On Tuesday, June 18, 2019, the SEC issued a Concept Release seeking comments on how to rationalize and simplify the framework governing exempt offerings in order to expand the opportunities for making investments while preserving appropriate investor protections.
The Concept Release describes the current framework for exempt securities offerings and examines several exemptions related to the facilitation of capital raising under the Securities Act of 1933. Many of the exemptions have been created piecemeal within the last ten years, particularly after the 2012 JOBS Act, and as a consequence, the resulting regulatory framework is often difficult to navigate even with the guidance of counsel.
Specifically, the SEC is seeking input on how to improve the effectiveness of the exemptions for both companies and investors alike, including identifying overlap or gaps in the regulations. Among the items on which the SEC is seeking comments are:
Potential changes to the current scheme of regulating exemptions come at a pivotal time because the market for private offerings continues to grow. SEC data shows that exempt offerings raised $2.9 trillion in 2018, compared to $1.4 trillion for registered offerings in the same time frame. As a result, non-accredited individuals are left with fewer investment opportunities, and with the current regulatory scheme, opportunities relating to capital formation remain unnecessarily strained.
The comment period will remain open for 90 days following publication of the Concept Release in the Federal Register.
 Link to the Concept Release can be found here: https://www.sec.gov/rules/concept/2019/33-10649.pdf
The post SEC Seeks Comments on How to Simplify Private Securities Offering Exemptions appeared first on Capital Markets.
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