATION.

    Section 18(a) of the Securities Act of 1933 (15 U.S.C. 77r(a)) is 
amended--
            (1) in paragraph (2), by striking ``or'' at the end;
            (2) in paragraph (3), by striking the period at the end and 
        inserting ``; or''; and
            (3) by adding at the end the following:
            ``(4) shall directly or indirectly prohibit, limit, or 
        impose any conditions upon the off-exchange secondary trading 
        (as such term is defined by the Commission) in securities of an 
        issuer that makes current information publicly available, 
        including--
                    ``(A) the information required in the periodic and 
                current reports described under paragraph (b) of 
                section 230.257 of title 17, Code of Federal 
                Regulations; or
                    ``(B) the documents and information required with 
                respect to Tier 2 offerings, as defined in section 
                230.251(a) of title 17, Code of Federal Regulations.''.

            DIVISION C--INCREASING ACCESS TO PRIVATE MARKETS

                TITLE I--GIG WORKER EQUITY COMPENSATION

SEC. 3101. SHORT TITLE.

    This title may be cited as the ``Gig Worker Equity Compensation 
Act''.

SEC. 3102. EXTENSION OF RULE 701.

    (a) In General.--The exemption provided under section 230.701 of 
title 17, Code of Federal Regulations, shall apply to individuals 
(other than employees) providing goods for sale, labor, or services for 
remuneration to either an issuer or to customers of an issuer to the 
same extent as such exemptions apply to employees of the issuer. For 
purposes of the previous sentence, the term ``customers'' may, at the 
election of an issuer, include users of the issuer's platform.
    (b) Adjustment for Inflation.--The Securities and Exchange 
Commission shall annually adjust the dollar figure under section 
230.701(e) of title 17, Code of Federal Regulations, to reflect the 
percentage change in the Consumer Price Index for All Urban Consumers 
published by the Bureau of Labor Statistics of the Department of Labor.
    (c) Rulemaking.--The Securities and Exchange Commission--
            (1) shall revise section 230.701 of title 17, Code of 
        Federal Regulations, to reflect the requirements of this 
        section; and
            (2) may not revise such section 230.701 in any manner that 
        would have the effect of restricting access to equity 
        compensation for employees or individuals described under 
        subsection (a).

SEC. 3103. PREEMPTION OF CERTAIN PROVISIONS OF STATE LAW.

    Any provision of a State law with respect to wage rates or benefits 
that creates a presumption that an individual providing goods for sale, 
labor, or services for remuneration for a person is an employee of such 
person under such law is preempted.

SEC. 3104. GAO STUDY.

    Not later than the end of the 3-year period beginning on the date 
of enactment of this Act, the Comptroller General of the United States 
shall carry out a study on the effects of this title and submit a 
report on such study to the Congress.

               TITLE II--INVESTMENT OPPORTUNITY EXPANSION

SEC. 3201. SHORT TITLE.

    This title may be cited as the ``Investment Opportunity Expansion 
Act''.

SEC. 3202. INVESTMENT THRESHOLDS TO QUALIFY AS AN ACCREDITED INVESTOR.

    Section 2(a)(15) of the Securities Act of 1933 (15 U.S.C. 
77b(a)(15)) is amended--
            (1) by striking ``(15) The term `accredited investor' shall 
        mean--'' and inserting the following:
            ``(15) Accredited investor.--
                    ``(A) In general.--The term `accredited investor' 
                means--'';
            (2) in clause (i), by striking ``or'' at the end;
            (3) in clause (ii), by striking the period at the end and 
        inserting a semicolon; and
            (4) by adding at the end the following:
                            ``(iii) with respect to a proposed 
                        transaction, any individual whose aggregate 
                        investment, at the completion of such 
                        transaction, in securities with respect to 
                        which there has not been a public offering is 
                        not more than 10 percent of the greater of--
                                    ``(I) the net assets of the 
                                individual; or
                                    ``(II) the annual income of the 
                                individual;''.

          TITLE III--RISK DISCLOSURE AND INVESTOR ATTESTATION

SEC. 3301. SHORT TITLE.

    This title may be cited as the ``Risk Disclosure and Investor 
Attestation Act''.

SEC. 3302. INVESTOR ATTESTATION.

    (a) In General.--Section 2(a)(15) of the Securities Act of 1933 (15 
U.S.C. 77b(a)(15)), as amended by section 3202, is further amended by 
adding at the end the following:
                            ``(iv) with respect to an issuer, any 
                        individual that has attested to the issuer that 
                        the individual understands the risks of 
                        investment in private issuers, using such form 
                        as the Commission shall establish, by rule, but 
                        which form may not be longer than 2 pages in 
                        length; or''.
    (b) Rulemaking.--Not later than the end of the 1-year period 
beginning on the date of enactment of this Act, the Securities and 
Exchange Commission shall issue rules to carry out the amendments made 
by subsection (a), including establishing the form required under such 
amendments.

  TITLE IV--ACCREDITED INVESTORS INCLUDE INDIVIDUALS RECEIVING ADVICE 
                       FROM CERTAIN PROFESSIONALS

SEC. 3401. ACCREDITED INVESTORS INCLUDE INDIVIDUALS RECEIVING ADVICE 
              FROM CERTAIN PROFESSIONALS.

    (a) Securities Act of 1933.--Section 2(a)(15) of the Securities Act 
of 1933 (15 U.S.C. 77b(a)(15)), as amended by sections 3202 and 3302, 
is further amended by adding at the end the following:
                            ``(v) any individual receiving 
                        individualized investment advice or 
                        individualized investment recommendations with 
                        respect to the applicable transaction from an 
                        individual described under section 
                        203.501(a)(10) of title 17, Code of Federal 
                        Regulations.
                    ``(B) Definitions.--In subparagraph (A)(v):
                            ``(i) Investment advice.--The term 
                        `investment advice' shall be interpreted 
                        consistently with the interpretation of the 
                        phrase `engages in the business of advising 
                        others, either directly or through publications 
                        or writings, as to the value of securities or 
                        as to the advisability of investing in, 
                        purchasing, or selling securities' under 
                        section 202(a)(11) of the Investment Advisers 
                        Act of 1940 (15 U.S.C. 80b-2(a)(11)).
                            ``(ii) Investment recommendation.--The term 
                        `investment recommendation' shall be 
                        interpreted consistently with the 
                        interpretation of the term `recommendation' 
                        under section 240.15l-1 of title 17, Code of 
                        Federal Regulations.''.
    (b) Conforming Changes to Regulations.--The Securities and Exchange 
Commission shall revise section 203.501(a) of title 17, Code of Federal 
Regulations, and any other definition of ``accredited investor'' in a 
rule of the Commission in the same manner as such definition is revised 
under subsection (a).
                                                 Union Calendar No. 112

118th CONGRESS

  1st Session

                               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.

_______________________________________________________________________

                             July 17, 2023

  Reported from the Committee on Financial Services with an amendment

                             July 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