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Union Calendar No. 213 

114TH CONGRESS 

1ST SESSION H. R. 1839 

[Report No. 114–281] 

To amend the Securities Act of 1933 to exempt certain transactions involving 

purchases by accredited investors, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 16, 2015 

Mr. MCHENRY introduced the following bill; which was referred to the 

Committee on Financial Services 

OCTOBER 6, 2015 

Additional sponsor: Mr. SCHWEIKERT

OCTOBER 6, 2015 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on April 16, 2015] 


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A BILL 

To amend the Securities Act of 1933 to exempt certain 

transactions involving purchases by accredited investors, 

and for other purposes. 


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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 ‘‘Reforming Access for 

5 Investments in Startup Enterprises Act of 2015’’ or the 

6 ‘‘RAISE Act of 2015’’. 

7 SEC. 2. EXEMPTED TRANSACTIONS. 

8 (a) EXEMPTED TRANSACTIONS.—Section 4 of the Se9 curities Act of 1933 (15 U.S.C. 77d) is amended— 

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

11 following new paragraph: 

12 ‘‘(7) transactions meeting the requirements of 

13 subsection (d).’’; 

14 (2) by redesignating the second subsection (b) 

15 (relating to securities offered and sold in compliance 

16 with Rule 506 of Regulation D) as subsection (c); and 

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

18 ‘‘(d) CERTAIN ACCREDITED INVESTOR TRANS19 ACTIONS.—The transactions referred to in subsection (a)(7) 

20 are transactions meeting the following requirements: 

21 ‘‘(1) ACCREDITED INVESTOR REQUIREMENT.— 

22 Each purchaser is an accredited investor, as that 

23 term is defined in section 230.501(a) of title 17, Code 

24 of Federal Regulations (or any successor regulation). 


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1 ‘‘(2) PROHIBITION ON GENERAL SOLICITATION

2 OR ADVERTISING.—Neither the seller, nor any person 

3 acting on the seller’s behalf, offers or sells securities by 

4 any form of general solicitation or general adver5 tising. 

6 ‘‘(3) INFORMATION REQUIREMENT.—In the case 

7 of a transaction involving the securities of an issuer 

8 that is neither subject to section 13 or 15(d) of the Se9 curities Exchange Act of 1934 (15 U.S.C. 78m; 

10 78o(d)), nor exempt from reporting pursuant to sec11 tion 240.12g3-2(b) of title 17, Code of Federal Regula12 tions, nor a foreign government (as defined in section 

13 230.405 of title 17, Code of Federal Regulations) eligi14 ble to register securities under Schedule B, the seller 

15 and a prospective purchaser designated by the seller 

16 obtain from the issuer, upon request of the seller, and 

17 the seller in all cases makes available to a prospective 

18 purchaser, the following information (which shall be 

19 reasonably current in relation to the date of resale 

20 under this section): 

21 ‘‘(A) The exact name of the issuer and the 

22 issuer’s predecessor (if any). 

23 ‘‘(B) The address of the issuer’s principal 

24 executive offices. 


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1 ‘‘(C) The exact title and class of the secu2 rity. 

3 ‘‘(D) The par or stated value of the security. 

4 ‘‘(E) The number of shares or total amount 

5 of the securities outstanding as of the end of the 

6 issuer’s most recent fiscal year. 

7 ‘‘(F) The name and address of the transfer 

8 agent, corporate secretary, or other person re9 sponsible for transferring shares and stock cer10 tificates. 

11 ‘‘(G) A statement of the nature of the busi12 ness of the issuer and the products and services 

13 it offers, which shall be presumed reasonably cur14 rent if the statement is as of 12 months before 

15 the transaction date. 

16 ‘‘(H) The names of the officers and directors 

17 of the issuer. 

18 ‘‘(I) The names of any persons registered as 

19 a broker, dealer, or agent that shall be paid or 

20 given, directly or indirectly, any commission or 

21 remuneration for such person’s participation in 

22 the offer or sale of the securities. 

23 ‘‘(J) The issuer’s most recent balance sheet 

24 and profit and loss statement and similar finan25 cial statements, which shall— 


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1 ‘‘(i) be for such part of the two pre2 ceding fiscal years as the issuer has been in 

3 operation; 

4 ‘‘(ii) be prepared in accordance with 

5 generally accepted accounting principles or, 

6 in the case of a foreign private issuer, be 

7 prepared in accordance with generally ac8 cepted accounting principles or the Inter9 national Financial Reporting Standards 

10 issued by the International Accounting 

11 Standards Board; 

12 ‘‘(iii) be presumed reasonably current 

13 if— 

14 ‘‘(I) with respect to the balance 

15 sheet, the balance sheet is as of a date 

16 less than 16 months before the trans17 action date; and 

18 ‘‘(II) with respect to the profit 

19 and loss statement, such statement is 

20 for the 12 months preceding the date of 

21 the issuer’s balance sheet; and 

22 ‘‘(iv) if the balance sheet is not as of 

23 a date less than 6 months before the trans24 action date, be accompanied by additional 

25 statements of profit and loss for the period 


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1 from the date of such balance sheet to a date 

2 less than 6 months before the transaction 

3 date. 

