The SEC has scheduled an extra long 180 days for implementation in order to permit new portals to comply with the rules.
A quick summary of the rules:
1. Permits a private company to raise up to $1 million in a 12-month period.
2. Offering must be conducted through a broker-dealer or registered funding portal.
3. Issuer must disclose its information on a new Form C.
4. Depending on the size of the offering, historical financial information may be required and may need to be reviewed or audited by independent accountants.
5. Investor’s investment amount will be limited based on the investor’s annual income or net worth.
6. There are issuer post-offering reporting obligations to the SEC.
7. The funding portals, themselves have procedural rules to follow.
For an easy to read summary of the new rules provided by The SEC Law Firm, click here.
To read the SEC press release, click here.