To amend the Securities Act of 1933 to automatically approve offering statements filed with the Securities and Exchange Commission in connection with certain securities issued under Regulation A tier 2, and for other purposes.
About This Bill
Committee
Latest Action · May 2, 2024
Referred to the House Committee on Financial Services.
This bill streamlines the process for small businesses and startups to raise capital through securities offerings under Regulation A tier 2, a SEC program designed for smaller companies. Under current law, companies must wait for SEC approval of offering statements before proceeding with sales; the RACE Act would automatically approve offering statements for substantially similar securities once a company has already had one class of securities approved, allowing them to move forward immediately upon filing. The automatic approval applies to offerings of less than $5 million per class, as long as the total raised across all similar securities within a 12-month period doesn't exceed existing caps, and the new securities share common characteristics with previously approved securities but don't need identical terms. This change primarily affects small businesses, startups, and entrepreneurs seeking to raise capital without going through the full registration process required for larger public offerings. The legislation aims to reduce regulatory delays and costs for small capital raises while maintaining investor protections through existing Regulation A requirements.
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