Massachusetts Launches a Public Hearing on Intrastate Crowdinvesting Rules

At the beginning of 2015, Massachusetts released and immediately enacted a regulation for intrastate crowdfunding as an “emergency measure” to encourage access to finance for SMEs. After almost two months, the Massachusetts Securities Division has published a call for feedback from all interested stakeholders on the enacted rules.

The public hearing has the objective of seeking feedback on various questions including  the following:

• Is the geographical limitation to the state of Massachusetts too restrictive? Should the Securities Division consider adopting rules to facilitate offerings made in more than one state?
  
• Should the Exemption be available for other forms of securities beyond debt and equity?
  
• Are the caps on investments (i.e. $2000 or 5% of their income or net worth) and the maximum amount companies can raise (i.e. $1 million or $2 million if the company has undergone a financial audit) offering sufficient protection to non accredited investors?
  
• Are the specific disclosure requirements for fundraisers sufficient to protect investors’ interests in crowdfunding transactions?
  
• Given that the current rules do not require the use of a crowdfunding portal to offer and sell crowdfunded securities, which can now be done through an authorized broker-dealer, should the Crowdfunding Exemption extends this possibility to online investing portals?
  
  

The public hearing will be open for comments submission until the 24th of March 2015. We will see  whether the public comments push the Massachusetts Securities Division to implement changes in the regulation.


References
Alois, JD (2015).  Call for Comments: Massachusetts Poses 15 Questions on State Crowdfunding Exemption. Crowdfundinsider

---

About the author - Irene Tordera

Born and raised in Milan, Italy, Irene is an International Business graduate, with a strong interest for innovative ideas that can simplify our lives.
During her studies, she co-founded an online community for sportspeople and worked in marketing positions at Ogilvy & Mather Advertising and at the European Business Angel Network, in Brussels. She is a passionate blogger about crowdfunding and the startup ecosystem.