,i #aac? ,,congress #b;d ,session ,h4 ,r4 #defd ,,9 ,,! ,,h\se ,,( ,,repres5tatives ,may #f1 #bjad ,mr4 ,mc,henry 7= himself & ,mr4 ,g>rett7 introduc$ ! foll[+ bill2 :i* 0 ref]r$ to ! ,committee on ,f9ancial ,s]vices ,a ,,bill ,to am5d ! ,jump/>t ,our ,bus9ess ,/>tups ,act to improve ! cr[dfund+ provisions1 & = o!r purposes4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,equity ,cr[dfund+ ,improvem5t ,act ( #bjad4 #b4 ,cr[dfund+ 7a7 ,repeal ( exi/+ law ,! ,,cr[dfund ,act is h]eby repeal$ & ! provisions ( law am5d$ by su* ,act are reviv$ or re/or$ z if su* ,act _h n be5 enact$4 7b7 ,new cr[dfund+ law ,! ,jump/>t ,our ,bus9ess ,/>tups ,act is am5d$-- 7#a7 by ins]t+ aft] title ,,ii ! foll[+3 ,,iii ,entrepr5eur ,access to ,capital #cja4 ,cr[dfund+ exemption 7a7 ,9 g5]al ,section #d7;a7 ( ! ,securities ,act ( #aicc 7#ae ,u4,s4,c4 #gg;d7a77#f77 is am5d$ by add+ at ! end ! foll[+3 7#f7 transactions involv+ ! (f] or sale ( securities by an issu]1 provid$ t-- 7,a7 ! aggregate am\nt sold )9 ! previ\s #ab-mon? p]iod 9 reliance ^u ?is exemption is-- 7i7 #c1jjj1jjj1 z su* am\nt is adju/$ by ! ,commission to reflect ! annual *ange 9 ! ,consum] ,price ,index = ,all ,urban ,consum]s publi%$ by ! ,bureau ( ,labor ,/ati/ics1 or less2 or 7ii7 if ! issu] provides pot5tial inve/ors ) audit$ f9ancial /atem5ts1 #e1jjj1jjj1 z su* am\nt is adju/$ by ! ,commission to reflect ! annual *ange 9 ! ,consum] ,price ,index = ,all ,urban ,consum]s publi%$ by ! ,bureau ( ,labor ,/ati/ics1 or less2 7,b7 ! aggregate am\nt sold to any inve/or :o is n an accr$it$ inve/or 9 reliance on ?is exemption )9 ! previ\s #ab-mon? p]iod does n exce$ ! great] (-- 7i7 #e1jjj1 z su* am\nt is adju/$ by ! ,commission to reflect ! annual *ange 9 ! ,consum] ,price ,index = ,all ,urban ,consum]s publi%$ by ! ,bureau ( ,labor ,/ati/ics2 7ii7 #aj p]c5t ( ! inve/or's annual income2 or 7iii7 #aj p]c5t ( ! inve/or's net wor?2 7,c7 9 ! case ( a transaction involv+ an int]m$i>y betwe5 ! issu] & ! inve/or1 su* int]m$i>y complies ) ! requirem5ts "u section #d;,a7a72 7,d7 if ! aggregate am\nt sold )9 ! previ\s #ab-mon? p]iod 9 reliance ^u ?is exemption is-- 7i7 #ejj1jjj or less1 ! issu] provides pot5tial inve/ors ) f9ancial /atem5ts t h be5 c]tifi$ by ! pr9cipal executive (fic] ( ! issu] to be true & complete 9 all mat]ial respects2 & 7ii7 m ?an #ejj1jjj & less ?an #c1jjj1jjj1 ! issu] provides pot5tial inve/ors ) f9ancial /atem5ts t h be5 review$ by a public acc\ntant :o is indep5d5t ( ! issu]1 us+ pr(essional /&>ds & proc$ures = su* review2 & 7,e7 at ! "t su* securities are issu$1 ! issu] is a corporation4 4 7b7 ,requirem5t on int]m$i>ies ,! ,securities ,act ( #aicc 7#ae ,u4,s4,c4 #gg;a et seq47 is am5d$ by ins]t+ aft] section #d ! foll[+3 #d;,a4 ,requirem5ts on int]m$i>ies ) respect to cr[dfund+ transactions 7a7 ,requirem5ts on int]m$i>ies ,= purposes ( section #d7;a77#f71 a p]son act+ z an int]m$i>y 9 a transaction involv+ ! (f] or sale ( securities %all comply ) ! requirem5ts ( ?is subsection if ! int]m$i>y-- 7#a7 regi/]s ) ! ,commission z-- 7,a7 a brok]2 or 7,b7 a p]son act+ z an int]m$i>y :o does n-- 7i7 (f] inve/m5t advice or recomm5dations2 7ii7 explicitly