Improving Crowdfunding Opportunities Act

To amend the Securities Act of 1933 to preempt State securities law requiring registration for secondary transactions, and for other purposes. 1. Short title This Act may be cited as the Improving Crowdfunding Opportunities Act 2. Crowdfunding revisions (a) Exemption from State regulation Section 18(b)(4)(A) of the Securities Act of 1933 ( 15 U.S.C. 77r(b)(4)(A) pursuant to section (i) section 13 or 15(d) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78m (ii) section 4A(b) or any regulation issued under that section; . (b) Liability for material misstatements and omissions Section 4A(c) of the Securities Act of 1933 ( 15 U.S.C. 77d–1(c) (1) by redesignating paragraph (3) as paragraph (4); and (2) by inserting after paragraph (2) the following: (3) Liability of funding portals For the purposes of this subsection, a funding portal, as that term is defined in section 3(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c(a) (A) makes any untrue statement of a material fact or omits to state a material fact in order to make the statements made, in light of the circumstances under which they are made, not misleading; or (B) engages in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person. . (c) Applicability of Bank Secrecy Act requirements (1) Securities Act of 1933 Section 4A(a) of the Securities Act of 1933 ( 15 U.S.C. 77d–1(a) (A) in paragraph (11), by striking and (B) in paragraph (12), by striking the period at the end and inserting ; and (C) by adding at the end the following: (13) not be subject to the recordkeeping and reporting requirements relating to monetary instruments under subchapter II of chapter 53 . (2) Title 31, United States Code Section 5312 of title 31, United States Code, is amended by striking subsection (c) and inserting the following: (c) Additional clarification The term financial institution (1) includes any futures commission merchant, commodity trading advisor, or commodity pool operator registered, or required to register, under the Commodity Exchange Act ( 7 U.S.C. 1 et seq. (2) does not include a funding portal, as that term is defined in section 3(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c(a) . (d) Provision of impersonal investment advice and recommendations Section 3(a) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c(a) (1) by redesignating the second paragraph (80) (relating to funding portals) as paragraph (81); and (2) in paragraph (81)(A), as so redesignated, by inserting after recommendations (other than by providing impersonal investment advice by means of written material, or an oral statement, that does not purport to meet the objectives or needs of a specific individual or account) (e) Target amounts of certain exempted offerings The Securities and Exchange Commission shall amend paragraph (t)(1) of section 227.201 of title 17, Code of Federal Regulations so that such paragraph applies with respect to an issuer offering or selling securities in reliance on section 4(a)(6) of the Securities Act of 1933 ( 15 U.S.C. 77d(a)(6) (1) the offerings of such issuer, together with all other amounts sold under such section 4(a)(6) within the preceding 12-month period, have, in the aggregate, a target amount of more than $124,000 but not more than $250,000; (2) the financial statements of such issuer that have either been reviewed or audited by a public accountant that is independent of the issuer are unavailable at the time of filing; and (3) such issuer provides a statement that financial information certified by the principal executive officer of the issuer has been provided instead of financial statements reviewed by a public accountant that is independent of the issuer. (f) Exemption available to investment companies Section 4A(f) of the Securities Act of 1933 ( 15 U.S.C. 77d–1(f) (1) in paragraph (2), by inserting or (2) by striking paragraph (3); and (3) by redesignating paragraph (4) as paragraph (3). (g) Non-Accredited investor requirements Section 4(a)(6) of the Securities Act of 1933 ( 15 U.S.C. 77d(a)(6) (1) in subparagraph (A), by striking $1,000,000 $10,000,000 (2) in subparagraph (B), by striking does not exceed more than $100,000 does not exceed 10 percent of the annual income or net worth of such investor (h) Technical correction The Securities Act of 1933 ( 15 U.S.C. 77a et seq. (1) by striking the term section 4(6) section 4(a)(6) (2) by striking the term section 4(6)(B) section 4(a)(6)(B)

Summary: Improving Crowdfunding Opportunities Act This bill reduces regulations applicable to crowdfunding securities and portals. Crowdfunding is used to raise capital through a large number of individuals investing potentially small amounts of money. The bill exempts certain securities issued under crowdfunding regulations from state regulation of secondary transactions. It also exempts crowdfunding portals from (1) certain anti-money laundering reporting and recordkeeping requirements, and (2) liability for material misstatements or omissions unless the portal knowingly makes certain untrue statements or engages in fraud or deceit. The bill revises the disclosure requirements for crowdfunding issuers with specified target offering amounts. The bill also expands the types of investors allowed to invest in these companies to include investment companies. Finally, the bill increases the aggregate amount these companies are allowed to raise in a 12-month period and generally raises the amount individuals are allowed to invest in a 12-month period.