,,ii #aadth ,,congress #b;d ,session ,h4 ,r4 #fdbg ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,december #f1 #bjaf,received ,,an ,,act ,to improve the operation of ,united ,states capital markets1 and for other purposes4 #a4 ,short title2 table of contents 7a7 ,short title ,this ,act may be cited as the ,creating ,financial ,prosperity for ,businesses and ,investors ,act4 7b7 ,table of contents ,the table of contents for this ,act is as follows3 ,sec4 #a4 ,short title2 table of contents4 ,title ,i--,small ,business ,capital ,formation ,enhancement ,sec4 #aja4 ,annual review of government-business forum on capital formation4 ,title ,,ii--,,sec ,small ,business ,advocate ,sec4 #bja4 ,establishment of ,office of the ,advocate for ,small ,business ,capital ,formation and ,small ,business ,capital ,formation ,advisory ,committee4 ,title ,,iii--,supporting ,america's ,innovators ,sec4 #cja4 ,investor limitation for qualifying venture capital funds4 ,title ,,iv--,fix ,crowdfunding ,sec4 #dja4 ,crowdfunding vehicles4 ,sec4 #djb4 ,crowdfunding exemption from registration4 ,title ,v--,fair ,investment ,opportunities for ,professional ,experts ,sec4 #eja4 ,definition of accredited investor4 ,title ,,vi--,u4,s4 ,territories ,investor ,protection ,sec4 #fja4 ,termination of exemption4 ,i ,small ,business ,capital ,formation ,enhancement #aja4 ,annual review of government-business forum on capital formation ,section #ejc of the ,small ,business ,investment ,incentive ,act of #aihj 7#ae ,u4,s4,c4 #hj;c-#a7 is amended by adding at the end the following3 7e7 ,the ,commission shall-- 7#a7 review the findings and recommendations of the forum2 and 7#b7 each time the forum submits a finding or recommendation to the ,commission1 promptly issue a public statement-- 7,a7 assessing the finding or recommendation of the forum2 and 7,b7 disclosing the action1 if any1 the ,commission intends to take with respect to the finding or recommendation4 4 ,,ii ,,sec ,small ,business ,advocate #bja4 ,establishment of ,office of the ,advocate for ,small ,business ,capital ,formation and ,small ,business ,capital ,formation ,advisory ,committee 7a7 ,office of the advocate for small business capital formation ,section #d of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;d7 is amended by adding at the end the following3 7j7 ,office of the advocate for small business capital formation 7#a7 ,office established ,there is established within the ,commission the ,office of the ,advocate for ,small ,business ,capital ,formation 7hereafter in this subsection referred to as the ,office74 7#b7 ,advocate for small business capital formation 7,a7 ,in general ,the head of the ,office shall be the ,advocate for ,small ,business ,capital ,formation1 who shall-- 7i7 report directly to the ,commission2 and 7ii7 be appointed by the ,commission1 from among individuals having experience in advocating for the interests of small businesses and encouraging small business capital formation4 7,b7 ,compensation ,the annual rate of pay for the ,advocate for ,small ,business ,capital ,formation shall be equal to the highest rate of annual pay for other senior executives who report directly to the ,commission4 7,c7 ,no current employee of the commission ,an individual may not be appointed as the ,advocate for ,small ,business ,capital ,formation if the individual is currently employed by the ,commission4 7#c7 ,staff of office ,the ,advocate for ,small ,business ,capital ,formation1 after consultation with the ,commission1 may retain or employ independent counsel1 research staff1 and service staff1 as the ,advocate for ,small ,business ,capital ,formation determines to be necessary to carry out the functions of the ,office4 7#d7 ,functions of the advocate for small business capital formation ,the ,advocate for ,small ,business ,capital ,formation shall-- 7,a7 assist small businesses and small business investors in resolving significant problems such businesses and investors may have with the ,commission or with self-regulatory organizations2 7,b7 identify areas in which small businesses and small business investors would benefit from changes in the regulations of the ,commission or the rules of self-regulatory organizations2 7,c7 identify problems that small businesses have with securing access to capital1 including any unique challenges to minority-owned and women-owned small businesses2 7,d7 analyze the potential impact on small businesses and small business investors of-- 7i7 proposed regulations of the ,commission that are likely to have a significant economic impact on small businesses and small business capital formation2 and 7ii7 proposed rules that are likely to have a significant economic impact on small businesses and small business capital formation of self-regulatory organizations registered under this title2 7,e7 conduct outreach to small businesses and small