HALOS Act of 2025
- Bill Number
- S. 3342
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2025-12-04: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- Last Updated
- 2026-02-04T05:06:15Z
AI-Generated Summary
Purpose
The Helping Angels Lead Our Startups Act of 2025 (HALOS Act) aims to make it easier for early-stage companies to connect with potential investors by allowing them to present at certain public events without violating federal rules against broad advertising of securities offerings. This supports startup funding while maintaining investor protections.
Key Provisions
- Definitions:
- Angel investor group: A group of wealthy individuals (accredited investors) who meet regularly to discuss and decide on investments in early-stage businesses; not linked to brokers, dealers, or financial advisors.
- Issuer: A business that is not bankrupt, not an investment fund, and not a shell company (a company without real operations).
- SEC Rule Revision:
- Within 6 months of enactment, the Securities and Exchange Commission (SEC) must update Regulation D (federal rules on private securities offerings, specifically sections 230.500–230.508) to exempt presentations or communications by issuers from the ban on "general solicitation or general advertising" (broad promotion of securities to the public).
- This exemption applies only to events meeting strict criteria:
- Sponsored by governments (U.S., states, tribes, or their agencies), colleges/universities, nonprofits, angel investor groups, startup incubators/accelerators, venture forums, trade associations, or other groups approved by the SEC.
- Not held in religious facilities (except accredited higher education institutions focused on college-level education).
- Event ads do not mention specific securities offerings.
- Sponsors must:
- Avoid giving investment advice or recommendations.
- Not participate in deal negotiations.
- Charge only reasonable admin fees (no investment-related compensation).
- Provide a short SEC-prescribed disclosure to attendees about the event and investment risks.
- Not receive pay that would require them to register as brokers, dealers, or investment advisors.
- Issuers can only share limited details: that they're offering/planning to offer securities, the type and amount offered, how much is already subscribed, and planned use of funds (no specifics on the offering itself).
- Limitations:
- The changes only affect rules on presentations/communications, not on actual buying or selling of securities.
- Simply attending such an event does not count as building a "pre-existing substantive relationship" (a prior meaningful connection required for certain private offerings under Rule 506(b)).
Significant Changes to Existing Law
- Amends Regulation D's prohibition on general solicitation (Rule 502(c)) to carve out exceptions for qualified events, building on the 2012 JOBS Act (which eased some fundraising rules for startups).
- Introduces new safeguards for event sponsors and limits on shared information to prevent abuse, while clarifying that event attendance alone doesn't satisfy relationship requirements for private placements.
- No changes to core investor accreditation rules or overall securities registration exemptions.
Potential Impacts
- Government Agencies: The SEC must revise rules within 6 months, potentially increasing oversight of startup events to ensure compliance; may lead to new guidance or enforcement actions.
- Citizens/Entrepreneurs: Early-stage companies gain more opportunities to pitch ideas at public forums, accelerating access to angel funding and reducing reliance on private networks; could boost innovation and job creation in startups.
- International Relations: Minimal direct impact, though it may indirectly attract foreign investors to U.S. startups by simplifying domestic networking events.
Main Stakeholders Affected
- Issuers/Startups: Benefit from easier pitching at events to reach accredited investors.
- Angel Investors and Groups: Gain structured access to potential deals without violating solicitation rules.
- Event Sponsors (e.g., nonprofits, universities, incubators): Can host compliant events but must follow new disclosure and neutrality requirements.
- SEC and Regulators: Responsible for implementation and monitoring to balance innovation with fraud prevention.
- Potential Investors: Receive clearer risk disclosures, but protections remain against unregistered promotions.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens the framework of private securities exemptions under the Securities Act of 1933 by clarifying ambiguities in post-JOBS Act rules; emphasizes investor safeguards (e.g., disclosures) to avoid challenges under anti-fraud laws.
- Constitutional: No apparent issues; aligns with First Amendment interests in commercial speech while regulating securities to protect interstate commerce.
- Political: Supports bipartisan goals of fostering entrepreneurship (introduced by Sens. Ricketts and Gallego); may face debate over deregulation risks versus startup growth benefits, but includes checks to prevent broker-like activities at events.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Recent Actions
- 2025-12-04: Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
- 2025-12-04:
- 2025-12-04: Introduced in Senate
Bill Versions
- Helping Angels Lead Our Startups Act of 2025 — issued 2025-12-04 — PDF (6 pages)