IIB 

116TH CONGRESS 

1ST SESSION H. R. 4860 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 29, 2019 

Received; read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

AN ACT 

To amend the Securities Act of 1933 to subject crowdfunding 

vehicles to the jurisdiction of the Securities and Exchange Commission, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Crowdfunding Amend3 ments Act’’. 

4 SEC. 2. CROWDFUNDING VEHICLES. 

5 (a) AMENDMENTS TO THE SECURITIES ACT OF

6 1933.—The Securities Act of 1933 (15 U.S.C. 77a et 

7 seq.) is amended— 

8 (1) in section 2(a) (15 U.S.C. 77b(a)), by add9 ing at the end the following: 

10 ‘‘(20) The term ‘crowdfunding vehicle’ has the 

11 meaning given the term in section 3(c)(15)(B) of the 

12 Investment Company Act of 1940 (15 U.S.C. 80a– 

13 3(c)(15)(B)).’’; 

14 (2) in section 4(a)(6) (15 U.S.C. 77d(a)(6))— 

15 (A) in subparagraph (A)— 

16 (i) by inserting ‘‘, other than a 

17 crowdfunding vehicle,’’ after ‘‘sold to all 

18 investors’’; and 

19 (ii) by inserting ‘‘other than a 

20 crowdfunding vehicle,’’ after ‘‘the issuer,’’; 

21 and 

22 (B) in subparagraph (B), in the matter 

23 preceding clause (i), by inserting ‘‘, other than 

24 a crowdfunding vehicle,’’ after ‘‘any investor’’; 

25 and 

26 (3) in section 4A(f) (15 U.S.C. 77d–1(f))— 


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1 (A) in the matter preceding paragraph (1), 

2 by striking ‘‘Section 4(6)’’ and inserting ‘‘Sec3 tion 4(a)(6)’’; and 

4 (B) in paragraph (3), by inserting ‘‘by any 

5 of paragraphs (1) through (14) of’’ before ‘‘sec6 tion 3(c)’’. 

7 (b) AMENDMENTS TO THE INVESTMENT COMPANY

8 ACT OF 1940.—Section 3(c) of the Investment Company 

9 Act of 1940 (15 U.S.C. 80a–3(c)) is amended by adding 

10 at the end the following: 

11 ‘‘(15)(A) Any crowdfunding vehicle. 

12 ‘‘(B) For purposes of this paragraph, the term 

13 ‘crowdfunding vehicle’ means a company— 

14 ‘‘(i) the purpose of which (as set forth in 

15 the organizational documents of the company) 

16 is limited to acquiring, holding, and disposing 

17 of securities issued by a single company in one 

18 or more transactions made under section 

19 4(a)(6) of the Securities Act of 1933 (15 

20 U.S.C. 77d(a)(6)); 

21 ‘‘(ii) that issues only one class of securi22 ties; 

23 ‘‘(iii) that receives no compensation in con24 nection with the acquisition, holding, or disposi25 tion of securities described in clause (i); 


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1 ‘‘(iv) no investment adviser or associated 

2 person of which receives any compensation on 

3 the basis of a share of capital gains upon, or 

4 capital appreciation of, any portion of the funds 

5 of an investor of the company; 

6 ‘‘(v) the securities of which have been 

7 issued in a transaction made under section 

8 4(a)(6) of the Securities Act of 1933 (15 

9 U.S.C. 77d(a)(6)), where both the 

10 crowdfunding vehicle and the company whose 

11 securities the crowdfunding vehicle holds are co12 issuers; 

13 ‘‘(vi) that is current with respect to ongo14 ing reporting requirements under section 

15 227.202 of title 17, Code of Federal Regula16 tions, or any successor regulation; 

17 ‘‘(vii) that holds securities of a company 

18 that is subject to ongoing reporting require19 ments under section 227.202 of title 17, Code 

20 of Federal Regulations, or any successor regula21 tion; 

22 ‘‘(viii) that is advised by an investment ad23 viser that is— 


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1 ‘‘(I) registered under the Investment 

2 Advisers Act of 1940 (15 U.S.C. 80b–1 et 

3 seq.); and 

4 ‘‘(II) required to— 

5 ‘‘(aa) disclose to the investors of 

6 the company any fees charged by the 

7 investment adviser; and 

8 ‘‘(bb) obtain approval from a ma9 jority of the investors of the company 

10 with respect to any increase in the 

11 fees described in item (aa); and 

12 ‘‘(ix) that meets such other requirements 

13 as the Commission may, by rule, determine nec14 essary or appropriate in the public interest and 

15 for the protection of investors.’’. 

16 (c) AMENDMENTS TO THE INVESTMENT ADVISERS

17 ACT OF 1940.—The Investment Advisers Act of 1940 (15 

18 U.S.C. 80b–1 et seq.) is amended— 

19 (1) in section 202(a) (15 U.S.C. 80b–2(a))— 

20 (A) by redesignating the second paragraph 

21 (29) as paragraph (31); and 

22 (B) by adding at the end the following: 

23 ‘‘(32) The term ‘crowdfunding vehicle’ has the 

24 meaning given the term in section 3(c)(15)(B) of the 


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1 Investment Company Act of 1940 (15 U.S.C. 80a– 

2 3(c)(15)(B)). 

