SEC Adopts New Rules to Facilitate Capital Raising by Private Companies
The Securities and Exchange Commission (“SEC”) adopted final rules amending Regulation A (“Regulation A+”) under the Securities Act of 1933, as mandated by the Jumpstart Our Business Startups Act.
The new rules, according to a Womble Carlyle article, which are part of the government’s efforts to give private companies greater access to capital, will expand and modernize existing Regulation A by providing new registration exemptions for privately-held companies making securities offerings of $50 million or less within a 12-month period.
The new rules provide for two tiers of offerings:
- Tier 1 offerings may raise up to $20 million of securities in a 12-month period
- Tier 2 offerings may raise up to $50 million of securities in a 12-month period
Companies issuing up to $20 million of securities may choose whether to proceed under Tier 1 or Tier 2.