solicit pur*ases1 sales1 or (f]s to buy p>ticul> securities (f]$ or display$ on its website or portal2 7iii7 directly comp5sate employees1 ag5ts1 or o!r p]sons = direct sale ( securities display$ or ref]5c$ on its website or portal2 or 7iv7 manage1 possess1 or o!rwise h&le inve/or funds or securities2 7#b7 w>ns inve/ors1 includ+ on ! int]m$i>y's website us$ = ! (f] & sale ( su* securities1 ( ! speculative nature g5]ally applicable to inve/m5ts 9 />tups1 em]g+ bus9esses1 & small issu]s1 includ+ risks 9 ! second>y m>ket relat$ to illiquidity2 7#c7 w>ns inve/ors t !y are subject to ! re/riction on sales requirem5t describ$ "u subsection 7d72 7#d7 takes reasonable measures to r$uce ! risk ( fraud ) respect to su* transaction2 7#e7 provides ! ,commission ) ! int]m$i>y's physical address1 website address1 & ! names ( ! int]m$i>y1 ! *ief (fic] ( ! int]m$i>y 7or p]son fulfill+ a simil> role71 & any employee ( ! int]m$i>y responsible = ! int]m$i>y's direct compliance ) ! securities laws 7z def9$ "u section #c ( ! ,securities ,ex*ange ,act ( #aicd71 & updates su* in=mation ) ! ,commission )9 #f bus9ess days ( su* in=mation *ang+2 7#f7 provides ! ,commission ) cont9u\s inve/or-level access to ! int]m$i>y's website2 7#g7 requires ea* pot5tial inve/or to answ] que/ions demon/rat+-- 7,a7 an und]/&+ ( ! level ( risk g5]ally applicable to inve/m5ts 9 />tups1 em]g+ bus9esses1 & small issu]s2 7,b7 an und]/&+ ( ! risk ( illiquidity2 & 7,c7 su* o!r areas z ! ,commission1 9 consultation ) self-regulatory organizations 7z def9$ 9 section #c ( ! ,securities ,ex*ange ,act ( #aicd71 may det]m9e appropriate by rule or regulation2 7#h7 requires ! issu] to /ate a t>get (f]+ am\nt & a deadl9e to rea* ! t>get (f]+ am\nt & ensure ! ?ird p>ty cu/odian describ$ "u p>agraph 7#aa7 )holds (f]+ proce$s until-- 7,a7 aggregate capital rais$ f inve/ors o!r ?an ! issu] is no less ?an #ajj p]c5t ( ! t>get (f]+ am\nt2 & 7,b7 ! issu] has compli$ ) all requirem5ts "u ?is section2 7#i7 c>ries out a backgr\nd *eck on ! executive (fic]s1 directors1 & %>ehold]s ) #ae p]c5t or m vot+ control ( ! issu] 7or p]sons fulfill+ simil> roles7 to ensure su* p]sons w\ld n meet ! disqualification provisions adopt$ 9 accordance ) section #ibf ( ! ,dodd-,frank ,wall ,/reet ,re=m & ,consum] ,protection ,act2 7#aj7 provides ! ,commission & pot5tial inve/ors ) notice ( ! (f]+1 n lat] ?an ! fir/ day securities are (f]$ to pot5tial inve/ors1 includ+-- 7,a7 ! issu]'s "n1 legal /atus1 physical address1 & website address2 7,b7 ! names ( ! executive (fic]s1 directors1 & %>ehold]s ) #ae p]c5t or m vot+ control ( ! issu] 7or p]sons fulfill+ simil> roles72 7,c7 ! int5d$ use ( ! proce$s ( ! (f]+2 & 7,d7 ! t>get (f]+ am\nt & ! deadl9e to rea* ! t>get (f]+ am\nt2 7#aa7 outs\rces ca% functions to a qualifi$ ?ird p>ty cu/odian1 su* z a brok] or deal] regi/]$ "u section #ae7;b77#a7 ( ! ,securities ,ex*ange ,act ( #aicd or an insur$ depository in/itution2 7#ab7 ma9ta9s su* books & records z ! ,commission det]m9es appropriate2 7#ac7 makes available on ! int]m$i>y's website a me?od ( communication t p]mits ! issu] & inve/ors to communicate ) "o ano!r2 7#ad7 provides ! ,commission ) a notice ^u completion ( ! (f]+1 :i* %all include ! aggregate (f]+ am\nt & ! numb] ( pur*as]s2 & 7#ae7 does n (f] inve/m5t advice4 7b7 ,v]ification ( inve/or in=mation ,= purposes ( section #d7;a71 an int]m$i>y may rely on a c]tification by an inve/or z to-- 7#a7 ! inve/or's /atus z an accr$it$ inve/or2 & 7#b7 ) respect to an unaccr$it$ inve/or1 ! inve/or's annual income1 net wor?1 & ! aggregate am\nt ( securities sold to ! inve/or 9 reliance on ! exemption provid$ by section #d7;a7 )9 ! previ\s #ab-mon? p]iod4 7c7 ,in=mation ,available to ,/ates ,! ,commission %all make ! notices describ$ "u subsections 7a77#aj7 & 7a77#ad7 & ! in=mation describ$ "u subsection 7a77#e7 available to ! ,/ates4 7d7 ,re/riction on ,sales ,newly issu$ securities pur*as$ 9 a transaction made 9 reliance on section #d7;a77#f7 may n be resold by any p]son dur+ ! #a-ye> p]iod beg9n+ on ! date ( orig9al pur*ase1 unless su* securities are sold to-- 7#a7 ! issu] ( su* securities2 or 7#b7 an accr$it$ inve/or4 7e7 ,requirem5t = use ( int]m$i>ies :5 sell+ to unaccr$it$ inve/ors ,) respect to a transaction describ$ "u section #d7;a77#f71 an issu] may only ent] into a transaction ) an unaccr$it$ inve/or ?r\gh ! use ( an int]m$i>y1 & any resale ( a security orig9ally issu$ 9 reliance on section #d7;a77#f7 may only be made ) an unaccr$it$ inve/or ?r\gh ! use ( an int]m$i>y4 7f7 ,rules ( con/ruction 7#a7 ,no regi/ration z brok] ,) respect to a transaction ei!r made pursuant to section #d7;a77#f7 or involv+ ! resale ( a security orig9ally issu$ pursuant to section #d7;a77#f7 & involv+ an int]m$i>y1 su* int]m$i>y %all n be requir$ to regi/] z a brok] "u section #ae7;a77#a7 ( ! ,securities ,ex*ange ,act ( #aicd solely by reason ( p>ticipation 9 su* transaction4 7#b7 ,"r to select transactions ,an int]m$i>y may select 9 :i* transactions to s]ve z an int]m$i>y1 & su* selection %all n be consid]$ inve/m5t advice or subject ! int]m$i>y to regulation "u ! ,inve/m5t ,advis]s ,act ( #aidj4 7#c7 ,"r to t]m9ate transaction ,an int]m$i>y may review ! transaction & t]m9ate ! transaction at any "t if-- 7,a7 9 c>ry+ out ! int]m$i>y's due dilig5ce "u ! transaction1 ! int]m$i>y det]m9es t t]m9ation is appropriate2 7,b7 ! int]m$i>y is able to return all funds provid$ by pot5tial inve/ors2 & 7,c7 ! cu/odian has n transf]r$ ! (f]+ proce$s to ! issu]4 7#d7 ,no preclusion ( o!r capital rais+ ,no?+ 9 ?is section or section #d7;a77#f7 %all be con/ru$ z prev5t+ an issu] f rais+ capital ?r\gh securities (f]+s made 9 reliance on o!r exemptions f regi/ration4 4 7c7 ,rulemak+ ,n lat] ?an #abj days aft] ! date ( ! enactm5t ( ?is title1 ! ,securities & ,ex*ange ,commission %all issue su* rules z may be necess>y to c>ry out section #d;,a ( ! ,securities ,act ( #aicc4 ,9 issu+ su* rules1 ! ,commission %all consid] ! co/s & b5efits ( ! action4 7d7 ,disqualification ,n lat] ?an #abj days aft] ! date ( ! enactm5t ( ?is title1 ! ,securities & ,ex*ange ,commission %all by rule or regulation e/abli% disqualification provisions "u :i* an issu] %all n be eligible to utilize ! exemption "u section #d7;a77#f7 ( ! ,securities ,act ( #aicc bas$ on ! discipl9>y hi/ory ( ! issu] or