I 
114TH CONGRESS 
2D SESSION 
H. R. 4855 
To amend provisions in the securities laws relating to regulation crowdfunding 
to raise the dollar amount limit and to clarify certain requirements 
and exclusions for funding portals established by such Act. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 23, 2016 
Mr. MCHENRY introduced the following bill; which was referred to the 
Committee on Financial Services 
A BILL 
To amend provisions in the securities laws relating to regula-
tion crowdfunding to raise the dollar amount limit and 
to clarify certain requirements and exclusions for funding 
portals established by such Act. 
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 ‘‘Fix Crowdfunding 
Act’’. 
SEC. 2. QUALIFICATION FOR CROWDFUNDING EXEMPTION. 
(1) INCREASE IN LIMIT OF AMOUNT SOLD IN 
RELIANCE ON THE CROWDFUNDING EXEMPTION.— 
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Section 4(a)(6)(A) of the Securities Act of 1933 (15 
U.S.C. 
77d(6)(A)) 
is 
amended 
by 
striking 
‘‘$1,000,000’’ and inserting ‘‘$5,000,000’’. 
(2) CLARIFICATION OF TRANSACTION CAPS.— 
Section 4(a)(6)(B) of such Act is amended— 
(A) in clause (i), by inserting ‘‘the greater 
of’’ after ‘‘5 percent of’’; and 
(B) in clause (ii), by inserting ‘‘the greater 
of’’ after ‘‘10 percent of’’. 
SEC. 3. CLARIFICATION OF CERTAIN FUNDING PORTAL RE-
QUIREMENTS AND EXCLUSIONS FOR REGU-
LATION CROWDFUNDING. 
(a) EXCLUSION OF ISSUERS FROM FUNDING POR-
TALS.— 
(1) CLARIFICATION
OF
CERTAIN
EXCLUSION 
REQUIREMENTS.—Section 302 of the Jumpstart Our 
Business Startups Act is amended by adding at the 
end the following: 
‘‘(e) CLARIFICATION OF CERTAIN EXCLUSION RE-
QUIREMENTS FOR FUNDING PORTALS.—Under the rules 
issued pursuant to subsection (d), a funding portal shall 
have a reasonable basis for disqualifying an issuer from 
offering securities through such funding portal pursuant 
to section 4(a)(6) of the Securities Act of 1933 if the fund-
ing portal, through a background check of the issuer or 
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other means, has found that such issuer, in connection 
with the offer, purchase, or sale of securities, has know-
ingly— 
‘‘(1) made any untrue statement of a material 
fact or to omit to state a material fact necessary in 
order to make the statements made, in the light of 
the circumstances under which they were made, not 
misleading; or 
‘‘(2) engaged in any act, practice, or course of 
business which operates or would operate as a fraud 
or deceit upon any person.’’. 
(2) CLARIFICATION OF OTHER OBLIGATIONS TO 
REDUCE THE RISK OF FRAUD.—Section 4A(a)(5) of 
the Securities Act of 1933 (15 U.S.C. 77d–1(a)(5)) 
is amended to read as follows: 
‘‘(5) as a minimum to reduce the risk of fraud 
with respect to such transactions obtain a back-
ground and securities enforcement regulatory history 
check on each officer, director, and person holding 
more than 20 percent of the outstanding equity of 
every issuer whose securities are offered by such per-
son;’’. 
(3) CLARIFICATION OF LIABILITY OF FUNDING 
PORTALS
FOR
MATERIAL
MISSTATEMENTS
AND 
OMISSIONS.—Section 4A(c) of such Act (15 U.S.C. 
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77d–1(c)) is amended by adding the end the fol-
lowing: 
‘‘(4) LIABILITY
OF
FUNDING
PORTALS.—For 
purposes of this subsection, an intermediary shall 
not be considered an issuer unless, in connection 
with the offer or sale of a security, it knowingly— 
‘‘(A) made any untrue statement of a ma-
terial fact or omitted to state a material fact 
necessary in order to make the statements 
made, in the light of the circumstances under 
which they were made, not misleading; or 
‘‘(B) engaged in any act, practice, or 
course of business which operates or would op-
erate as a fraud or deceit upon any person.’’. 
(b) EXEMPTION
FROM
REGISTRATION.—Section 
12(g)(6) of the Securities Exchange Act of 1934 (15 
U.S.C. 78l(g)(6)) is amended— 
(1) by striking ‘‘The Commission’’ and all that 
follows through ‘‘securities’’ and inserting ‘‘Securi-
ties’’; and 
(2) by inserting ‘‘shall be exempt’’ after ‘‘Secu-
rities Act of 1933’’. 
(c) ALLOWING SINGLE-PURPOSE FUNDS.— 
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curities Act of 1933 (15 U.S.C. 77d(a)(6)) 
under the rules adopted on October 30, 2015, 
pursuant to title III of the JOBS Act (Public 
Law 112–106); and 
(B) shall be considered venture capital 
funds for purposes of section 275.203(l)–1 of 
title 17, Code of Federal Regulations. 
(d) SOLICITATION OF INTEREST.—Section 4A of the 
Securities Act of 1933 (15 U.S.C. 77d–1) is further 
amended— 
(1) by redesignating subsections (f) (as amend-
ed by subsection (c)(1)), (g), and (h) as subsections 
(g), (h), and (i), respectively; and 
(2) by inserting after subsection (e) the fol-
lowing: 
‘‘(f) SOLICITATION OF INTEREST.— 
‘‘(1) IN GENERAL.—At any time prior to the 
filing of information with the Commission and the 
commencement of an offering made in reliance on 
section 4(a)(6), an issuer may solicit non-binding in-
dications of interest from potential investors in a 
prospective offering using the same means and pur-
suant to the same regulations (other than the filing 
of information with the Commission) as if con-
ducting an offering pursuant to such section if— 
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‘‘(A) no investor funds are accepted by 
such issuer; and 
‘‘(B) any material change in the informa-
tion provided to potential investors during the 
actual offering pursuant to such section from 
the information provided to potential investors 
during such solicitation of interest are high-
lighted to potential investors in the information 
filed with the Commission. 
‘‘(2) STATUS.—Such solicitation of interest 
shall not be considered an offer or sale of securities 
under this Act or the Securities Exchange Act of 
1934, regardless of whether or not the issuer actu-
ally conducts an offering pursuant to such section 
4(a)(6).’’. 
(e) GRACE PERIOD.—Consistent with the effective 
date of the final rules on regulation crowdfunding adopted 
by the Securities and Exchange Commission on October 
30, 2015, pursuant to title III of the JOBS Act (Public 
Law 112–106), funding portals established under such 
Act shall make a good faith effort to comply with all such 
rules. Notwithstanding such effective date, no enforcement 
action may be brought against a funding portal before 
May 16, 2021. 
Æ 
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