Title: Developing and Empowering our Aspiring Leaders Act of 2020
Policy area: Finance and Financial Sector

Summary:
Developing and Empowering our Aspiring Leaders Act of 2020
This bill directs the Securities and Exchange Commission (SEC) to revise venture capital investment regulations. Specifically, the bill allows investments acquired through secondary transactions to be considered as qualifying investments for venture capital funds. However, for a private fund to qualify as a venture capital fund, the investments predominately must be acquired directly. Under current law, non-qualifying investments—which include secondary transactions—may comprise up to 20% of a venture capital fund.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8603 Introduced in House (IH)]

<DOC>






116th CONGRESS
  2d Session
                                H. R. 8603

    To require the Securities and Exchange Commission to revise the 
  definition of a qualifying investment to include an equity security 
  issued by a qualifying portfolio company, whether acquired directly 
  from the company or in a secondary acquisition, for purposes of the 
exemption from registration for venture capital fund advisers under the 
        Investment Advisers Act of 1940, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 16, 2020

    Mr. Hollingsworth (for himself and Mr. McAdams) introduced the 
   following bill; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                                 A BILL


 
    To require the Securities and Exchange Commission to revise the 
  definition of a qualifying investment to include an equity security 
  issued by a qualifying portfolio company, whether acquired directly 
  from the company or in a secondary acquisition, for purposes of the 
exemption from registration for venture capital fund advisers under the 
        Investment Advisers Act of 1940, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Developing and Empowering our 
Aspiring Leaders Act of 2020''.

SEC. 2. DEFINITIONS.

    Not later than the end of the 180-day period beginning on the date 
of the enactment of this Act, the Securities and Exchange Commission 
shall--
            (1) revise the definition of a qualifying investment under 
        paragraph (c) of section 275.203(l)-1 of title 17, Code of 
        Federal Regulations, to include an equity security issued by a 
        qualifying portfolio company, whether acquired directly from 
        the company or in a secondary acquisition; and
            (2) revise paragraph (a) of such section to require, as a 
        condition of a private fund qualifying as a venture capital 
        fund under such paragraph, that the qualifying investments of 
        the private fund are predominantly qualifying investments that 
        were acquired directly from a qualifying portfolio company.
                                 <all>