Crowdfunding Amendments Act

Bill: 116-hr-4860
Sponsor: Rep. McHenry, Patrick T. [R-NC-10]
Introduced: 2019-10-28 in the House
Policy area: Finance and Financial Sector
Subjects: Bank accounts, deposits, capital
Banking and financial institutions regulation
Financial services and investments
Licensing and registrations
Securities

Summary:
action_date: 2019-10-28
text: 

Crowdfunding Amendments Act

 
This bill allows a crowdfunding issuer to sell shares through a crowdfunding vehicle. (Crowdfunding is a method of capital formation in which groups of people pool money to invest in a company or to support an effort to accomplish a specific goal.)
 
A "crowdfunding vehicle" is defined as a company that
 
 
has purposes limited to acquiring, holding, and disposing only one class of crowdfunding securities issued by a single company; 
 
receives no compensation for doing so; and 
 
meets other specified requirements, including those related to reporting obligations and the use of investment advisers. 

 
The bill provides for the registration of crowdfunding vehicle advisers. 
 
The bill also revises the conditions upon which the Securities and Exchange Commission (SEC) shall exempt securities issued in crowdfunding transactions from registration requirements. Under current law, holders of crowdfunded shares do not count toward the shareholder threshold beyond which an issuer is required to register its securities with the SEC, provided that the issuer (1) is current in its annual reporting obligations, (2) retains the services of a registered transfer agent, and (3) has less than $25 million in assets. The bill maintains this exemption but alters the conditions upon which it applies. Specifically, holders of crowdfunded shares shall not count toward the shareholder threshold if the issuer has (1) a public float of less than $75 million, or (2) a public float of $0 and annual revenues of less than $50 million. 

action_date: 2019-10-28
text: 

Crowdfunding Amendments Act

 
This bill allows a crowdfunding issuer to sell shares through a crowdfunding vehicle. (Crowdfunding is a method of capital formation in which groups of people pool money to invest in a company or to support an effort to accomplish a specific goal.)
 
A "crowdfunding vehicle" is defined as a company that
 
 
has purposes limited to acquiring, holding, and disposing only one class of crowdfunding securities issued by a single company; 
 
receives no compensation for doing so; and 
 
meets other specified requirements, including those related to reporting obligations and the use of investment advisers. 

 
The bill provides for the registration of crowdfunding vehicle advisers. 
 
The bill also revises the conditions upon which the Securities and Exchange Commission (SEC) shall exempt securities issued in crowdfunding transactions from registration requirements. Under current law, holders of crowdfunded shares do not count toward the shareholder threshold beyond which an issuer is required to register its securities with the SEC, provided that the issuer (1) is current in its annual reporting obligations, (2) retains the services of a registered transfer agent, and (3) has less than $25 million in assets. The bill maintains this exemption but alters the conditions upon which it applies. Specifically, holders of crowdfunded shares shall not count toward the shareholder threshold if the issuer has (1) a public float of less than $75 million, or (2) a public float of $0 and annual revenues of less than $50 million. 


Legislative actions:
action_date: 2019-10-29
text: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
action_date: 2019-10-28
text: Motion to reconsider laid on the table Agreed to without objection.
action_date: 2019-10-28
text: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H8493)
action_date: 2019-10-28
text: Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote.(text: CR H8493)
action_date: 2019-10-28
text: DEBATE - The House proceeded with forty minutes of debate on H.R. 4860.
action_date: 2019-10-28
text: Considered under suspension of the rules. (consideration: CR H8493-8494)
action_date: 2019-10-28
text: Mr. Scott, David moved to suspend the rules and pass the bill, as amended.
action_date: 2019-10-28
text: Referred to the House Committee on Financial Services.
action_date: 2019-10-28
text: Introduced in House
action_date: 2019-10-28
text: Introduced in House