New Crowd-Funding Rules Could Affect You


 

The U.S. Securities and Exchange Commission recently proposed a set of rules that would somewhat relax the bans on companies advertising for investors as part of the mandated rules for crowd-funding.

The agency has until Dec. 31 to come up with rules for small-time investors, the target of the crowd-funding concept.

Until now, crowd-funding in this country has been mainly limited to small businesses that raise capital through small contributions from investors who, in return, get items from the businesses ranging from coffee mugs and t-shirts to mentions in books.

The Jumpstart Our Business Startups Act (JOBS Act) signed in to law by President Obama last spring mandated an easing of the rules governing how businesses seek funding to try to spur business growth and job creation.

The SEC has been charged with developing those rules. Let’s take a look at what’s been done so far.

The Proposed Changes

The SEC has proposed allowing companies to solicit and advertise their securities for sale to accredited investors.

The agency currently requires companies that want to sell securities to register their offerings through the SEC or use a registration exemption, which prohibits them from advertising the securities.

Part of the JOBS Act mandated the SEC remove the ban on advertising to accredited investors. The act also required businesses to make reasonable attempts to ensure investors who buy the securities were accredited. The SEC is taking comments on the proposed rules through the end of the month.

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Author: Stephen G. Barr, Group Publisher

Author, Syndicated Columnist, Editor In-Chief and Group Publisher at SGB Media Group, a social media marketing firm specializing in digital media content production, publishing, affiliate marketing, public relations and advertising. Over 25 years experience in retailing, advertising, website & online forum development, niche social networking, affiliate marketing, search optimization, branding and identity, site location, non-profit fund raising. Event planning, promotion, production and MC/Host at public events. Author, Editor & Publisher of 35 syndicated, digital publications utilizing multiple digital distribution channels in conjunction with launching and administrating national advertising campaigns for major Fortune 500 advertisers in partnership with Google, Ning, Facebook, Myspace, Yahoo, DoubleClick, LinkShare, PepperJam and other industry leading third party affiliate networks. Product development team member from conception to launch on many websites, tangible goods and organizational structure for start ups. Specialties: Public relations, retailing, advertising, website & online forum development, niche social networking, blogging, email campaigns, affiliate/performance marketing, search optimization, branding and identity, site location, event production & promotion, non-profit fund raising and tasteful, responsible adult content publishing. An internationally recognized and read social media columnist & pundit on The Examiner, Associate Content, Vator.tv, X-Biz.net and Technorati and his own affiliated sites.

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