America’s small businesses and the investors who love them may soon get their wish, if comments made on September 23 by SEC Chair Mary Jo White prove to have teeth.
Speaking at yesterday’s Securities and Exchange Commission’s Advisory Committee on Small and Emerging Companies meeting, Ms. White confirmed Title III rules would soon be implemented.
In a release dated September 18 announcing the September 23 meeting, Ms. White stated the meeting would address the recommendations related to intrastate crowdfunding, among other issues.
“I am pleased that the advisory committee is moving forward with recommendations on these important topics,” she said. “Having pointed input from the small business community and the public is essential as we continue our efforts to facilitate capital formation.”
In preparation for the September 23 meeting, the committee submitted recommendations to Ms. White.
“The ability of emerging companies to raise capital in the private markets is critical,” the committee wrote.
[caption id="attachment_10947" align="alignleft" width="300"]“These tests are difficult to satisfy and render many contemporary small businesses seeking local financing ineligible to rely upon the rule,” the committee wrote.
Issuers must also be incorporated or organized in the state where the offering would be conducted.
The committee provided three recommendations to Ms. White.
Out of state residents should be allowed to view offers made in reliance on Rule 147, but sales should be limited to residents of the state where the issuer’s main office is located.
The committee also recommended the removal of the three “80 percent” tests, while suggesting alternative criteria should be used for determining the relationship between the issuer and the state where all sales occur.
The final recommendation was to eliminate the requirement of a company having to be incorporated or organized in the same state where all sales occur.
Over the coming weeks and months Bankless Times will be interviewing industry insiders and inviting them to submit their thoughts on Title III’s implications.
Contributors