its pr$ecessors1 affiliates1 (fic]s1 directors1 or p]sons fulfill+ simil> roles4 ,! ,commission %all also e/abli% disqualification provisions "u :i* an int]m$i>y %all n be eligible to act z an int]m$i>y 9 connection ) an (f]+ utiliz+ ! exemption "u section #d7;a77#f7 ( ! ,securities ,act ( #aicc bas$ on ! discipl9>y hi/ory ( ! int]m$i>y or its pr$ecessors1 affiliates1 (fic]s1 directors1 or p]sons fulfill+ simil> roles4 ,su* provisions %all be sub/antially simil> to ! disqualification provisions conta9$ 9 ! regulations adopt$ 9 accordance ) section #ibf ( ! ,dodd-,frank ,wall ,/reet ,re=m & ,consum] ,protection ,act 7#ae ,u4,s4,c4 #gg;d note74 7e7 ,treatm5t ( cr[dfund+ inve/m5t companies ,section #c7;c7 ( ! ,inve/m5t ,company ,act ( #aidj 7#ae ,u4,s4,c4 #hj;a-#c7;c77 is am5d$ by add+ at ! end ! foll[+3 7#ae7 ,any p]son sub/antially all ( ^: bus9ess is conf9$ to inve/+ 9 securities pur*as$ 9 a transaction made 9 reliance on section #d7;a77#f7 ( ! ,securities ,act ( #aicc4 4 #cjb4 ,exclusion ( cr[dfund+ inve/ors f %>ehold] cap ,section #ab7;g77#e7 ( ! ,securities ,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4 #ghl7g77#e77 is am5d$-- 7#a7 by /rik+ 7#e7 ,= ! purposes2 & ins]t+ ! foll[+3 7#e7 ,def9itions 7,a7 ,9 g5]al ,= ! purposes 2 & 7#b7 by add+ at ! end ! foll[+3 7,b7 ,exclusion = p]sons hold+ c]ta9 securities ,= purposes ( ?is subsection1 securities orig9ally issu$ 9 transactions describ$ "u section #d7;a77#f7 ( ! ,securities ,act ( #aicc %all nei!r be deem$ to be nor c\nt$ t[>ds ! def9ition ( held ( record4 4 #cjc4 ,preemption ( ,/ate law 7a7 ,9 g5]al ,section #ah7;b77#d7 ( ! ,securities ,act ( #aicc 7#ae ,u4,s4,c4 #ggr7b77#d77 is am5d$-- 7#a7 by r$esignat+ subp>agraphs 7,c7 & 7,d7 z subp>agraphs 7,d7 & 7,e71 respectively2 & 7#b7 by ins]t+ aft] subp>agraph 7,b7 ! foll[+3 7,c7 section #d7;a77#f72 4 7b7 ,cl>ification ( ! ,pres]vation ( ,/ate ,en=cem5t ,au?ority 7#a7 ,9 g5]al ,! am5dm5ts made by subsection 7a7 relate solely to ,/ate regi/ration1 docum5tation1 & (f]+ requirem5ts1 z describ$ "u section #ah7;a7 ( ! ,securities ,act ( #aicc 7#ae ,u4,s4,c4 #ggr7a771 & %all h no impact or limitation on o!r ,/ate au?ority to take en=cem5t action ) reg>d to an issu]1 int]m$i>y1 or any o!r p]son or entity us+ ! exemption f regi/ration provid$ by section #d7;a77#f7 ( su* ,act4 7#b7 ,cl>ification ( /ate jurisdiction ov] unlawful conduct ( int]m$i>ies1 issu]s1 & cu/odians ,section #ah7;c77#a7 ( ! ,securities ,act ( #aicc is am5d$ by /rik+ ) respect to fraud or deceit1 or unlawful conduct by a brok] or deal]1 9 connection ) securities or securities transactions4 & ins]t+ ! foll[+3 1 9 connection ) securities or securities transactions1 ) respect to-- 7,a7 fraud or deceit2 7,b7 unlawful conduct by a brok] or deal]2 & 7,c7 ) respect to a transaction describ$ "u section #d7;a77#f71 unlawful conduct by an int]m$i>y1 issu]1 or cu/odian4 4 2 & 7#b7 9 ! table ( cont5ts = su* ,act by am5d+ ! items relat+ to title ,,iii to read z foll[s3 ,,title ,,iii--,entrepr5eur ,access to ,capital ,sec4 #cja4 ,cr[dfund+ exemption4 ,sec4 #cjb4 ,exclusion ( cr[dfund+ inve/ors f %>ehold] cap4 ,sec4 #cjc4 ,preemption ( ,/ate law4 4