Accelerating Access to Capital Act of 2016

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Accelerating Access to Capital Act 
of 2016''.

                TITLE I--ACCELERATING ACCESS TO CAPITAL

SEC. 101. EXPANDED ELIGIBILITY FOR USE OF FORM S-3.

    Not later than 45 days after the date of the enactment of this Act, 
the Securities and Exchange Commission shall revise Form S-3--
            (1) so as to permit securities to be registered pursuant to 
        General Instruction I.B.1. of such form provided that either--
                    (A) the aggregate market value of the voting and 
                non-voting common equity held by non-affiliates of the 
                registrant is $75,000,000 or more; or
                    (B) the registrant has at least one class of common 
                equity securities listed and registered on a national 
                securities exchange; and
            (2) so as to remove the requirement of paragraph (c) from 
        General Instruction I.B.6. of such form.

                  TITLE II--MICRO-OFFERING SAFE HARBOR

SEC. 201. EXEMPTIONS FOR MICRO-OFFERINGS.

    (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) Certain Micro-Offerings.--
            ``(1) In general.--Except as provided in paragraph (2), 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) 
        that meet all of the following requirements:
                    ``(A) Pre-existing relationship.--Each purchaser 
                has a substantive pre-existing relationship with an 
                officer of the issuer, a director of the issuer, or a 
                shareholder holding 10 percent or more of the shares of 
                the issuer.
                    ``(B) 35 or fewer purchasers.--There are no more 
                than, or the issuer reasonably believes that there are 
                no more than, 35 purchasers of securities from the 
                issuer that are sold in reliance on the exemption 
                provided under subsection (a)(8) during the 12-month 
                period preceding such transaction.
                    ``(C) Small offering amount.--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 $500,000.
            ``(2) Disqualification.--
                    ``(A) In general.--The exemption provided under 
                subsection (a)(8) shall not be available for a 
                transaction involving a sale of securities if any 
                person described in subparagraph (B) would have 
                triggered disqualification pursuant to section 
                230.506(d) of title 17, Code of Federal Regulations.
                    ``(B) Persons described.--The persons described in 
                this subparagraph are the following:
                            ``(i) The issuer.
                            ``(ii) Any predecessor of the issuer.
                            ``(iii) Any affiliated issuer.
                            ``(iv) Any director, executive officer, 
                        other officer participating in the offering, 
                        general partner, or managing member of the 
                        issuer.
                            ``(v) Any beneficial owner of 20 percent or 
                        more of the issuer's outstanding voting equity 
                        securities, calculated on the basis of voting 
                        power.
                            ``(vi) Any promoter connected with the 
                        issuer in any capacity at the time of such 
                        sale.
                            ``(vii) Any investment manager of an issuer 
                        that is a pooled investment fund.
                            ``(viii) Any person that has been or will 
                        be paid (directly or indirectly) remuneration 
                        for solicitation of purchasers in connection 
                        with such sale of securities.
                            ``(ix) Any general partner or managing 
                        member of any such investment manager or 
                        solicitor.
                            ``(x) Any director, executive officer, or 
                        other officer participating in the offering of 
                        any such investment manager or solicitor or 
                        general partner or managing member of such 
                        investment manager or solicitor.''.
    (b) 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 III--PRIVATE PLACEMENT IMPROVEMENT

SEC. 301. REVISIONS TO SEC REGULATION D.

