HR 3606 PCS
annual change in the Consumer Price 
Index for All Urban Consumers published 
by the Bureau of Labor Statistics, or less; 
or 
‘‘(ii) if the issuer provides potential 
investors with audited financial statements, 
$2,000,000, as such amount is adjusted by 
the Commission to reflect the annual 
change in the Consumer Price Index for 
All Urban Consumers published by the Bu-
reau of Labor Statistics, or less; 
‘‘(B) the aggregate amount sold to any in-
vestor in reliance on this exemption within the 
previous 12-month period does not exceed the 
lesser of— 
‘‘(i) $10,000, as such amount is ad-
justed by the Commission to reflect the an-
nual change in the Consumer Price Index 
for All Urban Consumers published by the 
Bureau of Labor Statistics; and 
‘‘(ii) 10 percent of such investor’s an-
nual income; 
‘‘(C) in the case of a transaction involving 
an intermediary between the issuer and the in-
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HR 3606 PCS
vestor, such intermediary complies with the re-
quirements under section 4A(a); and 
‘‘(D) in the case of a transaction not in-
volving an intermediary between the issuer and 
the investor, the issuer complies with the re-
quirements under section 4A(b).’’. 
(b) 
REQUIREMENTS
TO
QUALIFY
FOR 
CROWDFUNDING EXEMPTION.—The Securities Act of 
1933 is amended by inserting after section 4 the following: 
‘‘SEC. 4A. REQUIREMENTS WITH RESPECT TO CERTAIN 
SMALL TRANSACTIONS. 
‘‘(a) REQUIREMENTS
ON
INTERMEDIARIES.—For 
purposes of section 4(6), a person acting as an inter-
mediary in a transaction involving the offer or sale of secu-
rities shall comply with the requirements of this subsection 
if the intermediary— 
‘‘(1) 
warns 
investors, 
including 
on 
the 
intermediary’s website used for the offer and sale of 
such securities, of the speculative nature generally 
applicable to investments in startups, emerging busi-
nesses, and small issuers, including risks in the sec-
ondary market related to illiquidity; 
‘‘(2) warns investors that they are subject to 
the restriction on sales requirement described under 
subsection (e); 
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‘‘(3) takes reasonable measures to reduce the 
risk of fraud with respect to such transaction; 
‘‘(4) 
provides 
the 
Commission 
with 
the 
intermediary’s physical address, website address, 
and the names of the intermediary and employees of 
the intermediary, and keep such information up-to- 
date; 
‘‘(5) provides the Commission with continuous 
investor-level access to the intermediary’s website; 
‘‘(6) requires each potential investor to answer 
questions demonstrating— 
‘‘(A) an understanding of the level of risk 
generally applicable to investments in startups, 
emerging businesses, and small issuers; 
‘‘(B) an understanding of the risk of 
illiquidity; and 
‘‘(C) such other areas as the Commission 
may determine appropriate by rule or regula-
tion; 
‘‘(7) requires the issuer to state a target offer-
ing amount and a deadline to reach the target offer-
ing amount and ensure the third party custodian de-
scribed under paragraph (10) withholds offering pro-
ceeds until aggregate capital raised from investors 
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