SEC Adopts Final Crowdfunding Rules under the JOBS Act

November 12, 2015

On October 30, 2015, the U.S. Securities and Exchange Commission (SEC) adopted final rules under Title III of the JOBS Act to enable U.S. companies to offer and sell securities through crowdfunding (Regulation Crowdfunding). This alert provides an overview of the SEC crowdfunding rules slated to become effective in early May 2016, with certain related forms, such as Form Funding Portal (which will be used to register as a funding portal), becoming effective at the end of January 2016.

Generally, Regulation Crowdfunding implements a JOBS Act exemption for certain activities related to crowdfunding from the registration requirements of the U.S. Securities Act of 1933 (Securities Act), subject to investment limitations on investors, as well as disclosure requirements for issuers and intermediaries engaged in crowdfunding transactions. The JOBS Act also exempts certain crowdfunding intermediaries (funding portals) from broker-dealer registration under the U.S. Securities Exchange Act of 1934 (Exchange Act).

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