II 

115TH CONGRESS 

1ST SESSION S. 1031 

To amend provisions in the securities laws relating to regulation crowdfunding 

to raise the dollar amount limit and to clarify certain requirements 

and exclusions for funding portals established by such Act. 

IN THE SENATE OF THE UNITED STATES 

MAY 3, 2017 

Mr. DAINES introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To amend provisions in the securities laws relating to regulation crowdfunding to raise the dollar amount limit and 

to clarify certain requirements and exclusions for funding 

portals established by such Act. 

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 ‘‘Crowdfunding En5 hancement Act’’. 


SSpencer on DSK4SPTVN1PROD with BILLS
2 

•S 1031 IS

1 SEC. 2. CROWDFUNDING VEHICLES. 

2 (a) AMENDMENTS TO THE SECURITIES ACT OF

3 1933.—The Securities Act of 1933 (15 U.S.C. 77a et 

4 seq.) is amended— 

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

6 by inserting ‘‘by any of paragraphs (1) through (14) 

7 of’’ before ‘‘section 3(c)’’; and 

8 (2) in section 4(a)(6)(B) (15 U.S.C. 

9 77d(a)(6)(B)), by inserting ‘‘, other than a 

10 crowdfunding vehicle (as defined in section 2(a) of 

11 the Investment Company Act of 1940 (15 U.S.C. 

12 80a–2(a))),’’ after ‘‘any investor’’. 

13 (b) AMENDMENTS TO THE INVESTMENT COMPANY

14 ACT OF 1940.—The Investment Company Act of 1940 (15 

15 U.S.C. 80a–1 et seq.) is amended— 

16 (1) in section 2(a) (15 U.S.C. 80a–2(a)), by 

17 adding at the end the following: 

18 ‘‘(55) The term ‘crowdfunding vehicle’ means a 

19 company— 

20 ‘‘(A) whose purpose (as set forth in its or21 ganizational documents) is limited to acquiring, 

22 holding, and disposing securities issued by a 

23 single company in one or more transactions and 

24 made pursuant to section 4(a)(6) of the Securi25 ties Act of 1933 (15 U.S.C. 77d(a)(6)); 

26 ‘‘(B) that issues only 1 class of securities; 


SSpencer on DSK4SPTVN1PROD with BILLS
3 

•S 1031 IS

1 ‘‘(C) that receives no compensation in con2 nection with such acquisition, holding, or dis3 position of securities; 

4 ‘‘(D) no associated person of which re5 ceives any compensation in connection with 

6 such acquisition, holding or disposition of secu7 rities unless such person is acting as or on be8 half of an investment adviser registered under 

9 the Investment Advisers Act of 1940 (15 

10 U.S.C. 80b–1 et seq.) or registered as an in11 vestment adviser in the State in which the in12 vestment adviser maintains its principal office 

13 and place of business; 

14 ‘‘(E) the securities of which have been 

15 issued in a transaction made pursuant to sec16 tion 4(a)(6) of the Securities Act of 1933 (15 

17 U.S.C. 77d(a)(6)), if both the crowdfunding ve18 hicle and the company whose securities it holds 

19 are co-issuers; 

20 ‘‘(F) that is current in its ongoing disclo21 sure obligations under section 227.202 of title 

22 17, Code of Federal Regulations; 

23 ‘‘(G) the company whose securities it holds 

24 is current in its ongoing disclosure obligations 


SSpencer on DSK4SPTVN1PROD with BILLS
4 

•S 1031 IS

1 under section 227.202 of title 17, Code of Fed2 eral Regulations; and 

3 ‘‘(H) is advised by an investment adviser 

4 registered under the Investment Advisers Act of 

5 1940 (15 U.S.C. 80b–1 et seq.) or registered as 

6 an investment adviser in the State in which the 

7 investment adviser maintains its principal office 

8 and place of business.’’; and 

9 (2) in section 3(c) (15 U.S.C. 80a–3(c)), by 

10 adding at the end the following: 

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

12 SEC. 3. CROWDFUNDING EXEMPTION FROM REGISTRA13 TION. 

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

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

16 (1) by striking ‘‘The Commission’’ and insert17 ing the following: 

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

19 (2) by striking ‘‘section 4(6)’’ and inserting 

20 ‘‘section 4(a)(6)’’; and 

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

22 ‘‘(B) TREATMENT OF SECURITIES ISSUED

23 BY CERTAIN ISSUERS.—An exemption under 

24 subparagraph (A) shall be unconditional for se25 curities offered by an issuer that had a public 


SSpencer on DSK4SPTVN1PROD with BILLS
5 

•S 1031 IS

1 float of less than $75,000,000 as of the last 

2 business day of the issuer’s most recently com3 pleted semiannual period, computed by multi4 plying the aggregate worldwide number of 

5 shares of the issuer’s common equity securities 

6 held by non-affiliates by the price at which such 

7 securities were last sold (or the average bid and 

8 asked prices of such securities) in the principal 

9 market for such securities or, in the event the 

10 result of such public float calculation is zero, 

11 had annual revenues of less than $50,000,000 

12 as of the issuer’s most recently completed fiscal 

13 year.’’. 

Æ 


SSpencer on DSK4SPTVN1PROD with BILLS