II 

117TH CONGRESS 

2D SESSION S. 3922 

To amend the Securities Exchange Act of 1934 to create a safe harbor 

for finders and private placement brokers, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 24, 2022 

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

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To amend the Securities Exchange Act of 1934 to create 

a safe harbor for finders and private placement brokers, 

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 ‘‘Unlocking Capital for 

5 Small Businesses Act of 2022’’. 

6 SEC. 2. SAFE HARBORS FOR PRIVATE PLACEMENT BRO7 KERS AND FINDERS. 

8 (a) IN GENERAL.—Section 15 of the Securities Ex9 change Act of 1934 (15 U.S.C. 78o) is amended by adding 

10 at the end the following: 


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1 ‘‘(p) PRIVATE PLACEMENT BROKER SAFE HAR2 BOR.— 

3 ‘‘(1) REGISTRATION REQUIREMENTS.—Not 

4 later than 270 days after the date of the enactment 

5 of this subsection the Commission shall promulgate 

6 regulations with respect to private placement brokers 

7 that are no more stringent than those imposed on 

8 funding portals. Not later than 270 days after the 

9 publication of the proposed regulations in the Fed10 eral Register, the Commission shall promulgate final 

11 rules. 

12 ‘‘(2) NATIONAL SECURITIES ASSOCIATIONS.— 

13 Not later than 270 days after the date of the enact14 ment of this subsection the Commission shall pro15 mulgate regulations that require the rules of any na16 tional securities association to allow a private place17 ment broker to become a member of such national 

18 securities association subject to reduced membership 

19 requirements consistent with this subsection. Not 

20 later than 270 days after the publication of the pro21 posed regulations in the Federal Register, the Com22 mission shall promulgate final rules. 

23 ‘‘(3) DISCLOSURES REQUIRED.—Before the 

24 consummation of a transaction effecting a private 

25 placement, a private placement broker shall disclose 


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1 clearly and conspicuously, in writing, to all parties 

2 to the transaction as a result of the broker’s activi3 ties— 

4 ‘‘(A) that the broker is acting as a private 

5 placement broker; 

6 ‘‘(B) the amount of any compensation or 

7 anticipated compensation for services rendered 

8 as a private placement broker in connection 

9 with such transaction; 

10 ‘‘(C) the person to whom any such com11 pensation is made; and 

12 ‘‘(D) any beneficial interest in the issuer, 

13 direct or indirect, of the private placement 

14 broker, of a member of the immediate family of 

15 the private placement broker, of an associated 

16 person of the private placement broker, or of a 

17 member of the immediate family of such associ18 ated person. 

19 ‘‘(4) PRIVATE PLACEMENT BROKER DE20 FINED.—In this subsection, the term ‘private place21 ment broker’ means a person that— 

22 ‘‘(A) receives transaction-based compensa23 tion— 

24 ‘‘(i) for effecting a transaction by— 


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1 ‘‘(I) introducing an issuer of se2 curities and a buyer of such securities 

3 in connection with the sale of a busi4 ness effected as the sale of securities; 

5 or 

6 ‘‘(II) introducing an issuer of se7 curities and a buyer of such securities 

8 in connection with the placement of 

9 securities in transactions that are ex10 empt from registration requirements 

11 under the Securities Act of 1933; and 

12 ‘‘(ii) that is not with respect to— 

13 ‘‘(I) a class of publicly traded se14 curities; 

15 ‘‘(II) the securities of an invest16 ment company (as defined in section 3 

17 of the Investment Company Act of 

18 1940); or 

19 ‘‘(III) a variable or equity-in20 dexed annuity or other variable or eq21 uity-indexed life insurance product; 

22 ‘‘(B) with respect to a transaction for 

23 which such transaction-based compensation is 

24 received— 


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1 ‘‘(i) does not handle or take posses2 sion of the funds or securities; and 

3 ‘‘(ii) does not engage in an activity 

4 that requires registration as an investment 

5 adviser under State or Federal law; and 

6 ‘‘(C) is not a finder as defined under sub7 section (q). 

8 ‘‘(q) FINDER SAFE HARBOR.— 

9 ‘‘(1) NONREGISTRATION.—A finder is exempt 

10 from the registration requirements of this Act. 

