Last year, in an effort to give companies more flexibility to engage in intrastate offerings through websites and social media without having to register their securities offerings with the federal government, the Securities Exchange Commission (“SEC”) created a new exemption and also amended Regulation D. Combined, these two actions will help facilitate intrastate offerings as well as the development of regional offering exemptions at the state level. On February 17, 2017, the SEC and the North American Securities Administrators Association (“NASAA”) signed the Memorandum of Understanding(“MOU”). The information-sharing agreement, which was created as the new rules surrounding intrastate crowdfunding offerings and regional offerings went into effect, allows federal and state securities regulators to monitor the effects of the new rules.According to SEC Acting Chairman Piwowar, the recent information-sharing agreement“not only builds on an already productive relationship between the SEC and state regulators, it also offers additional insights and protections as we help companies grow and create jobs while providing new opportunities to investors.”With this agreement, the regulators can better ensure that the new exemptions make capital more accessible for small businesses and entrepreneurs.Mike Rothman, Minnesota Commissioner of Commerce and President of NASAA, said, “This agreement will strengthen collaboration among state and federal securities regulators to help expand small-business investment opportunities while also protecting investors.” He went on to state, “Ongoing dialogue is essential to carry out our responsibilities going forward. With this MOU in place, we have an opportunity to share information that will bolster our efforts to support small business capital formation and prevent fraud.”JLG believes that it is important for small businesses to get the opportunity to participate in crowdfunding. But there are many regulatory considerations that must be considered. If you have questions or would like to discuss how the MOA affects you or your business, please call us at 619.298.2880 or contact us online.
