SEC Finalizes Long-Awaited Crowdfunding Rules

November 3rd, 2015

SEC Finalizes Long-Awaited Crowdfunding Rules

On Friday, October 30, 2015, the Securities and Exchange Commission (SEC) finalized rules to implement Title III of the Jump-Start Our Business Start-Ups Act (JOBS Act).  The rules permit equity crowdfunding involving small, individual investors, where accredited investors had previously been the only entities permitted to engage in such activity.

The legislation was passed in 2012, but the rules have been held up in the rulemaking process, despite demand from burgeoning crowdfunding markets. In a statement, SEC Chair Mary Jo White said, “There is a great deal of enthusiasm in the marketplace for crowdfunding, and I believe these rules and proposed amendments provide smaller companies with innovative ways to raise capital and give investors the protections they need. With these rules, the Commission has completed all of the major rulemaking mandated under the JOBS Act.”  The rules will become effective in six months.

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