SEC Crowdfunding Rule Summary

The SEC substantially adopts prior proposed rules.

On October 30, pursuant to Title III of the Jumpstart Our Business Startups Act, which was passed in 2012, the US Securities and Exchange Commission (SEC) finally adopted rules (referred to as Regulation Crowdfunding) that permit companies to offer and sell securities through crowdfunding (essentially, through the Internet). According to the SEC, the new rules are designed to assist smaller companies with raising capital while providing investors with additional protections. These new rules and forms are expected to take effect during the second quarter of 2016 (six months after publication in the Federal Register).

Here are some quick facts about the new rules.