 | According to the SEC “Agency Rule List” – the agenda used to give notice on the rules SEC is working on and their respective expected dates of release -, the US financial authority is considering to implement titles V (Private Company Flexibility and Growth) and VI (Capital Expansion) of the JOBS Act by October 2015. |
In the meantime, investors as well as fundraisers are still waiting for Title III (Crowdfunding) and Title IV (Small Company Capital Formation) to come into action. Title III of the JOBS act allows small businesses to raise up to $1,000,000 in equity from the general public through an online crowdfunding portal. The $ 1 million cap sounds unnecessary to many. Two years of evidence from the highly functioning and evolving crowdfunding industry in the UK, has proven that no-limits funding rounds seems to be a working concept
Title IV, commonly referred to as “Regulation A+”, instead, would raise the capital restriction posed by Regulation A from $5,000,000 to $50,000,000. Interesting enough, Regulation A, which should be soon changed into Regulation A+ by Title IV, has been in place for almost eighty years, allowing companies to raise up to $5 million in equity capital without going through the expensive procedure of filing an IPO. This rule, which at first sight might look like a perfect base for building crowdinvesting on it, has a big drawback which almost killed its potential: it requires compliance with different securities laws for each state the companies raise money in. This requirement is going to be eliminated by the new Regulation A+, because it is of course incompatible with the mechanism of crowdfunding and it would severely affect its growth and development.
Commisioner Gallagher from the SEC recently stated his thoughts on the incoming regulations: “I also hope and expect that we will complete our Regulation A+ rulemaking, mandated by the JOBS Act, in the very near future.”
Many still predict that we may see Title III before the end of this year, while others seem much more skeptical. Whether it will be Title III or IV, this year or next, everyone involved in the U.S. crowdfunding market is eagerly awaiting decisions from the SEC.
Sources:
http://www.reginfo.gov/public/do/eAgendaMain
http://www.entrepreneur.com/article/240558
http://www.crowdfundinsider.com/2014/12/58631-rumors-swirl-jobs-act-rules-hit-next-week/
http://www.seedinvest.com/blog/sec-crowdfunding-schedule-october-2015
Image credit to: Securities and Exchange Commission http://bit.ly/1w5mA6s
Title IV, commonly referred to as “Regulation A+”, instead, would raise the capital restriction posed by Regulation A from $5,000,000 to $50,000,000. Interesting enough, Regulation A, which should be soon changed into Regulation A+ by Title IV, has been in place for almost eighty years, allowing companies to raise up to $5 million in equity capital without going through the expensive procedure of filing an IPO. This rule, which at first sight might look like a perfect base for building crowdinvesting on it, has a big drawback which almost killed its potential: it requires compliance with different securities laws for each state the companies raise money in. This requirement is going to be eliminated by the new Regulation A+, because it is of course incompatible with the mechanism of crowdfunding and it would severely affect its growth and development.
Commisioner Gallagher from the SEC recently stated his thoughts on the incoming regulations: “I also hope and expect that we will complete our Regulation A+ rulemaking, mandated by the JOBS Act, in the very near future.”
Many still predict that we may see Title III before the end of this year, while others seem much more skeptical. Whether it will be Title III or IV, this year or next, everyone involved in the U.S. crowdfunding market is eagerly awaiting decisions from the SEC.
Sources:
http://www.reginfo.gov/public/do/eAgendaMain
http://www.entrepreneur.com/article/240558
http://www.crowdfundinsider.com/2014/12/58631-rumors-swirl-jobs-act-rules-hit-next-week/
http://www.seedinvest.com/blog/sec-crowdfunding-schedule-october-2015
Image credit to: Securities and Exchange Commission http://bit.ly/1w5mA6s
 | About the author - Alexander Berg Alex is currently pursuing a bachelor’s degree in finance from Hanken School of Economics in Helsinki, Finland, while working at Crowd Valley. Born in Bruges, Belgium, he grew up in Belgium as well as Finland. He is passionate about financial markets and innovative forms of financing, and has therefore decided to work in the constantly growing equity crowdfunding sector. He is aspiring to one day become an acclaimed innovator in the ever-changing finance industry. |
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