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Dan Primack from Fortune reports that the ban on “general solicitation” for private investments could soon be eliminated thanks to a bill introduced in the House of Representatives. According to Primack:

Rep. Kevin McCarthy (R-CA) has introduced a short bill that would direct the SEC to “eliminate the prohibition against general solicitation as a requirement for a certain exemption under Regulation D.”

The expectation is that this proposal could get packaged with a group of other bills aimed at encouraging capital formation, including the 500-shareholder rule expansion and a more controversial effort to reduce “crowd-funding” restrictions. And since McCarthy is Majority Whip, he’s got the juice to make sure his pet projects get a vote.

To be clear, McCarthy isn’t proposing a free-for-all. Accredited investor requirements would remain. He also isn’t aiming this at PE/VC firms – his stated focus is small biz — but they would still seem to benefit from the elimination.

If the bill is approved by Congress and signed into law, it could mean significant changes in the way private companies, as well as PE funds, are able to go about managing their capital raises. A recent WSJ article put it this way: “Currently, a ‘general solicitation’ ban prevents small companies from advertising private stock or bond sales beyond ‘accredited investors,’ or those who meet a series of criteria, such as individuals with a net worth of at least $1 million or charities or corporations with assets above $5 million. That rule effectively means potential investors must have a pre-existing relationship with an issuer before they can be notified that unregistered securities are available.”

If you’ve ever wondered why deal rooms on CapLinked are private and accessible by invitation-only, this is why.  When a user creates a deal room and uploads relevant documents to it, the deal room remains private until the user shares it. CapLinked provides users with a number of tools to help them share their deals, including the ability to import over your email account’s address book and the Suggestions tool to identify key contacts on LinkedIn.

We’ll keep you updated as developments unfold regarding this bill. In the meantime, be sure to read our tutorial How to Create & Share a Deal for more information on using CapLinked for a capital raise.