    Not later than 45 days following the date of the enactment of this 
Act, the Securities and Exchange Commission shall revise Regulation D 
(17 CFR 501 et seq.) in accordance with the following:
            (1) The Commission shall revise Form D filing requirements 
        to require an issuer offering or selling securities in reliance 
        on an exemption provided under Rule 506 of Regulation D to file 
        with the Commission a single notice of sales containing the 
        information required by Form D for each new offering of 
        securities no earlier than 15 days after the date of the first 
        sale of securities in the offering. The Commission shall not 
        require such an issuer to file any notice of sales containing 
        the information required by Form D except for the single notice 
        described in the previous sentence.
            (2) The Commission shall make the information contained in 
        each Form D filing 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.
            (3) The Commission shall not condition the availability of 
        any exemption for an issuer under Rule 506 of Regulation D (17 
        CFR 230.506) on the issuer's or any other person's filing with 
        the Commission of a Form D or any similar report.
            (4) The Commission shall not require issuers to submit 
        written general solicitation materials to the Commission in 
        connection with a Rule 506(c) offering, except when the 
        Commission requests such materials pursuant to the Commission's 
        authority under section 8A or section 20 of the Securities Act 
        of 1933 (15 U.S.C. 77h-1 or 77t) or section 9, 10(b), 21A, 21B, 
        or 21C of the Securities Exchange Act of 1934 (15 U.S.C. 78i, 
        78j(b), 78u-1, 78u-2, or 78u-3).
            (5) The Commission shall not extend the requirements 
        contained in Rule 156 to private funds.
            (6) The Commission shall revise Rule 501(a) of Regulation D 
        to provide that a person who is a ``knowledgeable employee'' of 
        a private fund or the fund's investment adviser, as defined in 
        Rule 3c-5(a)(4) (17 CFR 270.3c-5(a)(4)), shall be an accredited 
        investor for purposes of a Rule 506 offering of a private fund 
        with respect to which the person is a knowledgeable employee.

            Passed the House of Representatives September 8, 2016.

            Attest:

                                                 KAREN L. HAAS,

                                                                 Clerk.

Summary: Accelerating Access to Capital Act of 2016 TITLE I ACCELERATING ACCESS TO CAPITAL This bill directs the Securities and Exchange Commission (SEC) to revise Form S-3 so as to permit securities to be registered pursuant to General Instruction I. B.1. of the form if: (1) the aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant is $75 million or more, or (2) the registrant has at least one class of common equity securities listed and registered on a national securities exchange. The SEC must remove a certain listing and registration requirement from General Instruction I. B.6. of Form S-3. TITLE II MICRO-OFFERING SAFE HARBOR The Securities Act of 1933 is amended to exempt from specified prohibitions against the sale or delivery after sale of unregistered securities, among other things, transactions involving the sale of securities by an issuer of micro-offerings if: each purchaser has a substantive pre-existing relationship with either an officer or director of the issuer, or with a shareholder holding 10 or more of the issuer's shares. During the 12-month period preceding the transaction there are no more than 35 purchasers of such micro-offerings sold in reliance on this exemption. And the aggregate amount of all securities sold by the issuer during the 12-month period preceding the transaction does not exceed $500,000. The exemption shall not apply, however, to transactions involving a sale of securities if issuers, officers, beneficial owners, promotors, investment managers, or other specified persons would have triggered the SEC's bad actor disqualification standards for certain previous securities violations or criminal convictions. These bad actors are prohibited from participating in a micro-offering. The bill also exempts such micro-offerings from state regulation of securities offerings. TITLE III PRIVATE PLACEMENT IMPROVEMENT The SEC must revise the filing requirements of Regulation D to require an issuer that offers or sells securities in reliance upon a certain exemption from registration to file, no earlier than 15 days after the date of first sale of such securities, a single notice of sales containing the information required by Form D for each new offering of securities. The SEC shall not: (1) require the issuer to file any notice of sales containing the information required by Form D except for this single notice. (2) condition the availability of the Rule 506 exemption upon the filing of a Form D or similar report. Or (3) require issuers to submit written general solicitation materials in connection with a limited offering subject to Rule 506, except when it requests such materials pursuant to specified authority. The SEC shall revise a specified rule, regarding a Rule 506 offering of a private fund, to characterize as an accredited investor a knowledgeable employee of that private fund or the fund's investment adviser. The SEC shall not extend to private funds the requirements governing investment company sales literature.