Issuer disclosure, filed with the SEC, regarding the business and its management, directors and certain stockholders, terms of the offering, use of proceeds, related-person transactions and other matters.Investor limitations, based on greater of income or net worth tests, on amount that can be invested.Maximum amount that can be raised through crowdfunding of $1 million annually.The proposed rules require the following: The SEC staff has been directed to develop a "comprehensive work plan" to monitor the use of the crowdfunding exemption. As such, it was particularly challenging for the SEC to develop, keeping in mind the need to balance the objective of facilitating capital formation while protecting investors from fraud. The proposed new rules, Regulation Crowdfunding – a title that just trips off the tongue - will implement what is essentially a new regulatory regime.
#HARMONY REIGNS REGISTRATION#
Now, as directed by Congress, the SEC is proposing to allow securities-based crowdfunding that would be exempt from registration under Section 5 of the Securities Act, subject to a number of prescribed conditions, including the required use of registered intermediaries, either brokers or funding portals that will be subject to SEC and SRO oversight. Crowdfunding has been used to share views about and raise funds for various purposes for a number of years but, historically only through donation or in exchange for items of token value. This morning, the SEC voted unanimously to propose rules and forms related to the offer and sale of securities through crowdfunding under Section 4(a)(6) of the Securities Act, as mandated by the JOBS Act. Harmony Reigns as SEC Proposes Crowdfunding Rules
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