CFPA applauds SEC’s approval of Title II JOBS ACT crowdfunding provisions


SEC lifts Ban on General Solicitation for Private Placements in 4-1 Vote

cfpaWASHINGTON, July 12, 2013 /PRNewswire/ — Equity-based crowdfunding came one step closer to actualization Wednesday with the Securities and Exchange Commission voting 4-to-1 in favor of lifting the ban on general solicitation of private placements to accredited investors. The SEC ruling will create a new kind of offering–a 506(c). This allows private companies and investment firms to advertise private securities offerings to accredited investors only. The SEC is still working on proposed rules for Title III, which will enable the general public to participate in equity crowdfunding.

“We applaud the commission’s progress on Title II of the JOBS Act,” Says Maurice Lopes, Governing Board Member for the Crowdfunding Professional Association and Founder of EarlyShares, “We look forward to working closely with them through the implementation of Title III.”

The SEC issued a statement on the decision, saying, “In connection with this new rule, the Commission voted to issue a rule proposal requiring issuers to provide additional information about these securities offerings to better enable the SEC to monitor the market with that ban now lifted. The proposal also provides for additional safeguards as this market changes and new practices develop.” Among the proposed rules, issuers would be mandated to verify accredited investors instead of relying upon self-accreditation.

“We made a giant step forward yesterday, but the rules have not been implemented yet,” says Joy Schoffler PR committee Chair and Principal of Leverage PR. “What the business and investment community need to do now is educate themselves and entrepreneurs while staying compliant with current regulations.”

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