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 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.
Read More Here
- The JOBs Act will Have Minimal Impact on Hedge Funds (valuewalk.com)
- Accounting rules, IPO readiness, and Crowdfunding (rhodesholdings.wordpress.com)
- SEC Proposes New Rules for General Solicitation of Private Securities (stansburylegal.com)