SEC Rule to Simplify Exempt Offering Framework for Small Firms
On Nov. 2, 2020, the U.S. Securities and Exchange Commission (SEC) adopted final rules to simplify the exempt offering framework. The SEC’s goal with these amendments was to “simplify, harmonize, and improve certain aspects of the exempt offering framework to promote capital formation while preserving or enhancing important investor protections.”. More Specifically they aimed to:
- Address the ability of issuers to move from one exemption to another;
- Set clear and consistent rules governing offering communications between investors and issuers;
- Address potential gaps and inconsistencies in their rules relating to offering and investment limits; and
- Harmonize certain disclosure requirements and bad actor disqualification provisions.