H.R. 1553 would require the Securities and Exchange Commission (SEC) to amend Regulation D to clarify that companies presenting at “demo days” are not violating general solicitation or advertising rules. A demo day is an event that is organized by an institution of higher education, nonprofit, angel investor, or other entity approved by the SEC, where companies present to potential investors but no specific investment solicitation is made.
Regulation D currently prohibits companies that are exempt from registration with the SEC from engaging in general solicitation or advertising for their securities. In 2020, the SEC issued Securities Act Rule 148, which clarified that companies presenting at demo days are not in violation of general solicitation or advertising rules. On that basis, CBO estimates that any additional cost to amend Regulation D to comply with the requirements in the bill would be insignificant. Because the SEC is authorized to collect fees each year to offset its annual appropriation, CBO expects that the net effect on discretionary spending over the 2023-2028 period would be negligible, assuming appropriation actions consistent with that authority.
