Technical corrections only. The changes between v3 and v4 reflect the bill's procedural movement from the House of Representatives to the Senate, including updated legislative status and the name of the House Clerk. No substantive policy changes were made to the bill text.
HALOS Act of 2025
- Sponsor
- Rep. Lawler, Michael [R-NY-17]
- Committees
- Banking, Housing, and Urban Affairs Committee (primary)
- Last action
- Jun 24, 2025
Bottom line
The HALOS Act aims to ease capital raising for startups by allowing them to present at investor events without triggering general solicitation rules, under specific safeguards.
What it actually does
This bill, known as the HALOS Act of 2025, directs the Securities and Exchange Commission (SEC) to revise its Regulation D rules. Specifically, it clarifies that certain presentations or communications made by or on behalf of an issuer at specified events will not be considered 'general solicitation or general advertising.' This aims to make it easier for early-stage companies to raise capital by allowing them to present to potential investors at events without violating SEC rules, provided strict conditions are met regarding the event's sponsorship, advertising, and the information shared.
Proponents argue
Supporters argue that this bill will significantly help early-stage companies and startups access much-needed capital by clarifying and modernizing SEC rules around general solicitation. They contend that current rules can inadvertently stifle innovation and growth by making it difficult for entrepreneurs to connect with potential investors at legitimate events. By providing clear guidelines, the bill reduces regulatory uncertainty for both issuers and event sponsors, fostering a more robust ecosystem for angel and venture capital investment.
Opponents contend
Critics might argue that while the intent to help startups is laudable, loosening general solicitation rules, even with safeguards, could potentially expose unsophisticated investors to greater risks. They may contend that the conditions outlined in the bill, such as limitations on advertising and information shared, might not be robust enough to prevent issuers from effectively soliciting investments from individuals who are not truly accredited or fully informed. Concerns could also be raised about the potential for 'bad actors' to exploit these new allowances.
The bill is short and relatively straightforward, making it accessible for a quick read and evaluation by an informed reader.
Section 2(a)
Definitions of Angel Investor Group and Issuer
This section defines two key terms for the purpose of the Act. An 'angel investor group' is a group of accredited investors focused on early-stage companies, holding regular meetings with defined investment processes, and not affiliated with brokers, dealers, or investment advisers. An 'issuer' is defined as a business that is not in bankruptcy, not an investment company, and not a blank check, blind pool, or shell company.
Supporters argue
Supporters argue that clear definitions are essential for the effective implementation of the new rules, ensuring that the benefits are directed towards legitimate early-stage investment activities and bona fide angel groups, rather than being exploited by entities outside the intended scope.
Critics contend
No specific opposition is typically raised against clear definitional provisions, provided the definitions themselves are not seen as overly restrictive or overly broad. Potential concerns might arise if the definitions inadvertently exclude legitimate entities or include problematic ones.
Tradeoffs
The definitions aim to strike a balance between inclusivity for genuine early-stage capital formation and exclusivity to prevent abuse by entities not aligned with the bill's purpose.
Section 2(b)
Exemption from General Solicitation for Event Presentations
This is the core operative provision, requiring the SEC to revise Regulation D. It mandates that the prohibition against general solicitation or general advertising will not apply to presentations or communications made by an issuer at certain events. These events must be sponsored by specific entities (e.g., government, universities, non-profits, angel investor groups, incubators) and adhere to strict conditions. These conditions include no specific offering advertising for the event, the sponsor not providing investment advice or receiving compensation for introductions, and only limited information about the offering being communicated by the issuer.
This subsection clarifies that attendance at an event described under subsection (b) shall not, by itself, qualify as establishing a pre-existing substantive relationship between an issuer and a purchaser for purposes of Rule 506(b) of Regulation D.
Section 2(d)
Why it matters:This is standard legislative practice to include specific legal clarifications or carve-outs at the end of a section to address potential ambiguities or unintended consequences of the main provision.
Case for: Proponents argue this clarification is essential to prevent unintended consequences. Without it, issuers might mistakenly believe that merely attending an event creates the 'pre-existing substantive relationship' required for a Rule 506(b) offering, which would undermine the intent of that rule and potentially lead to violations. This ensures that the new exemption for event presentations is distinct from the requirements for private offerings.
Case against: Critics might argue that this clause highlights the inherent tension in trying to allow broader communication while maintaining strict private offering rules. They could contend that if the goal is truly to facilitate capital raising, then the interaction at these events should be given more weight in establishing a relationship, or that the distinction creates unnecessary complexity for issuers trying to navigate different offering types.
Estimated impact: This provision has a significant legal impact by preventing the new event exemption from being misinterpreted as a pathway to satisfy the 'pre-existing substantive relationship' requirement for Rule 506(b) offerings, thereby maintaining the integrity of different offering types.