- news
- News Digest
New SEC rules assist small businesses’ capital access
A longtime exemption for small issuers of securities is expanded.
Please note: This item is from our archives and was published in 2015. It is provided for historical reference. The content may be out of date and links may no longer function.
Related
Summing up economic sentiment and concerns about inflation and tariffs
Business outlook brightens somewhat despite trade, inflation concerns
AICPA & CIMA Business Resilience Toolkit — levers for action
TOPICS
New rules adopted by the SEC are designed to make it easier for smaller companies to gain access to capital.
The rules, which are mandated by the Jumpstart Our Business Startups (JOBS) Act, P.L. 112-106, will enable smaller companies to offer and sell up to $50 million in securities in a 12-month period, providing that eligibility, disclosure, and reporting requirements are met.
The rules update and expand Regulation A, an existing exemption from registration for smaller issuers of securities that has been available for small companies since 1936. Two tiers of offerings are provided for under the rules:
• Tier 1: For offerings of securities of up to $20 million in a 12-month period, with not more than $6 million in offers by selling security holders that are affiliates of the issuer.
• Tier 2: For offerings of up to $50 million in a 12-month period, with not more than $15 million in offers by selling security holders that are affiliates of the issuer.
The rules will take effect 60 days after they are published in the Federal Register. The rules are a response to a significant drop in the number of Regulation A offerings used by smaller companies over the years.
