Well, that didn’t take long.
It’s been a mere 457 days since the SEC proposed regulations under Title IV of the JOBS Act, aka Regulation A+, and a mere 1,070 days since the JOBS Act was signed into law. Yet the SEC approved final regulations today, with just a few tweaks from the proposed rules. Regulation A+ will go into effect in roughly 60 days.
The most important provisions of the proposed regulations survived intact: companies will be allowed to raise up to $50 million – from anyone, not just accredited investors – without approval from state regulators. You will still have to file a thick offering statement with the SEC, and investors – both accredited and non-accredited – will still be limited to investing 10% of the greater of income or net worth. Nevertheless, I expect Regulation A+ to be used very widely, indeed to transform the Crowdfunding landscape.
I’ll be providing a link to the final regulations shortly (as well as a bunch of other useful links), as well as some thoughts about where Regulation A+ will be most useful.
Title III, anybody?
Questions? Let me know.
The question is how much this is going to cost, especially in Tier II where disclosure and audit requirements are a heck of a lot like a fully public reporting company. Regulatory overhead is deadly for companies of this size. It’s also not obvious if a Tier II company can raise less than $20 million.
Tier I looks a lot lighter, but I expect the state blue sky mandate will make it as useless as the former Reg-A was.
Yes, a Tier 2 issuer can raise less than $20 million.
I’m about to post a long paper on Regulation A+ that should answer your other questions.