November 2, 2015
Crowdfunding: SEC Adopts Final Rules
On Friday, by a 3-1 vote, the SEC adopted its final crowdfunding rules – “Regulation Crowdfunding” is born! – in this 686-page adopting release. Humongous (and it doesn’t include this related DERA white paper analyzing unregistered offerings). We’re posting memos in our “Crowdfunding” Practice Area.
Meanwhile, as noted in this blog, FINRA has proposed the Funding Portal Rules and related forms that would apply to SEC-registered funding portals that become FINRA members pursuant to the JOBS Act and the SEC’s “Regulation Crowdfunding.”
SEC Proposes Changes to Rule 147 & Rule 504
In addition, the SEC proposed amendments to Rule 147 and Rule 504 in this 168-page proposing release. As noted in this blog, Rule 147 currently provides a safe harbor for compliance with the Section 3(a)(11) exemption from registration for intrastate securities offerings. The proposal would modernize the rule and establish a new exemption to facilitate capital formation, including through offerings relying upon recently adopted intrastate crowdfunding provisions under state securities laws – and eliminate the restriction on offers and ease the issuer eligibility requirements, while limiting the availability of the exemption at the federal level to issuers that comply with certain requirements of state securities laws.
And as noted in this blog, the SEC’s Rule 504 proposal that would increase the aggregate amount of securities that may be offered and sold in any twelve-month period pursuant to Rule 504 from $1 million to $5 million and to disqualify certain bad actors from participation in Rule 504 offerings.
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– Broc Romanek