Cold Calls for Securities Sales: Loosening Advertising and Solicitation Restrictions for Issuers (H.R. 4570)
Do you support or oppose this bill?
What is H.R. 4570?
(Updated January 31, 2017)
This bill deals with companies seeking to raise money through general solicitation and/or advertising. According to the SEC, since 1933,
any offer to sell securities must either be registered with the SEC or meet an exemption. Regulation D (or Reg D) contains three rules providing exemptions from the registration requirements, allowing some companies to offer and sell their securities without having to register the securities with the SEC.
Of the three exemptions mentioned above—they are known as Rules 504, 505, and 506, respectively, this bill deals with 506. The 506 exemption allows companies to raise unlimited money. However, there’s a few restrictions on how they can do that. One of those restrictions is that the company in question cannot use general solicitation or advertising to market the securities. This bill would allow such companies to do that. Under the legislation, companies would have to submit a single notice of sale to the SEC, should those companies choose to solicit or advertise.
Argument in favor
Gives issuers all the benefits and powers that advertising and marketing offer, just like other companies.
Argument opposed
During-dinner phone calls from J.P. Morgan, telling you that, “for the price of a cup of coffee a day…”
Impact
The bill impacts those issuers looking to use direct marketing and advertising to gain investors and money.
Cost of H.R. 4570
A CBO cost is currently unavailable.
Additional Info
- H.R. 4200, the "SBIC Advisers Relief Act of 2014"
- H.R. 4521, the "Community Institution Mortgage Relief Act"
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H.R. 4554, the "Restricted Securities Relief Act of 2014"
- H.R. 4564, the "Equity Crowdfunding Improvement Act of 2014"
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H.R. 4565, the "Startup Capital Modernization Act of 2014"
- H.R. 4568, the "Small Business Freedom to Grow Act of 2014"
- H.R. 4569, the "Disclosure Modernization and Simplification Act of 2014"
- H.R. 4571, to direct the Securities and Exchange Commission to revise its rules so as to increase the threshold amount for requiring issuers to provide certain disclosures relating to compensatory benefit plan
- H.R. 2629, the "Fostering Innovation Act of 2013"
- H.R. 1779, the "Preserving Access to Manufactured Housing Act of 2013"
- H.R. 2673, the "Portfolio Lending and Mortgage Access Act"
- H.R. 3211, the "Mortgage Choice Act of 2013"
- H.R. 4466, the "Financial Regulatory Clarity Act of 2014"
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