SEC’s Equity Crowdfunding Rules Finally Kick In

Companies also must comply with initial and ongoing disclosure requirements regarding their business and the securities offering and requirements for financial statements. 

The equity crowdfunding rules were the last of the SEC's four capital raising measures the agency has introduced under the JOBS Act. In 2013, the SEC created a new exemption that allows companies to engage in general solicitation of the public for certain unregistered securities offerings, provided that all purchasers are "accredited investors" and that issuers take reasonable steps to verify that status. 

The SEC plans to discuss on May 18 during its meeting of the Advisory Committee on Small and Emerging Companies the agency's recently released report on ways to "modernize" the accredited investor definition as well as unregistered securities offerings under Regulation D.

In 2015, the SEC updated its rules for smaller offerings that allow companies to raise capital through the sale of securities to the general public without incurring the full cost of registration and reporting, via Regulation A+, which allows issuers to raise up to $50 million over a 12-month period. 

Since Reg A+ became effective last March, issuers have publicly filed more than 85 offering statements, while others have taken advantage of provisions in the rules that allow for nonpublic staff review of draft offering statements before publicly filing, White said at the IOSCO event.

The SEC has also qualified more than 30 offering statements from companies seeking to raise approximately $500 million, she said. 

The SEC also implemented statutory enhancements to the registration and reporting process for initial public offerings of common equity securities, known as the "IPO on-ramp."

— Check out SEC to Discuss Accredited Investor Definition, Reg D Offerings on ThinkAdvisor.