SEC Approves Crowdfunding
On October 30, 2015, the Securities and Exchange Commission (SEC) approved finalized rules for investment crowdfunding for nonaccredited investors in accordance with requirements of Title III of the Jumpstart Our Business Startup (JOBS) Act. Companies will be permitted to raise a maximum aggregate of $1 million through crowdfunding offerings in a 12-month period. The rules were approved by a 3-1 vote despite concerns about inadequate “mom and pop” investor protections. The final rule has several revisions from the 2013 proposal, reducing some cost and complexity. The biggest change is that certain first-time issuers wouldn’t have to submit audited financial statements. The final rules will be effective 180 days after publication in the Federal Register.