4 ‘‘(K) To the extent that the seller is a con5 trol person with respect to the issuer, a brief 

6 statement regarding the nature of the affiliation, 

7 and a statement certified by such seller that they 

8 have no reasonable grounds to believe that the 

9 issuer is in violation of the securities laws or 

10 regulations. 

11 ‘‘(4) ISSUERS DISQUALIFIED.—The transaction 

12 is not for the sale of a security where the seller is an 

13 issuer or a subsidiary, either directly or indirectly, of 

14 the issuer. 

15 ‘‘(5) BAD ACTOR PROHIBITION.—Neither the sell16 er, nor any person that has been or will be paid (di17 rectly or indirectly) remuneration or a commission 

18 for their participation in the offer or sale of the secu19 rities, including solicitation of purchasers for the sell20 er is subject to an event that would disqualify an 

21 issuer or other covered person under Rule 506(d)(1) 

22 of Regulation D (17 C.F.R. 230.506(d)(1)) or is sub23 ject to a statutory disqualification described under 

24 section 3(a)(39) of the Securities Exchange Act of 

25 1934. 


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1 ‘‘(6) BUSINESS REQUIREMENT.—The issuer is 

2 engaged in business, is not in the organizational stage 

3 or in bankruptcy or receivership, and is not a blank 

4 check, blind pool, or shell company that has no spe5 cific business plan or purpose or has indicated that 

6 the issuer’s primary business plan is to engage in a 

7 merger or combination of the business with, or an ac8 quisition of, an unidentified person. 

9 ‘‘(7) UNDERWRITER PROHIBITION.—The trans10 action is not with respect to a security that con11 stitutes the whole or part of an unsold allotment to, 

12 or a subscription or participation by, a broker or 

13 dealer as an underwriter of the security or a redis14 tribution. 

15 ‘‘(8) OUTSTANDING CLASS REQUIREMENT.—The 

16 transaction is with respect to a security of a class 

17 that has been authorized and outstanding for at least 

18 90 days prior to the date of the transaction. 

19 ‘‘(e) ADDITIONAL REQUIREMENTS.— 

20 ‘‘(1) IN GENERAL.—With respect to an exempted 

21 transaction described under subsection (a)(7): 

22 ‘‘(A) Securities acquired in such trans23 action shall be deemed to have been acquired in 

24 a transaction not involving any public offering. 


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1 ‘‘(B) Such transaction shall be deemed not 

2 to be a distribution for purposes of section 

3 2(a)(11). 

4 ‘‘(C) Securities involved in such transaction 

5 shall be deemed to be restricted securities within 

6 the meaning of Rule 144 (17 C.F.R. 230.144). 

7 ‘‘(2) RULE OF CONSTRUCTION.—The exemption 

8 provided by subsection (a)(7) shall not be the exclu9 sive means for establishing an exemption from the 

10 registration requirements of section 5.’’. 

11 (b) EXEMPTION IN CONNECTION WITH CERTAIN EX12 EMPT OFFERINGS.—Section 18(b)(4) of the Securities Act 

13 of 1933 (15 U.S.C. 77r(b)(4)) is amended— 

14 (1) by redesignating the second subparagraph 

15 (D) and subparagraph (E) as subparagraphs (E) and 

16 (F), respectively; 

17 (2) in subparagraph (E), as so redesignated, by 

18 striking ‘‘; or’’ and inserting a semicolon; 

19 (3) in subparagraph (F), as so redesignated, by 

20 striking the period and inserting ‘‘; or’’; and 

21 (4) by adding at the end the following new sub22 paragraph: 

23 ‘‘(G) section 4(a)(7).’’. 


emcdonald on DSK67QTVN1PROD with BILLS
Union Calendar No. 213 

114TH CONGRESS 

1ST SESSION H. R. 1839 

[Report No. 114–281] 

A BILL 

To amend the Securities Act of 1933 to exempt 

credited investors, and for other purposes. certain transactions involving purchases by acOCTOBER 6, 2015 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union, 


emcdonald on DSK67QTVN1PROD with BILLS