Title: HALOS Act of 2019
Policy area: Finance and Financial Sector

Summary:
Helping Angels Lead Our Startups Act of 2019 or the HALOS Act of 2019
This bill directs the Securities and Exchange Commission (SEC) to revise Regulation D, which exempts certain offerings from SEC registration requirements but prohibits general solicitation or general advertising with respect to such offerings. Specifically, this prohibition shall not apply to events with specified kinds of sponsors—including "angel investor groups" unconnected to broker-dealers or investment advisers—where presentations or communications are made by or on behalf of an issuer, if

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1063 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                S. 1063

 To require the Securities and Exchange Commission to revise the rules 
     of the Commission relating to general solicitation or general 
                  advertising, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 8, 2019

   Mr. Murphy (for himself, Mr. Toomey, Mr. Schatz, Mr. Tillis, Ms. 
 Sinema, and Mr. Thune) introduced the following bill; which was read 
  twice and referred to the Committee on Banking, Housing, and Urban 
                                Affairs

_______________________________________________________________________

                                 A BILL


 
 To require the Securities and Exchange Commission to revise the rules 
     of the Commission relating to general solicitation or general 
                  advertising, 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 ``Helping Angels Lead Our Startups Act 
of 2019'' or the ``HALOS Act of 2019''.

SEC. 2. HELPING ANGELS LEAD OUR STARTUPS.

    (a) Definitions.--In this section, and for the purposes of the 
revisions required under subsection (b)--
            (1) the term ``angel investor group'' means any group 
        that--
                    (A) is composed of accredited investors who are 
                interested in investing personal capital in early-stage 
                companies;
                    (B) holds regular meetings and has defined 
                processes and procedures for making investment 
                decisions, either individually or among the membership 
                of the group as a whole; and
                    (C) is neither associated nor affiliated with 
                brokers, dealers, or investment advisers; and
            (2) the term ``issuer'' means an issuer that--
                    (A) is a business;
                    (B) is not in bankruptcy or receivership; and
                    (C) is not a blank check, blind pool, or shell 
                company.
    (b) Clarification of General Solicitation.--
            (1) In general.--Not later than 180 days after the date of 
        enactment of this Act, the Securities and Exchange Commission 
        shall revise sections 230.500 through 230.508 of title 17, Code 
        of Federal Regulations (referred to in this subsection as 
        ``Regulation D''), to require that, in carrying out the 
        prohibition against general solicitation or general advertising 
        under section 230.502(c) of title 17, Code of Federal 
        Regulations, the prohibition shall not apply to a presentation 
        or other communication made by or on behalf of an issuer at an 
        event--
                    (A) sponsored by--
                            (i) the United States;
                            (ii) any territory of the United States;
                            (iii) the District of Columbia;
                            (iv) any State;
                            (v) a political subdivision of any State or 
                        territory;
                            (vi) an agency or public instrumentality of 
                        any entity described in clauses (i) through 
                        (v);
                            (vii) a college, university, or other 
                        institution of higher education;
                            (viii) a nonprofit organization;
                            (ix) an angel investor group;
                            (x) a venture forum, venture capital 
                        association, or trade association; or
                            (xi) any other group, person, or entity 
                        that the Securities and Exchange Commission 
                        may, by rule, determine to be appropriate;
                    (B) where any advertising for the event does not 
                reference any specific offering of securities by the 
                issuer;
                    (C) the sponsor of which--
                            (i) does not make investment 
                        recommendations or provide investment advice to 
                        attendees of the event;
                            (ii) does not engage in an active role in 
                        any investment negotiations between the issuer 
                        and investors attending the event;
                            (iii) does not charge attendees of the 
                        event any fees other than reasonable 
                        administrative fees;
                            (iv) does not receive any compensation 
                        for--
                                    (I) making introductions between 
                                investors attending the event and 
                                issuers; or
                                    (II) investment negotiations 
                                between the parties described in 
                                subclause (I);
                            (v) makes readily available to attendees of 
                        the event a disclosure not longer than 1 page 
                        in length, as prescribed by the Securities and 
                        Exchange Commission, describing the nature of 
                        the event and the risks of investing in the 
                        issuers presenting at the event; and
                            (vi) does not receive any compensation with 
                        respect to the event that would require 
                        registration of the sponsor as--
                                    (I) a broker or a dealer under the 
                                Securities Exchange Act of 1934 (15 
                                U.S.C. 78a et seq.); or
                                    (II) an investment advisor under 
                                the Investment Advisers Act of 1940 (15 
                                U.S.C. 80b-1 et seq.); and
                    (D) where no specific information regarding an 
                offering of securities by the issuer is communicated or 
                distributed by or on behalf of the issuer, other than--
                            (i) that the issuer is in the process of 
                        offering securities or planning to offer 
                        securities;
                            (ii) the type and amount of securities 
                        being offered;
                            (iii) the amount of securities being 
                        offered that have already been subscribed for; 
                        and
                            (iv) the intended use of proceeds of the 
                        offering.
            (2) Rule of construction.--Paragraph (1) may only be 
        construed as requiring the Securities and Exchange Commission 
        to amend Regulation D with respect to presentations and 
        communications and not with respect to purchases or sales.
            (3) No pre-existing substantive relationship by reason of 
        event.--Attendance at an event described in paragraph (1) shall 
        not qualify, by itself, as establishing a pre-existing 
        substantive relationship between an issuer and a purchaser for 
        the purposes of section 230.506(b) of title 17, Code of Federal 
        Regulations.
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