SEC's Crowdfunding Regulations Take Effect

About two and a half years after the first proposed crowdfunding rules were published, the Securities and Exchange Commission's long-anticipated regulations recently became effective. Regulation Crowdfunding is the SEC's implementation of Title III of the Jumpstart Our Business Startups Act of 2012 (the JOBS Act), adding a new Section 4(a)(6) to the Securities Act of 1933 to provide an exemption from Securities Act registration requirements for certain "crowdfunding" transactions and establish a separate regulatory regime for those offerings. Crowdfunding allows companies, including start-ups, to raise capital by offering and selling securities through crowdfunding offerings generally using the internet and enables the public to purchase securities in these limited offerings.