SEC Proposes Crowdfunding Rules
In an important first step towards regulating businesses that fund their ventures online, the Securities and Exchange Commission unanimously approved theproposal of rules that will govern the subject. The full text of the SEC’s proposed crowdfunding rules download here as a PDF.
Crowdfunding–raising money online to fund projects, causes and even companies–to the public has been stuck in an odd state of limbo after receiving the thumbs up in early 2012 from the Jumpstart Our Business Startups Act, or JOBS Act. Meanwhile, it has become white hot with popularity, with websites like Kickstarter, Indiegogo and Prosper turning into household names.
The JOBS Act, which passed 390-26 in the House and 73-26 in the Senate, was designed to ease restrictions on capital-raising across a broad spectrum of finance, from IPOs to private placements and start-up seed financing. It left regulation to the SEC, where the subject has been mired in rulemaking delays. Crowdfunding remains one of the last provisions of the JOBS Act to be implemented.