Reprinted with the permission of The Legal Intelligencer.

On Oct. 23, the U.S. Securities and Exchange Commission (SEC) finally proposed rules to implement the crowdfunding provisions of the Jumpstart Our Business Startups Act of 2012 (JOBS Act). The crowdfunding provisions enable U.S. issuers to sell securities over the Internet without needing to register under the Securities Act of 1933, as amended. Crowdfunding is a new and evolving method of raising capital and has largely been successful in providing funding in the nonprofit sector, where it is sometimes referred to as crowdsourcing. Congress established a foundation for crowdfunding through the enactment of the JOBS Act in April 2012 and directed the SEC to adopt rules to implement the registration exemption provided by the statute by Dec. 31, 2012. As a result, these proposed rules from the SEC have been widely anticipated. ... 

 

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