I 

115TH CONGRESS 

2D SESSION H. R. 4971 

To amend the Securities Act of 1933 to exempt from registration with 

the Securities and Exchange Commission certain accredited investor 

transactions within transparent secondary markets, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 7, 2018 

Mr. MOONEY of West Virginia (for himself and Mr. MACARTHUR) introduced 

the following bill; which was referred to the Committee on Financial Services 

A BILL 

To amend the Securities Act of 1933 to exempt from registration with the Securities and Exchange Commission 

certain accredited investor transactions within transparent secondary markets, 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, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘IPO Pipeline Act’’. 


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1 SEC. 2. EXEMPTION FOR CERTAIN ACCREDITED INVESTOR 

2 TRANSACTIONS WITHIN TRANSPARENT SEC3 ONDARY MARKETS. 

4 (a) EXEMPTED TRANSACTIONS.—Section 4 of the Se5 curities Act of 1933 (15 U.S.C. 77d) is amended— 

6 (1) in subsection (a), by adding at the end the 

7 following new paragraph: 

8 ‘‘(8) transactions meeting the requirements of 

9 subsection (e).’’; 

10 (2) by redesignating subsection (e) as sub11 section (f); and 

12 (3) by inserting after subsection (d) the fol13 lowing new subsection: 

14 ‘‘(e) ACCREDITED INVESTOR TRANSACTIONS WITHIN

15 TRANSPARENT SECONDARY MARKETS.— 

16 ‘‘(1) IN GENERAL.—A transaction referred to in 

17 subsection (a)(8) is a transaction that meets the fol18 lowing requirements: 

19 ‘‘(A) ACCREDITED INVESTOR REQUIRE20 MENT.—Each transaction participant is an ac21 credited investor, an affiliate of the issuer, or 

22 an employee of the issuer. 

23 ‘‘(B) SECONDARY MARKETPLACE RULES.— 

24 ‘‘(i) IN GENERAL.—In the case of a 

25 transaction described under clause (ii)— 


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1 ‘‘(I) neither the seller nor the 

2 purchaser of the security is the issuer 

3 or an underwriter of the security; 

4 ‘‘(II) affiliates of the issuer are 

5 restricted from executing against or6 ders posted on a marketplace by other 

7 market participants; and 

8 ‘‘(III) an affiliate of the issuer 

9 that posts an order to offer to buy or 

10 sell the security on a secondary mar11 ketplace must disclose within the post12 ed order that they are an affiliate and 

13 whether the affiliate status is as an 

14 officer, director, beneficial owner, or 

15 other basis, and the posted order 

16 must clearly reflect these disclosures. 

17 ‘‘(ii) TRANSACTION.—The transaction 

18 referred to in clause (i) is one involving the 

19 securities of an issuer that— 

20 ‘‘(I) is not— 

21 ‘‘(aa) subject to section 13 

22 or 15(d) of the Securities Ex23 change Act of 1934 (15 U.S.C. 

24 78m; 78o(d)); 


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1 ‘‘(bb) exempt from reporting 

2 pursuant to section 240.12g3– 

3 2(b) of title 17, Code of Federal 

4 Regulations; or 

5 ‘‘(cc) a foreign government 

6 (as defined in section 230.405 of 

7 title 17, Code of Federal Regula8 tions) eligible to register securi9 ties under Schedule B of section 

10 77aa; and 

11 ‘‘(II) irrevocably reported to the 

12 Commission using Form D, or an ad13 dendum to Form D, under section 

14 239.500 of title 17, Code of Federal 

15 Regulations (or any successor regula16 tion), that the issuer will register 

17 under section 12 of the Securities Ex18 change Act of 1934 within one year of 

19 attaining $250,000,000 in annual rev20 enue as measured under generally ac21 cepted accounting principles. 

22 ‘‘(C) DEFINITION OF AFFILIATE OF THE

23 ISSUER.—In this subsection, the term ‘affiliate 

24 of the issuer’ has the meaning given such term 

25 in section 230.144(a)(1) of title 17, Code of 


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1 Federal Regulations (or any successor regula2 tion).’’; and 

3 (4) in subsection (f), as so redesignated, by 

4 striking ‘‘subsection (a)(7)’’ each place such term 

5 appears and inserting ‘‘paragraph (7) or (8) of sub6 section (a)’’. 

7 (b) EXEMPTION FROM REGISTRATION.—Section 

8 12(g)(2) of the Securities Exchange Act of 1934 (15 

9 U.S.C. 78l(g)(2)) is amended by adding at the end the 

10 following: 

11 ‘‘(I) any security of an issuer where the issuer 

12 irrevocably reported to the Commission using Form 

13 D, or an addendum to Form D, under section 

14 239.500 of title 17, Code of Federal Regulations (or 

15 any successor regulation), that the issuer will reg16 ister under section 12 within one year of attaining 

17 $250,000,000 in annual revenue as measured under 

18 generally accepted accounting principles.’’. 

19 (c) DIRECTED RULEMAKING.—Not later than 90 

20 days after the date of the enactment of this Act, the Secu21 rities and Exchange Commission shall promulgate any 

22 regulations necessary to revise Form D and section 

23 239.500 of title 17, Code of Federal Regulations, to meet 

24 the purposes of the amendments made by this Act. 

Æ 


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