business investors1 including through regional roundtables1 in order to solicit views on relevant capital formation issues2 7,f7 to the extent practicable1 propose to the ,commission changes in the regulations or orders of the ,commission and to ,congress any legislative1 administrative1 or personnel changes that may be appropriate to mitigate problems identified under this paragraph and to promote the interests of small businesses and small business investors2 7,g7 consult with the ,investor ,advocate on proposed recommendations made under subparagraph 7,f72 and 7,h7 advise the ,investor ,advocate on issues related to small businesses and small business investors4 7#e7 ,access to documents ,the ,commission shall ensure that the ,advocate for ,small ,business ,capital ,formation has full access to the documents and information of the ,commission and any self-regulatory organization1 as necessary to carry out the functions of the ,office4 7#f7 ,annual report on activities 7,a7 ,in general ,not later than ,december #ca of each year after #bjaf1 the ,advocate for ,small ,business ,capital ,formation shall submit to the ,committee on ,banking1 ,housing1 and ,urban ,affairs of the ,senate and the ,committee on ,financial ,services of the ,house of ,representatives a report on the activities of the ,advocate for ,small ,business ,capital ,formation during the immediately preceding fiscal year4 7,b7 ,contents ,each report required under subparagraph 7,a7 shall include-- 7i7 appropriate statistical information and full and substantive analysis2 7ii7 information on steps that the ,advocate for ,small ,business ,capital ,formation has taken during the reporting period to improve small business services and the responsiveness of the ,commission and self-regulatory organizations to small business and small business investor concerns2 7iii7 a summary of the most serious issues encountered by small businesses and small business investors1 including any unique issues encountered by minority-owned and women-owned small businesses and their investors1 during the reporting period2 7iv7 an inventory of the items summarized under clause 7iii7 7including items summarized under such clause for any prior reporting period on which no action has been taken or that have not been resolved to the satisfaction of the ,advocate for ,small ,business ,capital ,formation as of the beginning of the reporting period covered by the report7 that includes-- 7,i7 identification of any action taken by the ,commission or the self-regulatory organization and the result of such action2 7,,ii7 the length of time that each item has remained on such inventory2 and 7,,iii7 for items on which no action has been taken1 the reasons for inaction1 and an identification of any official who is responsible for such action2 7v7 recommendations for such changes to the regulations1 guidance and orders of the ,commission and such legislative actions as may be appropriate to resolve problems with the ,commission and self-regulatory organizations encountered by small businesses and small business investors and to encourage small business capital formation2 and 7vi7 any other information1 as determined appropriate by the ,advocate for ,small ,business ,capital ,formation4 7,c7 ,confidentiality ,no report required by subparagraph 7,a7 may contain confidential information4 7,d7 ,independence ,each report required under subparagraph 7,a7 shall be provided directly to the committees of ,congress listed in such subparagraph without any prior review or comment from the ,commission1 any commissioner1 any other officer or employee of the ,commission1 or the ,office of ,management and ,budget4 7#g7 ,regulations ,the ,commission shall establish procedures requiring a formal response to all recommendations submitted to the ,commission by the ,advocate for ,small ,business ,capital ,formation1 not later than #c months after the date of such submission4 7#h7 ,government-business forum on small business capital formation ,the ,advocate for ,small ,business ,capital ,formation shall be responsible for planning1 organizing1 and executing the annual ,government-,business ,forum on ,small ,business ,capital ,formation described in section #ejc of the ,small ,business ,investment ,incentive ,act of #aihj 7#ae ,u4,s4,c4 #hj;c-#a74 7#i7 ,rule of construction ,nothing in this subsection may be construed as replacing or reducing the responsibilities of the ,investor ,advocate with respect to small business investors4 4 7b7 ,small business capital formation advisory committee ,title ,i of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;a et seq47 is amended by adding at the end the following3 #dj4 ,small ,business ,capital ,formation ,advisory ,committee 7a7 ,establishment and purpose 7#a7 ,establishment ,there is established within the ,commission the ,small ,business ,capital ,formation ,advisory ,committee 7hereafter in this section referred to as the ,committee74 7#b7 ,functions 7,a7 ,in general ,the ,committee shall provide the ,commission with advice on the ,commission's rules1 regulations1 and policies with regard to the ,commission's mission of protecting investors1 maintaining fair1 orderly1 and efficient markets1 and facilitating capital formation1 as such rules1 regulations1 and policies relate to-- 7i7 capital raising by emerging1 privately held small businesses 7emerging companies7 and publicly traded companies with less than #bej1jjj1jjj in public market capitalization 7smaller public companies7 through securities offerings1 including private and limited offerings and initial and other public offerings2 7ii7 trading in the securities of emerging companies and smaller public companies2 and 7iii7 public reporting and corporate governance requirements of emerging companies and smaller public companies4 7,b7 ,limitation ,the ,committee shall not provide any advice with respect to any policies1 practices1 actions1 or decisions concerning the ,commission's enforcement program4 7b7 ,membership 7#a7 ,in general ,the members of the ,committee shall be-- 7,a7 the ,advocate for ,small ,business ,capital ,formation2 7,b7 not fewer than #aj1 and not more than #bj1 members appointed by the ,commission1 from among individuals-- 7i7 who represent-- 7,i7 emerging companies engaging in private and limited securities offerings or considering initial public offerings 7,,ipo7 7including the companies' officers and directors72 7,,ii7 the professional advisors of such companies 7including attorneys1 accountants1 investment bankers1 and financial advisors72 and 7,,iii7 the investors in such companies 7including angel investors1 venture capital funds1 and family offices72 7ii7 who are officers or directors of minority-owned small businesses or women-owned small businesses2 7iii7 who represent-- 7,i7 smaller public companies 7including the companies' officers and directors72 7,,ii7 the professional advisors of such companies 7including attorneys1 auditors1 underwriters1 and financial advisors72 and 7,,iii7 the pre-,,ipo and post-,,ipo investors in such companies 7both institutional1 such as venture capital funds1 and individual1 such as angel investors72 and 7iv7 who represent participants in the marketplace for the securities of emerging companies and smaller public companies1 such as securities exchanges1 alternative trading systems1 analysts1 information processors1 and transfer agents2 and 7,c7 three non-voting members-- 7i7 one of whom shall be appointed by the ,investor ,advocate2 7ii7 one of whom shall be appointed by the ,north ,american ,securities ,administrators ,association2 and 7iii7 one of whom shall be appointed by the ,administrator of the ,small ,business ,administration4 7#b7 ,term ,each member of the ,committee appointed under subparagraph 7,b71 7,c77ii71 or 7,c77iii7 of paragraph 7#a7 shall serve for a term of #d years4 7#c7 ,members not commission employees ,members appointed under subparagraph 7,b71 7,c77ii71 or 7,c77iii7 of paragraph 7#a7 shall not be treated as employees or agents of the ,commission solely because of membership on the ,committee4 7c7 ,chairman2 vice chairman2 secretary2 assistant secretary 7#a7 ,in general ,the members of the ,committee shall elect1 from among the members of the ,committee-- 7,a7 a chairman2 7,b7 a vice chairman2 7,c7 a secretary2 and 7,d7 an assistant secretary4 7#b7 ,term ,each member elected under paragraph 7#a7 shall serve for a term of #c years in the capacity for which the member was elected under paragraph 7#a74 7d7 ,meetings 7#a7 ,frequency of meetings ,the ,committee shall meet-- 7,a7 not less frequently than four times annually1 at the call of the chairman of the ,committee2 and 7,b7 from time to time1 at the call of the ,commission4 7#b7 ,notice ,the chairman of the ,committee shall give the members of the ,committee written notice of each meeting1 not later than #b weeks before the date of the meeting4 7e7 ,compensation and travel expenses ,each member of the ,committee who is not a full-time employee of the ,united ,states shall-- 7#a7 be entitled to receive compensation at a rate not to exceed the daily equivalent of the annual rate of basic pay in effect for a position at level ,v of the ,executive ,schedule under section #ecaf of title #e1 ,united ,states ,code1 for each day during which the member is engaged in the actual performance of the duties of the ,committee2 and 7#b7 while away from the home or regular place of business of the member in the performance of services for the ,committee1 be allowed travel expenses1 including per diem in lieu of subsistence1 in the same manner as persons employed intermittently in the ,government service are allowed expenses under section #egjc of title #e1 ,united ,states ,code4 7f7 ,staff ,the ,commission shall make available to the ,committee such staff as the chairman of the ,committee determines are necessary to carry out this section4 7g7 ,review by commission ,the ,commission shall-- 7#a7 review the findings and recommendations of the ,committee2 and 7#b7 each time the ,committee submits a finding or recommendation to the ,commission1 promptly issue a public statement-- 7,a7 assessing the finding or recommendation of the ,committee2 and 7,b7 disclosing the action1 if any1 the ,commission intends to take with respect to the finding or recommendation4 7h7 ,federal advisory committee act ,the ,federal ,advisory ,committee ,act 7#e ,u4,s4,c4 ,app47 shall not apply with respect to the ,committee and its activities4 4 7c7 ,annual government-,business forum on small business capital formation ,section #ejc7;a7 of the ,small ,business ,investment ,incentive ,act of #aihj 7#ae ,u4,s4,c4 #hj;c-#a7;a77 is amended by inserting 7acting through the ,office of the ,advocate for ,small ,business ,capital ,formation and in consultation with the ,small ,business ,capital ,formation ,advisory ,committee7 after ,securities and ,exchange ,commission4 ,,iii ,supporting ,america's ,innovators #cja4 ,investor limitation for qualifying venture capital funds ,section #c7;c77#a7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#c7;c77#a77 is amended-- 7#a7 by inserting after one hundred persons the following3 7or1 with respect to a qualifying venture capital fund1 #bej persons72 and 7#b7 by adding at the end the following3 7,c7 ,the term qualifying venture capital fund means any venture capital fund 7as defined pursuant to section #bjc7l77#a7 of the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#c7l77#a77 with no more than #aj1jjj1jjj in invested capital1 as such dollar amount is annually adjusted by the ,commission to reflect the change in the ,consumer ,price ,index for ,all ,urban ,consumers published by the ,bureau of ,labor ,statistics of the ,department of ,labor4 4 ,,iv ,fix ,crowdfunding #dja4 ,crowdfunding vehicles 7a7 ,amendments to the ,securities ,act of #aicc ,the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;a et seq47 is amended-- 7#a7 in section #d;,a7f77#c71 by inserting by any of paragraphs 7#a7 through 7#ad7 of before section #c7;c72 and 7#b7 in section #d7;a77#f77;,b71 by inserting after any investor the following3 1 other than a crowdfunding vehicle 7as defined in section #b7;a7 of the ,investment ,company ,act of #aidj714 7b7 ,amendments to the ,investment ,company ,act of #aidj ,the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#a et seq47 is amended-- 7#a7 in section #b7;a71 by adding at the end the following3 7#ee7 ,the term crowdfunding vehicle means a company-- 7,a7 whose purpose 7as set forth in its organizational documents7 is limited to acquiring1 holding1 and disposing securities issued by a single company in one or more transactions and made pursuant to section #d7;a77#f7 of the ,securities ,act of #aicc2 7,b7 which issues only one class of securities2 7,c7 which receives no compensation in connection with such acquisition1 holding1 or disposition of securities2 7,d7 no associated person of which receives any compensation in connection with such acquisition1 holding or disposition of securities unless such person is acting as or on behalf of an investment adviser registered under the ,investment ,advisers ,act of #aidj or registered as an investment adviser in the ,state in which the investment adviser maintains its principal office and place of business2 7,e7 the securities of which have been issued in a transaction made pursuant to section #d7;a77#f7 of the ,securities ,act of #aicc1 where both the crowdfunding vehicle and the company whose securities it holds are co-issuers2 7,f7 which is current in its ongoing disclosure obligations under ,rule #bjb of ,regulation ,crowdfunding 7#ag ,,cfr #bbg4bjb72 7,g7 the company whose securities it holds is current in its ongoing disclosure obligations under ,rule #bjb of ,regulation ,crowdfunding 7#ag ,,cfr #bbg4bjb72 and 7,h7 is advised by an investment adviser registered under the ,investment ,advisers ,act of #aidj or registered as an investment adviser in the ,state in which the investment adviser maintains its principal office and place of business4 2 and 7#b7 in section #c7;c71 by adding at the end the following3 7#ae7 ,any crowdfunding vehicle4 4 #djb4 ,crowdfunding exemption from registration ,section #ab7;g77#f7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #ghl7g77#f77 is amended-- 7#a7 by striking ,the ,commission and inserting the following3 7,a7 ,in general ,the ,commission 2 7#b7 by striking section #d7f7 and inserting section #d7;a77#f72 and 7#c7 by adding at the end the following3 7,b7 ,treatment of securities issued by certain issuers ,an exemption under subparagraph 7,a7 shall be unconditional for securities