On November 2, 2020, the Securities and Exchange Commission adopted amendments to expand Regulation Crowdfunding by increasing offering limits, revising certain investment limits and permitting the use of certain special purpose vehicles. The Commission largely adopted the amendments as proposed on March 4, 2020. The Commission’s press release announcing the adopted changes are available here and the final amendments are available here. The adopted amendments will make the following changes to Regulation Crowdfunding:
In 2019, Commission staff conducted a study to compile and review available information on the capital formation and investor protection impacts of Regulation Crowdfunding. The 2019 Regulation Crowdfunding Report is available here. The study found that during the considered period, the number of offerings and the total amount of funding were relatively modest, with issuers raising $108 million under Regulation Crowdfunding from May 16, 2016, through December 31, 2018. The Commission increased the offering limit under Regulation Crowdfunding with the intent to encourage more issuers to use the exemption and to lower the offering costs per dollar raised.
The amendments will be effective 60 days after publication in the Federal Register, except for the extension of the temporary Regulation Crowdfunding exemption, which will be effective upon publication in the Federal Register.
Overview of Amended Crowdfunding Exemption