The SEC’s proposal would build upon Regulation A, which is an existing exemption from registration for small offerings of securities up to $5 million within a 12-month period. The updated exemption would enable companies to offer and sell up to $50 million of securities within a 12-month period.
The rules are mandated by Title IV of the Jumpstart Our Business Startup (JOBS) Act.
“This proposal is intended to help increase access of smaller companies to capital,” said SEC Chair Mary Jo White. “In shaping this proposal, we sought to develop an effective, workable path to raising capital that, very importantly, also builds in necessary investor protections.”
The SEC’s proposal will undergo a 60-day public comment period after it is published in the Federal Register.
Editing by Alex Akesson