SEC to Adopt Crowdfunding Rule in ‘Very Near Term'

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By Rob Tricchinelli

Sept. 23 — The SEC will finish its rule on equity-based crowdfunding in the “very near term,” Chairman Mary Jo White said Sept. 23.

The Securities and Exchange Commission proposed the crowdfunding rule in October 2013. It is authorized by Title III of the Jumpstart Our Business Startups Act and will allow startups and small issuers to bring in capital by selling crowdfunded securities without being forced to comply with certain costly requirements.

“The staff has been working hard on final rule recommendations for the Commission,” White said at a meeting of the SEC's Advisory Committee on Small and Emerging Companies.

The agency also renewed the committee for another two years.

Committee

On crowdfunding, the committee recommended that the agency modernize 1933 Securities Act Rule 147, which allows companies to raise capital within a state without registering with the SEC.

The committee also recommended that the SEC ease disclosure requirements on “smaller reporting companies” and expand the definition of those companies to include those with a public float of up to $250 million.

In a third recommendation, the committee said the SEC should clarify its rules on intermediaries who connect broker-dealers with investors, so that those so-called finders are not subject to registering as a broker under the 1934 Securities Exchange Act.

To contact the reporter on this story: Rob Tricchinelli in Washington at rtricchinelli@bna.com

To contact the editor responsible for this story: Susan Jenkins at sjenkins@bna.com