SEC Proposes New Regulatory Framework for Crowdfunding
The Metropolitan Corporate Counsel
December 2013
On October 23, 2013, the Securities and Exchange Commission (SEC) proposed long-awaited rules that would implement Title III of the Jumpstart our Business Act (JOBS Act), known as “crowdfunding.” The SEC’s proposed rules, which are open for public comment for 90 days from their release and which could still change significantly at adoption, will when adopted support and advance the JOBS Act framework. The proposed rules create an opportunity for eligible companies to raise up to $1 million on a 12-month rolling basis from a large pool of individual investors over the Internet. This article highlights significant requirements in the crowdfunding regulatory framework, as currently contemplated by the proposed rules.