In virtual opening remarks to its Small Business Capital Formation Advisory Committee, the U.S. Securities and Exchange Commission (SEC) outlined staff reviews of initial public offering (IPO) communications restrictions and Regulation Crowdfunding. The IPO work examines limits on the content and recipients of communications, clearer boundaries for when communications constitute offers subject to the Securities Act’s gun-jumping restrictions, and straightforward provisions for issuers to cure violations. These restrictions can discourage communications between issuers, underwriters and investors. The review complements existing proposals on optional semiannual reporting, simplification of filer status and registered offering reform, which the committee supported in September as part of its continuing examination of public market access. For Regulation Crowdfunding, staff have been asked to assess amendments that could reduce compliance burdens and make the framework more attractive to issuers and investors. The rules were adopted in 2015 to make relatively small securities offerings by startups and small businesses less costly. Over the past decade, more than 9,800 offerings have raised an average of USD 364,000 each. The committee’s discussion examines experience with the framework and potential changes to improve access to early stage capital.
US Securities and Exchange Commission outlines staff reviews of IPO communications restrictions and crowdfunding rules
The U.S. Securities and Exchange Commission outlined staff reviews of initial public offering communications restrictions and Regulation Crowdfunding in opening remarks to its Small Business Capital Formation Advisory Committee. The offering review examines communication limits, clearer definitions of offers and simpler ways to cure violations. The crowdfunding work focuses on reducing compliance burdens and improving the framework’s appeal to issuers and investors.