Securities Act; crowdfunding exemption. (HB1360)

Introduced By

Del. Scott Taylor (R-Virginia Beach) with support from 8 copatrons, whose average partisan position is:

Those copatrons are Del. Glenn Davis (R-Virginia Beach), Del. Scott Garrett (R-Lynchburg), Del. Chris Head (R-Roanoke), Del. Mark Keam (D-Vienna), Del. David Ramadan (R-South Riding), Del. Ron Villanueva (R-Virginia Beach), Del. Joseph Yost (R-Blacksburg), Sen. Jennifer McClellan (D-Richmond)

Description

Securities Act; Crowdfunding Virginia Exemption. Creates an exemption from the securities, broker-dealer, and agent registration requirements of the Securities Act for an offer or sale of a security by an issuer, or an individual who represents an issuer in an offer or sale, if (i) the issuer of the security is a for-profit business entity formed under the laws of the Commonwealth; (ii) the transaction meets the requirements of the federal exemption for intrastate offerings in 3(a)(11) of the Securities Act of 1933 and 17 C.F.R. 230.147; (iii) the sum of all cash and other consideration to be received for all sales of the security in reliance upon this exemption does not exceed $1 million, less the aggregate amount received for all sales of securities by the issuer within the 12 months preceding the first offer or sale made in reliance upon the exemption; (iv) the issuer does not accept more than $10,000 from any single purchaser unless the purchaser is an accredited investor as defined by 17 C.F.R. 230.501; (v) all funds received from investors are required to be deposited into a bank or depository institution authorized to do business in the Commonwealth and used in accordance with representations made to investors; (vi) the issuer files a notice with the State Corporation Commission (SCC) specifying that the issuer is conducting an offering in reliance upon this exemption and containing the names and addresses of the issuer, all persons who will be involved in the offer or sale of securities on behalf of the issuer, and the bank or other depository institution in which investor funds will be deposited; (vii) the issuer is not an investment company or subject to certain reporting requirements of the Securities Exchange Act of 1934; and (viii) the issuer informs all purchasers that the securities have not been registered and are subject to limitations on resales. The exemption shall not be available if the issuer or related person has committed specified acts, including having sold or permitted the sale through an Internet website of a security to an investor who is not a resident of the Commonwealth. The SCC shall charge a filing fee of $250 per filing, which may be increased to an amount not to exceed $500 per filing as necessary to defray the costs of administering the exemption. The measure will expire on July 1, 2020. Read the Bill »

Outcome

History