Title: HALOS Act
Policy area: Finance and Financial Sector

Summary:
Helping Angels Lead Our Startups Act of 2019 or the HALOS Act
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]
[H.R. 1909 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 1909

   To require the Securities and Exchange Commission to revise rules 
 relating to general solicitation or general advertising to allow for 
presentations or other communication made by or on behalf of an issuer 
               at certain events, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 27, 2019

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

_______________________________________________________________________

                                 A BILL


 
   To require the Securities and Exchange Commission to revise rules 
 relating to general solicitation or general advertising to allow for 
presentations or other communication made by or on behalf of an issuer 
               at certain events, 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''.

SEC. 2. CLARIFICATION OF GENERAL SOLICITATION.

    (a) Definitions.--For purposes of this Act and the revision of 
rules required under this Act:
            (1) Angel investor group.--The term ``angel investor 
        group'' means any group that--
                    (A) is composed of accredited investors 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.
            (2) Issuer.--The term ``issuer'' means an issuer that is a 
        business, is not in bankruptcy or receivership, is not an 
        investment company, and is not a blank check, blind pool, or 
        shell company.
    (b) In General.--Not later than 6 months after the date of 
enactment of this Act, the Securities and Exchange Commission shall 
revise Regulation D of its rules (17 CFR 230.500 et seq.) to require 
that in carrying out the prohibition against general solicitation or 
general advertising contained in 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 
which is made at an event--
            (1) sponsored by--
                    (A) the United States or any territory thereof, by 
                the District of Columbia, by any State, by a political 
                subdivision of any State or territory, or by any agency 
                or public instrumentality of any of the foregoing;
                    (B) a college, university, or other institution of 
                higher education;
                    (C) a nonprofit organization;
                    (D) an angel investor group;
                    (E) a venture forum, venture capital association, 
                or trade association; or
                    (F) any other group, person or entity as the 
                Securities and Exchange Commission may determine by 
                rule;
            (2) where any advertising for the event does not reference 
        any specific offering of securities by the issuer;
            (3) the sponsor of which--
                    (A) does not make investment recommendations or 
                provide investment advice to event attendees;
                    (B) does not engage in an active role in any 
                investment negotiations between the issuer and 
                investors attending the event;
                    (C) does not charge event attendees any fees other 
                than reasonable administrative fees;
                    (D) does not receive any compensation for making 
                introductions between investors attending the event and 
                issuers, or for investment negotiations between such 
                parties;
                    (E) makes readily available to attendees a 
                disclosure not longer than one 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
                    (F) does not receive any compensation with respect 
                to such event that would require registration of the 
                sponsor as a broker or a dealer under the Securities 
                Exchange Act of 1934, or as an investment advisor under 
                the Investment Advisers Act of 1940; and
            (4) 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--
                    (A) that the issuer is in the process of offering 
                securities or planning to offer securities;
                    (B) the type and amount of securities being 
                offered;
                    (C) the amount of securities being offered that 
                have already been subscribed for; and
                    (D) the intended use of proceeds of the offering.
    (c) Rule of Construction.--Subsection (b) may only be construed as 
requiring the Securities and Exchange Commission to amend the 
requirements of Regulation D with respect to presentations and 
communications, and not with respect to purchases or sales.
    (d) No Pre-Existing Substantive Relationship by Reason of Event.--
Attendance at an event described under subsection (b) shall not 
qualify, by itself, as establishing a pre-existing substantive 
relationship between an issuer and a purchaser, for purposes of Rule 
506(b).
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