A few weeks ago at a keynote speech in California, SEC Chair Mary Jo White covered a wide range of topics in the world of securities regulation. The speech also referenced crowdfunding and Regulation A, both the subject of current pending rulemakings awaiting final action by the Commission. As to the two proposals, White said, “While the final framework of these two exemptions is yet to be determined by the Commission, if the enthusiasm for them is any indication, I expect strong interest in raising capital through these mechanisms. Together, these changes should provide new and expanded ways for companies of all sizes, but particularly smaller companies, to raise capital. The final implementation of crowdfunding and an updated Regulation A is an important priority in 2014, and I expect that the Commission, after thorough consideration of all comments, will move expeditiously to finalize these rules.”
The Regulation A+ proposal, in particular, has an open comment period pretty much through the end of March. Hopefully the staff will then follow their leader’s suggestion and work expeditiously to finalize the rules. In the weeks ahead I will comment on the comments to the Reg A+ proposal. I remain convinced that, done right, this change could usher in a whole new era of enthusiasm for small company IPOs at a rate not seen in quite a long time. The key will be the attitude of the regulators. If the tone of the Reg A+ proposal is any indication, we can feel cautiously optimistic that Chair White’s words above are indeed genuine and that the Commission truly desires to help “provide new and expanded ways for companies..to raise capital.”
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