Emerging Markets Law

SEC Proposes Amendments to Crowdfunding Rules

SEC Proposes Amendments to Crowdfunding Rules

On March 4, 2020, the SEC proposed a series of amendments to several crowdfunding rules that are intended to broaden the available exemptions for crowdfund offerings and make it easier for growing business to raise capital.

The proposed amendments would:

  • Increase the maximum amount that could be raised under Reg CF to $5M
  • Increase the maximum amount that could be raised under Reg A to $75M
  • Increase the amount that non-accredited investors can invest in a Reg CF offering to the "greater of" their income or net worth (instead of the "lesser of" those amounts)
  • Permit certain special purpose vehicles (or SPVs) to invest in Reg CF offerings, opening the way for micro-funds to be created for this purpose.

The proposed rule changes would take effect 60 days after their publication in the Federal Register, suggesting a possible effective date in May, 2020.

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