I 

114TH CONGRESS 

2D SESSION H. R. 4498 

To clarify the definition of general solicitation under Federal securities law. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 9, 2016 

Mr. CHABOT (for himself, Ms. SINEMA, Mr. HURT of Virginia, and Mr. 

TAKAI) introduced the following bill; which was referred to the Committee 

on Financial Services 

A BILL 

To clarify the definition of general solicitation under Federal 

securities law. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Helping Angels Lead 

5 Our Startups Act’’ or the ‘‘HALOS Act’’. 

6 SEC. 2. DEFINITION OF ANGEL INVESTOR GROUP. 

7 As used in this Act, the term ‘‘angel investor group’’ 

8 means any group that— 


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1 (1) is composed of accredited investors inter2 ested in investing personal capital in early-stage 

3 companies; 

4 (2) holds regular meetings and has defined 

5 processes and procedures for making investment de6 cisions, either individually or among the membership 

7 of the group as a whole; and 

8 (3) is neither associated nor affiliated with bro9 kers, dealers, or investment advisers. 

10 SEC. 3. CLARIFICATION OF GENERAL SOLICITATION. 

11 (a) IN GENERAL.—Not later than 6 months after the 

12 date of enactment of this Act, the Securities and Ex13 change Commission shall revise Regulation D of its rules 

14 (17 C.F.R. 230.500 et seq.) to require that in carrying 

15 out the prohibition against general solicitation or general 

16 advertising contained in section 230.502(c) of title 17, 

17 Code of Federal Regulations, the prohibition shall not 

18 apply to a presentation or other communication made by 

19 or on behalf of an issuer which is made at an event— 

20 (1) sponsored by— 

21 (A) the United States or any territory 

22 thereof, by the District of Columbia, by any 

23 State, by a political subdivision of any State or 

24 territory, or by any agency or public instrumen25 tality of any of the foregoing; 


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1 (B) a college, university, or other institu2 tion of higher education; 

3 (C) a nonprofit organization; 

4 (D) an angel investor group; 

5 (E) a venture forum, venture capital asso6 ciation, or trade association; or 

7 (F) any other group, person or entity as 

8 the Securities and Exchange Commission may 

9 determine by rule; 

10 (2) where any advertising for the event does not 

11 reference any specific offering of securities by the 

12 issuer; 

13 (3) the sponsor of which— 

14 (A) does not make investment rec15 ommendations or provide investment advice to 

16 event attendees; 

17 (B) does not engage in an active role in 

18 any investment negotiations between the issuer 

19 and investors attending the event; 

20 (C) does not charge event attendees any 

21 fees other than administrative fees; and 

22 (D) does not receive any compensation 

23 with respect to such event that would require 

24 registration of the sponsor as a broker or a 

25 dealer under the Securities Exchange Act of 


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1 1934, or as an investment advisor under the In2 vestment Advisers Act of 1940; and 

3 (4) where no specific information regarding an 

4 offering of securities by the issuer is communicated 

5 or distributed by or on behalf of the issuer, other 

6 than— 

7 (A) that the issuer is in the process of of8 fering securities or planning to offer securities; 

9 (B) the type and amount of securities 

10 being offered; 

11 (C) the amount of securities being offered 

12 that have already been subscribed for; and 

13 (D) the intended use of proceeds of the of14 fering. 

15 (b) RULE OF CONSTRUCTION.—Subsection (a) may 

16 only be construed as requiring the Securities and Ex17 change Commission to amend the requirements of Regula18 tion D with respect to presentations and communications, 

19 and not with respect to purchases or sales. 

Æ 


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