11 ‘‘(2) NATIONAL SECURITIES ASSOCIATIONS.—A 

12 finder shall not be required to become a member of 

13 any national securities association. 

14 ‘‘(3) FINDER DEFINED.—In this subsection, the 

15 term ‘finder’ means a person described in para16 graphs (A) and (B) of subsection (p)(4) that— 

17 ‘‘(A) receives transaction-based compensa18 tion of equal to or less than $500,000 in any 

19 calendar year; 

20 ‘‘(B) receives transaction-based compensa21 tion in connection with transactions that result 

22 in a single issuer selling securities valued at 

23 equal to or less than $15,000,000 in any cal24 endar year; 


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1 ‘‘(C) receives transaction-based compensa2 tion in connection with transactions that result 

3 in any combination of issuers selling securities 

4 valued at equal to or less than $30,000,000 in 

5 any calendar year; or 

6 ‘‘(D) receives transaction-based compensa7 tion in connection with fewer than 16 trans8 actions that are not part of the same offering 

9 or are otherwise unrelated in any calendar year. 

10 ‘‘(4) ADJUSTMENT FOR INFLATION.—The 

11 amounts described in paragraph (3) shall be in12 creased each year by an amount equal to the per13 centage increase, if any, in the Consumer Price 

14 Index, as determined by the Department of Labor or 

15 its successor.’’. 

16 (b) VALIDITY OF CONTRACTS WITH REGISTERED

17 PRIVATE PLACEMENT BROKERS AND FINDERS.—Section 

18 29 of the Securities Exchange Act (15 U.S.C. 78cc) is 

19 amended by adding at the end the following: 

20 ‘‘(d) Subsection (b) shall not apply to a contract 

21 made for a transaction if— 

22 ‘‘(1) the transaction is one in which the issuer 

23 engaged the services of a broker or dealer that is not 

24 registered under this Act with respect to such trans25 action; 


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1 ‘‘(2) such issuer received a self-certification 

2 from such broker or dealer certifying that such 

3 broker or dealer is a registered private placement 

4 broker under section 15(p) or a finder under section 

5 15(q); and 

6 ‘‘(3) the issuer either did not know that such 

7 self-certification was false or did not have a reason8 able basis to believe that such self-certification was 

9 false.’’. 

10 (c) REMOVAL OF PRIVATE PLACEMENT BROKERS

11 FROM DEFINITIONS OF BROKER.— 

12 (1) RECORDS AND REPORTS ON MONETARY IN13 STRUMENTS TRANSACTIONS.—Section 5312 of title 

14 31, United States Code, is amended in subsection 

15 (a)(2)(G) by inserting ‘‘with the exception of a pri16 vate placement broker as defined in section 15(p)(4) 

17 of the Securities Exchange Act of 1934 (15 U.S.C. 

18 78o(p)(4))’’ before the semicolon at the end. 

19 (2) SECURITIES EXCHANGE ACT OF 1934.—Sec20 tion 3(a)(4) of the Securities Exchange Act of 1934 

21 (15 U.S.C. 78c(a)(4)) is amended by adding at the 

22 end the following: 

23 ‘‘(G) PRIVATE PLACEMENT BROKERS.—A 

24 private placement broker as defined in section 


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1 15(p)(4) is not a broker for the purposes of this 

2 Act.’’. 

3 SEC. 3. LIMITATIONS ON STATE LAW. 

4 Section 15(i) of the Securities Exchange Act of 1934 

5 (15 U.S.C. 78o(i)) is amended— 

6 (1) by redesignating paragraph (3) as para7 graph (4); and 

8 (2) by inserting after paragraph (2) the fol9 lowing: 

10 ‘‘(3) PRIVATE PLACEMENT BROKERS AND FIND11 ERS.— 

12 ‘‘(A) IN GENERAL.—No State or political 

13 subdivision thereof may enforce any law, rule, 

14 regulation, or other administrative action that 

15 imposes greater registration, audit, financial 

16 recordkeeping, or reporting requirements on a 

17 private placement broker or finder than those 

18 that are required under subsections (p) and (q), 

19 respectively. 

20 ‘‘(B) DEFINITION OF STATE.—For pur21 poses of this paragraph, the term ‘State’ in22 cludes the District of Columbia and each terri23 tory of the United States.’’. 

Æ 


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