06 May SEC Publishes Small Business Recommendations

Each year following the annual SEC forum on small business capital formation, a list of attendee recommendations is published. The recommendations are ranked by the attendees following the event, and the SEC puts them out in order of priority.

Congress mandated that the SEC hold this conference annually, and it includes remarks from all five SEC Commissioners. Often items remain on the priority list for years, but there are times when either the SEC or Congress taps the list to take action for the benefit of small business.

This year, those interested in crowdfunding managed to “crowd” many of the top spots on the priority list. In fact 8 of the top 11 recommendations relate to crowdfunding. As we know, the Jumpstart Our Business Startups (JOBS) Act for the first time authorized companies to raise up to $1 million from an unlimited number of people with a variety of benefits but also restrictions. The SEC must write rules to implement the JOBS Act provisions.

Other key recommendations: urging the SEC to move quickly to finalize rules eliminating the ban on general solicitation in Regulation D offerings as authorized by the JOBS Act, as well as the rules allowing a simplified IPO under Regulation A to become more attractive, and to allow “finders” to act in the open and receive commissions for raising money for companies even if not registered as broker-dealers.

More to come on this..