Developing and Empowering our Aspiring Leaders Act of 2020
This bill directs the Securities and Exchange Commission (SEC) to revise venture capital investment regulations. Specifically, the bill allows investments acquired through secondary transactions to be considered as qualifying investments for venture capital funds. However, for a private fund to qualify as a venture capital fund, the investments predominately must be acquired directly. Under current law, non-qualifying investments—which include secondary transactions—may comprise up to 20% of a venture capital fund.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8603 Introduced in House (IH)]
<DOC>
116th CONGRESS
2d Session
H. R. 8603
To require the Securities and Exchange Commission to revise the
definition of a qualifying investment to include an equity security
issued by a qualifying portfolio company, whether acquired directly
from the company or in a secondary acquisition, for purposes of the
exemption from registration for venture capital fund advisers under the
Investment Advisers Act of 1940, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 16, 2020
Mr. Hollingsworth (for himself and Mr. McAdams) introduced the
following bill; which was referred to the Committee on Financial
Services
_______________________________________________________________________
A BILL
To require the Securities and Exchange Commission to revise the
definition of a qualifying investment to include an equity security
issued by a qualifying portfolio company, whether acquired directly
from the company or in a secondary acquisition, for purposes of the
exemption from registration for venture capital fund advisers under the
Investment Advisers Act of 1940, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Developing and Empowering our
Aspiring Leaders Act of 2020''.
SEC. 2. DEFINITIONS.
Not later than the end of the 180-day period beginning on the date
of the enactment of this Act, the Securities and Exchange Commission
shall--
(1) revise the definition of a qualifying investment under
paragraph (c) of section 275.203(l)-1 of title 17, Code of
Federal Regulations, to include an equity security issued by a
qualifying portfolio company, whether acquired directly from
the company or in a secondary acquisition; and
(2) revise paragraph (a) of such section to require, as a
condition of a private fund qualifying as a venture capital
fund under such paragraph, that the qualifying investments of
the private fund are predominantly qualifying investments that
were acquired directly from a qualifying portfolio company.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Financial Services.
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