Sec. 107. Unlocking capital for small businesses
1,213 words·~6 min read·
/bill/118/s/5139/is/section-107A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 15 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78o ) is amended by adding at the end the following: Before the consummation of a transaction effecting a private placement, a finder shall disclose clearly and conspicuously, in writing, to all parties to the transaction as a result of the activities of the finder— that the finder is acting as a finder; the amount of any compensation or anticipated compensation in any form for services rendered as a finder in connection with such transaction; the person entitled to receive any compensation described in subparagraph (B); and any beneficial interest in the issuer, direct or indirect, of the finder, of a member of the immediate family of the finder, of an associated person of the finder, or of a member of the immediate family of such associated person before the consummation of the transaction effecting the private placement or anticipated to be held following the consummation of the transaction.
In this subsection: The term finder means a person that— receives transaction-based compensation— for effecting a transaction by— introducing an issuer or owner of securities and a buyer of such securities in connection with the sale of a business effected as the sale of securities; or introducing an issuer or owner of securities and a buyer of those securities in connection with the placement of securities in transactions that are exempt from the registration requirements under the Securities Act of 1933 ( 15 U.S.C. 77a et seq. ); and that is not with respect to— a class of publicly traded securities; the securities of an investment company, as defined in section 3 of the Investment Company Act of 1940 ( 15 U.S.C. 80a–3 ); or a variable or equity-indexed annuity or other variable or equity-indexed life insurance product; with respect to a transaction for which such transaction-based compensation is received— does not handle or take possession of the funds or securities; does not engage in an activity that requires registration as an investment adviser under State or Federal law; and is not subject to a statutory disqualification; and is not a private placement broker, as defined in subsection (q)(3).
The term private placement means a transaction described in section 4(a)(2) of the Securities Act of 1933 ( 15 U.S.C. 77d(a)(2) ). Not later than 270 days after the date of enactment of this subsection, the Commission shall propose regulations with respect to private placement brokers. The regulations proposed under subparagraph
(A)may not require a private placement broker to comply with any net capital requirement, have a financial principal, or have or produce for examination by any regulatory authority audited financial statements of the private placement broker. Not later than 270 days after the date on which the Commission publishes in the Federal Register the proposed regulations under subparagraph (A), the Commission shall promulgate final versions of those regulations. Not later than 270 days after the date of enactment of this subsection, the Commission shall promulgate regulations that require the rules of any national securities association to allow a private placement broker to become a member of that national securities association, subject to reduced membership requirements consistent with this subsection. Not later than 270 days after the publication of the proposed regulations in the Federal Register, the Commission shall promulgate final versions of the regulations described in subparagraph (A). In this subsection, the term private placement broker means a person that— receives transaction-based compensation in connection with the sale of a business effected as the sale of securities or in connection with the placement of securities in transactions that are exempt from the registration requirements under the Securities Act of 1933 ( 15 U.S.C. 77a et seq. ) with respect to a transaction for which transaction-based compensation is received; and with respect to the transaction-based compensation described in clause (i), receives that compensation— in an amount that is not more than $500,000 in any calendar year; in connection with transactions that result in a single issuer selling securities valued at not more than $15,000,000 in any calendar year; in connection with transactions that result in any combination of issuers selling securities valued at not more than $30,000,000 in any calendar year; or in connection with fewer than 16 transactions that are not part of the same offering or are otherwise unrelated in any calendar year. The amounts described in subparagraph (A)(ii) shall be increased each year by an amount equal to the percentage increase, if any, in the Consumer Price Index, as determined by the Department of Labor or its successor. . Section 29 of the Securities Exchange Act of 1934 ( 15 U.S.C. 78cc ) is amended by adding at the end the following: Subsection
(b)shall not apply to a contract made for a transaction if— the transaction is one in which the issuer engaged the services of a finder (as defined in section 15(p)(2)) that is not registered under this title or a private placement broker (as defined in section 15(q)(3)) with respect to that transaction; the issuer received a self-certification from a finder or private placement broker described in paragraph
(1)certifying that such finder or private placement broker is a finder under section 15(p) or a registered private placement broker under section 15(q); and the issuer— did not know that the self-certification described in paragraph
(2)was false; or did not have a reasonable basis to believe that the self-certification described in paragraph
(2)was false. . Section 5312(a)(2)(G) of title 31, United States Code, is amended by inserting with the exception of a finder, as defined in subsection (p)(2) of section 15 of that Act ( before the semicolon at the end. 15 U.S.C. 78o ) Section 3(a)(4) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78c(a)(4) ) is amended by adding at the end the following: A finder, as defined in section 15(p)(2), is not a broker for the purposes of this Act. . Section 15(i) of the Securities Exchange Act of 1934 ( 15 U.S.C. 78o(i) ) is amended— in paragraph (3), in the matter preceding subparagraph (A), by striking paragraph
(3)and inserting paragraph
(5); by redesignating paragraph
(4)as paragraph (5); and by inserting after paragraph
(3)the following: No State or political subdivision thereof may enforce any law, rule, regulation, or other administrative action that imposes greater registration, audit, financial recordkeeping, or reporting requirements on a finder or private placement broker than those that are required under subsections
(p)and (q), respectively. Each State— shall have electronic access to any registration filed with the Commission by a private placement broker; and may require a written notice from a finder operating from within that State, or communicating with potential investors that are citizens or residents of that State, that provides the name, principal place of business, telephone number, and email address of the finder, which shall be transmitted to the State before the consummation of a transaction— in the finder’s State of residence; or involving a party to the transaction that is a citizen or resident of the State described in subclause (I). In this paragraph, the terms finder and private placement broker have the meanings given those terms in subsections (p)(2) and (q)(3) of section 15, respectively. .
Connectionstraces to 5
1 reference not yet in our index
- 15 USC 80a–3
Citation graph
cites case law
Sec. 107
Unlocking capital for small businesses
Cite15 USC 80a–3
Cites 6Cited by 0 across 0 sources