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SEC Proposes Changes to Exempt Offering Framework; Jay Clayton Quoted

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Jay Clayton
Jay Clayton

The Securities and Exchange Commission has proposed amendments to the current exempt offering framework under the Securities Act of 1933 in an effort to expand investment opportunities and advance capital formation.

"Emerging companies—from early-stage start-ups seeking seed capital to companies that are on a path to become a public reporting company—use the exempt offering rules to access critical capital needed to create jobs and scale their businesses," SEC Chairman Jay Clayton said in a statement published Wednesday.

“These proposals are intended to create a more rational framework that better allows entrepreneurs to access capital while preserving and enhancing important investor protections.”

The proposed rule changes seek to address the ability of issuers to transition from one exemption to another; raise the offering limits for Regulation A, Regulation Crowdfunding and Rule 504 offerings; establish consistent and clear rules with regard to offering communications between issuers and investors; and coordinate certain eligibility and disclosure requirements and provisions for bad actor disqualification to reduce differences between exemptions.

Stakeholders have 60 days to comment on the proposed amendments.