I 
116TH CONGRESS 
2D SESSION 
H. R. 8378 
To amend the securities laws to exclude investment contract assets from 
the definition of a security. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 24, 2020 
Mr. EMMER (for himself, Mr. CONAWAY, Mr. SOTO, and Mr. KHANNA) intro-
duced the following bill; which was referred to the Committee on Finan-
cial Services 
A BILL 
To amend the securities laws to exclude investment contract 
assets from the definition of a security. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Securities Clarity Act’’. 
SEC. 2. SENSE OF CONGRESS; PURPOSE. 
(a) SENSE OF CONGRESS.—It is the sense of Con-
gress that— 
(1) among the ways that participants in the 
digital asset industry have raised capital and earned 
revenue is through arrangements in which investors 
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provide funds for the development of blockchain- 
based protocols in exchange for digital assets or the 
future delivery of digital assets to be used in those 
protocols; 
(2) although certain of those fundraising ar-
rangements may be deemed to be ‘‘investment con-
tracts’’ within the meaning given to that term in 
section 2(a) of the Securities Act of 1933 (the ‘‘Se-
curities Act’’), the underlying assets sold pursuant 
to these arrangements are frequently not themselves 
inherently securities as defined in section 2(a) of the 
Securities Act and, like other assets sold pursuant to 
investment contracts in the past, do not become se-
curities as so defined merely because they are sold 
pursuant to an investment contract; 
(3) under SEC v. W.J. Howey Co., 328 U.S. 
293 (1946), and its progeny, the Federal courts 
have consistently held that ‘‘an investment contract, 
for purposes of the Securities Act, means a contract, 
transaction, or scheme whereby a person invests his 
money in a common enterprise and is led to expect 
profits solely from the efforts of the promoter or a 
third party’’, and have not endorsed the notion that 
an asset underlying an investment contract (for ex-
ample, the orange groves sold in Howey) is also con-
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ferred ‘‘security’’ status merely as a result of its 
being sold pursuant to the relevant contract, trans-
action, or scheme; 
(4) although the distinction between an invest-
ment contract, which is a security, and the assets 
sold pursuant to it had been well-settled for pur-
poses of section 2(a) of the Securities Act, the two 
have been unnecessarily conflated in the context of 
digital assets; and 
(5) this new approach, which conflates an in-
vestment contract and the asset sold pursuant to 
that contract or scheme, differs from the approach 
taken in many other major jurisdictions around the 
world, has discouraged development of the digital 
asset sector in the United States, and has hindered 
innovation in that industry here without providing 
concomitant benefits to those who enter into invest-
ment contracts for the purpose of acquiring digital 
assets. 
(b) PURPOSE.—The purpose of this Act is to clarify 
and codify that an asset sold pursuant to an investment 
contract, whether tangible or intangible (including an 
asset in digital form), that is not otherwise a security 
under the Act, does not become a security as a result of 
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being sold or otherwise transferred pursuant to an invest-
ment contract. 
SEC. 3. TREATMENT OF INVESTMENT CONTRACT ASSETS. 
(a) SECURITIES ACT OF 1933.—Section 2(a) of the 
Securities Act of 1933 (15 U.S.C. 77b(a)) is amended— 
(1) in paragraph (1), by adding at the end the 
following: ‘‘The term ‘security’ does not include an 
investment contract asset.’’; and 
(2) by adding at the end the following: 
‘‘(20) The term ‘investment contact asset’ 
means an asset, whether tangible or intangible, in-
cluding assets in digital form— 
‘‘(A) sold or otherwise transferred, or in-
tended to be sold or otherwise transferred, pur-
suant to an investment contract; and 
‘‘(B) that is not otherwise a security pur-
suant to the first sentence of paragraph (1).’’. 
(b) INVESTMENT ADVISERS ACT OF 1940.—Section 
202(a)(18) of the Investment Advisers Act of 1940 (15 
U.S.C. 80b–2(a)(18)) is amended by adding at the end 
the following: ‘‘The term ‘security’ does not include an in-
vestment contract asset (as such term is defined under 
section 2(a) of the Securities Act of 1933).’’. 
(c) INVESTMENT COMPANY ACT OF 1940.—Section 
2(a)(36) of the Investment Company Act of 1940 (15 
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U.S.C. 80a–2(a)(36)) is amended by adding at the end 
the following: ‘‘The term ‘security’ does not include an in-
vestment contract asset (as such term is defined under 
section 2(a) of the Securities Act of 1933).’’. 
(d) SECURITIES EXCHANGE ACT OF 1934.—Section 
3(a)(10) of the Securities Exchange Act of 1934 (15 
U.S.C. 78c(a)(10)) is amended by adding at the end the 
following: ‘‘The term ‘security’ does not include an invest-
ment contract asset (as such term is defined under section 
2(a) of the Securities Act of 1933).’’. 
(e) SECURITIES INVESTOR PROTECTION ACT
OF 
1970.—Section 16(14) of the Securities Investor Protec-
tion Act of 1970 (15 U.S.C. 78lll(14)) is amended by add-
ing at the end the following: ‘‘The term ‘security’ does 
not include an investment contract asset (as such term 
is defined under section 2(a) of the Securities Act of 
1933).’’. 
Æ 
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