Great news for all folks involved in the equity crowdfunding industry. After a long 3-year waiting time, SEC will finally vote JOBS Act Title III rules this Friday, October 30th.
Despite Title IV, enabled a few months ago, allowed participation for common people, non-accredited investors, the requirements and costs of Reg A+ were far too high to make it a reality.
Now with Title III, dubbed Retail Equity Crowdfunding, simple and clear rules are expected to allow companies to raise money through equity from everyone, a big step towards creating a massive equity crowdfunding environment in America.
Under Sunshine Act rules, SEC meeting will be open to anyone wishing to attend it. It will be held in the Auditorium, Room L-002, at 10:00 AM. There will be a streaming video on SEC website as well.
In the meeting, SEC will make considerations as to whether some aspects of the legislation will be altered or amended, all of them according to requirements of Title III of JOBS Act. You can read the meeting call in this link.
What we can expect
As the final text is not yet voted and is pending considerations, we cannot make any assumptions on the requirements of Title III. However, it is expected by the market that caps on the amount each individual can invest and on how much each company can raise will be lower under Title III than under Title IV.
That’s because requirements tend to be lower. Businesses are not likely to need checking every investor accredited status, and may not likely need to register every round of fund-raising, so long as they do it under a certain annual limit.
Exemptions from registration and checks is important to lower costs of capital raising, while keeping low limits on investment is important to protect small investors. That’s exactly we can expect from Title III.