Micro Offering Safe Harbor Act

Micro Offering Safe Harbor Act

(Sec. 2) This bill amends the Securities Act of 1933 to exempt certain micro-offerings from: (1) state regulation of securities offerings, and (2) federal prohibitions related to interstate solicitation.

The exempted micro-offerings must meet all of the following requirements:

• the purchaser has a substantive pre-existing relationship with the issuer,
• during the 12-month period preceding the transaction there are no more than 35 purchasers relying on the exemption, and
• the amount of all securities sold by the issuer (including any amount sold in reliance upon the exemption) during the 12-month period preceding the transaction does not exceed $500,000.

A transaction shall not qualify for the exemption if the issuer or one of certain related persons triggers a "bad actor" disqualification under specified regulations due to a relevant criminal conviction, court or regulatory order, or other disciplinary event.

Written by the nonpartisan Congressional Research Service. All summary versions on Congress.gov