offered by an issuer that had a public float of less than #ge1jjj1jjj as of the last business day of the issuer's most recently completed semiannual period1 computed by multiplying the aggregate worldwide number of shares of the issuer's common equity securities held by non-affiliates by the price at which such securities were last sold 7or the average bid and asked prices of such securities7 in the principal market for such securities or1 in the event the result of such public float calculation is zero1 had annual revenues of less than #ej1jjj1jjj as of the issuer's most recently completed fiscal year4 4 ,v ,fair ,investment ,opportunities for ,professional ,experts #eja4 ,definition of accredited investor ,section #b7;a77#ae7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #gg;b7a77#ae77 is amended-- 7#a7 by redesignating clauses 7i7 and 7ii7 as subparagraphs 7,a7 and 7,f71 respectively2 and 7#b7 in subparagraph 7,a7 7as so redesignated71 by striking 2 or and inserting a semicolon1 and inserting after such subparagraph the following3 7,b7 any natural person whose individual net worth1 or joint net worth with that person's spouse1 exceeds #a1jjj1jjj 7which amount1 along with the amounts set forth in subparagraph 7,c71 shall be adjusted for inflation by the ,commission every #e years to the nearest #aj1jjj to reflect the change in the ,consumer ,price ,index for ,all ,urban ,consumers published by the ,bureau of ,labor ,statistics7 where1 for purposes of calculating net worth under this subparagraph-- 7i7 the person's primary residence shall not be included as an asset2 7ii7 indebtedness that is secured by the person's primary residence1 up to the estimated fair market value of the primary residence at the time of the sale of securities1 shall not be included as a liability 7except that if the amount of such indebtedness outstanding at the time of sale of securities exceeds the amount outstanding #fj days before such time1 other than as a result of the acquisition of the primary residence1 the amount of such excess shall be included as a liability72 and 7iii7 indebtedness that is secured by the person's primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of securities shall be included as a liability2 7,c7 any natural person who had an individual income in excess of #bjj1jjj in each of the two most recent years or joint income with that person's spouse in excess of #cjj1jjj in each of those years and has a reasonable expectation of reaching the same income level in the current year2 7,d7 any natural person who is currently licensed or registered as a broker or investment adviser by the ,commission1 the ,financial ,industry ,regulatory ,authority1 or an equivalent self-regulatory organization 7as defined in section #c7;a77#bf7 of the ,securities ,exchange ,act of #aicd71 or the securities division of a ,state or the equivalent ,state division responsible for licensing or registration of individuals in connection with securities activities2 7,e7 any natural person the ,commission determines1 by regulation1 to have demonstrable education or job experience to qualify such person as having professional knowledge of a subject related to a particular investment1 and whose education or job experience is verified by the ,financial ,industry ,regulatory ,authority or an equivalent self-regulatory organization 7as defined in section #c7;a77#bf7 of the ,securities ,exchange ,act of #aicd72 or 4 ,,vi ,u4,s4 ,territories ,investor ,protection #fja4 ,termination of exemption 7a7 ,in general ,section #f7;a7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#f7;a77 is amended by striking paragraph 7#a74 7b7 ,effective date and safe harbor 7#a7 ,effective date ,except as provided in paragraph 7#b71 the amendment made by subsection 7a7 shall take effect on the date of the enactment of this ,act4 7#b7 ,safe harbor ,with respect to a company that is exempt under section #f7;a77#a7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#f7;a77#a77 on the day before the date of the enactment of this ,act1 the amendment made by subsection 7a7 shall take effect on the date that is #c years after the date of the enactment of this ,act4 7#c7 ,extension of safe harbor ,the ,securities and ,exchange ,commission1 by rule and regulation upon its own motion1 or by order upon application1 may conditionally or unconditionally1 under section #f7;c7 of the ,investment ,company ,act of #aidj 7#ae ,u4,s4,c4 #hj;a-#f7;c771 further delay the effective date for a company described in paragraph 7#b7 for a maximum of #c years following the initial #c-year period if1 before the end of the initial #c-year period1 the ,commission determines that such a rule1 regulation1 motion1 or order is necessary or appropriate in the public interest and for the protection of investors4 ,passed the ,house of ,representatives ,december #e1 #bjaf4,karen ,l4 ,haas1,clerk