HR3645-119

What This Bill Does

The ACCESS Act reduces audit-review friction for smaller securities crowdfunding offerings. Earlier text raised the public-accountant review threshold in Securities Act section 4A(b)(1)(D) from $100,000 to $500,000. The reported text raises the threshold from $100,000 to $250,000 and gives the Securities and Exchange Commission discretion to increase the amount up to $400,000 upon the recommendation of the Office of the Advocate for Small Business Capital Formation and the Office of the Investor Advocate. The bill also makes technical corrections by replacing old references to section 4(6) and section 4(6)(B) with current references to section 4(a)(6) and section 4(a)(6)(B).

Who Benefits and How

Small business crowdfunding issuers benefit because more offerings can avoid public-accountant review costs at the lower end of the crowdfunding market. Startup founders benefit from a simpler path to raise early capital through regulated crowdfunding. Crowdfunding portals benefit if more issuers use crowdfunding because compliance costs fall. The Office of the Advocate for Small Business Capital Formation benefits from a formal recommendation role in future threshold increases. The Securities and Exchange Commission benefits from discretion to adjust the threshold within the statutory cap.

Who Bears the Burden and How

Public accounting firms may lose review work for offerings between the old $100,000 threshold and the new threshold. Retail crowdfunding investors may face somewhat higher information risk if fewer offerings receive accountant review. The SEC must update rules, forms, guidance, and technical cross-references. The Office of the Investor Advocate must participate in any recommendation to raise the threshold above $250,000. Crowdfunding issuers still must comply with other section 4A disclosure and portal rules.

Key Provisions

• Amends Securities Act section 4A to raise the accountant-review threshold from $100,000 to $250,000 in the reported text.
• Authorizes the SEC to increase the threshold up to $400,000 upon specified office recommendations.
• Provides that grant-like relief comes through lower compliance costs rather than direct Federal funding.
• Modifies outdated section 4(6) and section 4(6)(B) references to section 4(a)(6) and section 4(a)(6)(B).
• Preserves other crowdfunding offering requirements outside the targeted threshold change.