To Amend The Arkansas Securities Act; And To Clarify Exempt Transactions Under The Arkansas Securities Act.
SB220 amends the Arkansas Securities Act to create and define a new state-law exemption for certain intrastate securities offerings, titled the “Invest Arkansas Exemption Act.” The bill is designed to make it easier for Arkansas-based issuers to raise capital from in-state investors without full securities registration, so long as the offering is conducted under specified conditions tied to federal intrastate-offering rules. It updates references to federal law and SEC rules to January 1, 2025, and expands the scope of the exemption by increasing the maximum amount that may be raised under the exemption from $1 million to $10 million.
The bill also raises the per-investor cap from $5,000 to $100,000 for non-accredited investors, while preserving the ability to accept larger amounts from accredited investors. It requires the issuer to be an Arkansas business with its principal place of business in the state, limits sales to Arkansas residents, requires advance filing of a proof of exemption with the Securities Commissioner, imposes a $100 filing fee, and requires disclosure of offering materials and the depository bank for investor funds. It also restricts commissions to registered broker-dealers, agents, or FINRA-registered funding portals, bars use of the exemption by certain disqualified or reporting issuers, and preserves antifraud liability.
In practical terms, the bill would affect Arkansas issuers seeking to conduct intrastate capital raises, as well as investors purchasing securities under the exemption and the Arkansas Securities Department that reviews filings. It changes state securities law by broadening an existing exemption and adding procedural safeguards, while keeping the offerings limited to in-state transactions and subject to resale restrictions and disclosure requirements. The bill also updates statutory cross-references to align with current federal securities law and SEC rules.
The overall sentiment reflected in the voting history is strongly supportive and noncontroversial: the bill passed third reading in both chambers with unanimous votes recorded in the available history. No committee transcript is available, and there is no evidence in the provided materials of organized opposition or significant debate. The unanimous votes suggest broad agreement that the measure would help Arkansas businesses access capital while maintaining investor-protection conditions.
The main points of potential contention, based on the text itself rather than recorded debate, are the much higher offering cap and the substantially larger amount that can be accepted from individual non-accredited investors, which could raise investor-protection concerns. At the same time, the bill addresses those concerns by requiring filings, disclosures, limits on who may participate in selling the securities, restrictions on eligible issuers, and continued application of antifraud rules. Supporters would likely view it as a small-business and economic-development measure, while any concerns would center on whether the expanded exemption provides enough oversight for larger intrastate offerings.
SB220 amends Arkansas Code § 23-42-504 to expand and clarify an exemption from securities registration for certain Arkansas intrastate offerings. It increases the amount that may be raised under the exemption, increases the amount that may be accepted from a single non-accredited purchaser, updates federal-law references, and adds or clarifies filing, disclosure, banking, resale, and disqualification requirements. The bill primarily affects Arkansas issuers, investors, broker-dealers, and the Arkansas Securities Commissioner by broadening access to exempt capital formation while preserving state oversight and antifraud protections.
The available voting record shows unanimous support in both chambers, with third-reading votes of 29-0 in the Senate and 94-0 in the House. No committee transcripts are provided, but the vote history indicates the bill was broadly viewed as a pro-business, capital-formation measure with sufficient investor safeguards to avoid recorded opposition. Overall sentiment appears strongly favorable and largely noncontroversial.
The most notable substantive tension in the bill is between capital formation and investor protection. The bill substantially raises the offering limit and the per-purchaser limit for non-accredited investors, which could be seen as expanding access to investment opportunities but also increasing exposure for unsophisticated investors. The bill responds by requiring proof-of-exemption filings, disclosure of offering materials, limits on commissions, use of Arkansas banks, resale restrictions, and continued antifraud coverage. No specific opposition is documented in the provided materials, so any contention appears to be inherent in the policy design rather than in recorded legislative debate.