Micro Offering Safe Harbor Act Passes House

On November 9, 2017, the House of Representatives passed H.R. 2201, the Micro Offering Safe Harbor Act, by a vote of 232-188.  The bill proposes to amend the Securities Act of 1933 to exempt certain micro offerings from state regulation of securities offerings and federal limitations relating to interstate solicitation.  In order to qualify for the exemption, a micro offering must have a purchaser that has a substantive preexisting relationship with the issuer; no more than 35 purchasers relying on the exemption during the 12-month period preceding the transaction; and the amount of all securities sold by the issuer does not exceed $500,000, during the 12-month period preceding the transaction.  House Financial Services Committee Chairman Jeb Hensarling noted that this "...bill will help unlock seed capital for small businesses and startup companies."