An Act to exempt a particular class of securities from the Securities and Exchange Act

Provisions/Elements of the bill

This summary is based largely on the summary provided by the Congressional Research Service, a public domain source.

H.R. 701 would amend the Securities Act of 1933 to set October 31, 2013, as the deadline for the Securities and Exchange Commission (SEC) to add a class of domestic securities to those already exempted from regulation under the Securities Act of 1933. This would have to be done in accordance with a few specified terms and conditions. First, that the aggregate offering amount of all securities offered and sold within the prior 12-month period in reliance on the new exemption shall not exceed $50 million. Second, that the securities may be offered and sold publicly. Finally, that they shall not be restricted securities under federal securities laws and regulations.

House

H.R. 701 was introduced into the House of Representatives by Rep. Patrick McHenry (R-NC) on February 14, 2013. It was referred to the United States House Committee on Financial Services, which marked it up on May 7, 2013. The House Majority Leader Eric Cantor announced on Friday May 10, 2013, that H.R. 1580 would be considered the following week.

Debate and discussion

According to one source, the reason for this act is to force the SEC to take action instead of continuing to delay on finalizing new "Regulation A" rules created by the Jumpstart Our Business Startups Act (JOBS Act) passed in April 2012. The rules would make it easier for small businesses to get start-up capital, but have been delayed by the failure of the FEC to write the actual rules and guidelines for the process.