After 3 ½ years of sitting in rulemaking purgatory, the SEC is finally voting on the rules for Title III crowdfunding (or retail crowdfunding, investment crowdfunding, equity crowdfunding… it has several names at this point). That’s… great news for the bourgeoning industry that’s been waiting on these rules for so long, but we still have no idea exactly how this whole thing is going to pan out.
Rules to modify Regulation A (Title IV) and to allow general solicitation (Title II) passed with little hesitation by the Commission, but Title III has been a completely different story. In short, too many people with too much power have argued that the average American isn’t capable of finding good investments in the private markets and others actually listened to them. There’s been so much back and forth with how this law should be structured that, until now, most have pretty much written it off and felt like it’s never going to happen. Even with the today’s announcement from the SEC, the rule’s naysayers could still be right.
According to the outline of Friday’s meeting, the Commission will:
- Consider whether to adopt rules and forms related to the offer and sale of securities through crowdfunding under Section 4(a)(6) of the Securities Act of 1933, as mandated by Title III of the Jumpstart Our Business Startups Act.
- Consider whether to propose amendments to Securities Act Rule 147 and Rule 504.
Consider… The SEC will consider enacting something that’s been on the table for nearly four years. What a time to be alive.
Ultimately, no one is going to know anything of substance until Friday afternoon so all we can do now is sit, wait, and see if this is going to be the real turning point for alternative finance in America.