MONTH-IN-BRIEF (Nov 2017)
Private Equity and Venture Capital
Capital Formation Bills Pass House
By Anna Pinedo, Morrison Foerster
HR 1585, The Fair Investment Opportunities for Professional Experts Act, sponsored by Rep. Schweikart, passed the House by a voice vote on November 1, 2017. This bill would expand the Regulation D “accredited investor” definition to include persons, regardless of the net worth/net income test, holding certain financial services licenses as well as persons determined by the SEC to be financially sophisticated by virtue of education or job experience. The House also passed the Meeks bill, HR 3903, Encouraging Public Offerings Act, which would extend JOBS Act IPO-related accommodations, including the ability to test the waters, to all issuers. The accommodations are currently available only to emerging growth companies. HR 3903 passed 419-0. If enacted, the bills will facilitate capital raising by (1) lowering the wealth-related standards for potential investors in exempt offerings while requiring that persons investing in unregistered securities possess an understanding of the investment and related risks, and (2) allowing all companies to submit to the SEC draft registration statements relating to an IPO for review on a nonpublic basis.