3 ‘‘(33)(A) The term ‘crowdfunding vehicle ad4 viser’ means an investment adviser that acts as an 

5 investment adviser solely with respect to 

6 crowdfunding vehicles. 

7 ‘‘(B) A determination, for the purposes of sub8 paragraph (A), regarding whether an investment ad9 viser acts as an investment adviser solely with re10 spect to crowdfunding vehicles shall not include any 

11 consideration of the activity of any affiliate of the 

12 investment adviser.’’; 

13 (2) in section 203 (15 U.S.C. 80b–3), by add14 ing at the end the following: 

15 ‘‘(o) CROWDFUNDING VEHICLE ADVISERS.— 

16 ‘‘(1) IN GENERAL.—A crowdfunding vehicle ad17 viser shall be required to register under this section. 

18 ‘‘(2) TAILORED REQUIREMENTS.—As necessary 

19 or appropriate in the public interest and for the pro20 tection of investors, and to promote efficiency, com21 petition, and capital formation, the Commission shall 

22 tailor the requirements under section 275.206(4)–2 

23 of title 17, Code of Federal Regulations, with re24 spect to the application of those requirements to a 

25 crowdfunding vehicle adviser.’’; and 


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1 (3) in section 203A(a) (15 U.S.C. 80b–3a(a))— 

2 (A) in paragraph (1)— 

3 (i) in subparagraph (A), by striking 

4 ‘‘or’’ at the end; 

5 (ii) in subparagraph (B), by striking 

6 the period at the end and inserting ‘‘; or’’; 

7 and 

8 (iii) by adding at the end the fol9 lowing: 

10 ‘‘(C) is a crowdfunding vehicle adviser.’’; 

11 and 

12 (B) in paragraph (2)— 

13 (i) in subparagraph (A), by inserting 

14 ‘‘a crowdfunding vehicle adviser,’’ after 

15 ‘‘unless the investment adviser is’’; and 

16 (ii) in subparagraph (B)(ii), in the 

17 matter preceding subclause (I), by insert18 ing ‘‘except with respect to a crowdfunding 

19 vehicle adviser,’’ before ‘‘has assets’’. 

20 SEC. 3. CROWDFUNDING EXEMPTION FROM REGISTRA21 TION. 

22 Section 12(g)(6) of the Securities Exchange Act of 

23 1934 (15 U.S.C. 78l(g)(6)) is amended— 

24 (1) by striking ‘‘The Commission’’ and insert25 ing the following: 


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1 ‘‘(A) IN GENERAL.—The Commission’’; 

2 (2) in subparagraph (A), as so designated, by 

3 striking ‘‘section 4(6)’’ and inserting ‘‘section 

4 4(a)(6)’’; and 

5 (3) by adding at the end the following: 

6 ‘‘(B) TREATMENT OF SECURITIES ISSUED

7 BY CERTAIN ISSUERS.— 

8 ‘‘(i) IN GENERAL.—An exemption 

9 under subparagraph (A) shall be uncondi10 tional for securities offered by an issuer 

11 that had a public float of less than 

12 $75,000,000, as of the last business day of 

13 the most recently completed semiannual 

14 period of the issuer, which shall be cal15 culated in accordance with clause (ii). 

16 ‘‘(ii) CALCULATION.— 

17 ‘‘(I) IN GENERAL.—A public 

18 float described in clause (i) shall be 

19 calculated by multiplying the aggre20 gate worldwide number of shares of 

21 the common equity securities of an 

22 issuer that are held by non-affiliates 

23 by the price at which those securities 

24 were last sold (or the average bid and 


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1 asked prices of those securities) in the 

2 principal market for those securities. 

3 ‘‘(II) CALCULATION OF ZERO.— 

4 If a public float calculation under sub5 clause (I) with respect to an issuer is 

6 zero, an exemption under subpara7 graph (A) shall be unconditional for 

8 securities offered by the issuer if the 

9 issuer had annual revenues of less 

10 than $50,000,000, as of the most re11 cently completed fiscal year of the 

12 issuer.’’. 

13 SEC. 4. RULE OF CONSTRUCTION. 

14 Nothing in this Act or the amendments made by this 

15 Act may be construed to allow an issuer or a crowdfunding 

16 vehicle to offer or sell securities in excess of the limitation 

17 described under section 4(a)(6) of the Securities Act of 

18 1933 (15 U.S.C. 77d(a)(6)). 

19 SEC. 5. DETERMINATION OF BUDGETARY EFFECTS. 

20 The budgetary effects of this Act, for the purpose of 

21 complying with the Statutory Pay-As-You-Go Act of 2010, 

22 shall be determined by reference to the latest statement 

23 titled ‘‘Budgetary Effects of PAYGO Legislation’’ for this 

24 Act, submitted for printing in the Congressional Record 

25 by the Chairman of the House Budget Committee, proVerDate Sep 11 2014 00:45 Oct 30, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H4860.RFS H4860

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1 vided that such statement has been submitted prior to the 

2 vote on passage. 

Passed the House of Representatives October 28, 

2019. 

Attest: CHERYL L. JOHNSON, 

Clerk. 


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