In a recent alert, we noted that the stars were aligning in Washington for crowdfunding and securities regulation reform. It is happening.
Today, the House of Representatives passed new securities reform legislation, including an exemption that would enable some crowdfunding. In addition, President Obama announced Tuesday his support for the new legislation.
In an effort to create jobs, Republican leadership in the House of Representatives consolidated several standalone securities reform bills—H.R. 1070, H.R. 2167, H.R. 2930, H.R. 2940, H.R. 3606, and H.R. 4088—into an omnibus bill known as the Jumpstart Our Business Startups (JOBS) Act (H.R. 3606). House leadership quickly brought the bill to the floor, where it passed with bipartisan support by a vote of 390 in favor and 23 opposed.
The JOBS Act provides for:
- Increasing the amount of capital that can be raised without registering the offering with the SEC
- Raising the number of shareholders a company can have without registering with the SEC
- Creating a limited exemption from securities regulation for crowdfunding
- Eliminating the prohibition of general solicitation and advertising when small businesses raise private capital
- Creating several exemptions from securities regulation for businesses that qualify as "emerging growth companies"
- Loosening regulation of community banks
Meanwhile, as Republican presidential candidates campaigned intensely on "Super Tuesday," President Obama formally announced his support for the JOBS Act. His Statement of Administration Policy indicates he believes the bill will aid job growth and capital formation in small businesses.
For More Information
For the latest advice on how these changes, if signed into law, can help your business grow, contact a member of Polsinelli Shughart PC's Corporate Finance and Securities practice group.