Last week the US Securities and Exchange Commission issued an “investor bulletin” about its amendments to Regulation A made under the Jumpstart Our Business Startups (JOBS) Act of 2012. The introduction to the bulletin makes clear the changes were made “to enhance the ability of smaller companies to raise money.” One hopes that people actually read these, but who knows. Many of these “bulletins” are really more warnings about areas of investment concern. For cxample, in recent years SEC has issued bulletins about cannabis companies (mostly talking about the risks of investing in companies that are not SEC reporting) and reverse mergers (same concern).
With this bulletin, however, it really does seem like a straightforward informative piece about a new investment opportunity. They talk about the brilliantly designed multiple tiers of investment (Tier II has more reporting and disclosure obligations but avoids state blue sky oversight of the offering), walks through limitations on investments by non-accredited investors, and reminds folks to actually read the offering statement that the SEC will be carefully reviewing and approving.
As each step in the process of the Reg A amendments (Tier II is now generally referred to as Regulation A+) develops, we are seeing an SEC that appears truly willing, even anxious, to encourage smaller companies to use the new amended rules. This is good. Now we continue the education effort on Wall Street as the sharp minds sharpen their pencils to put deals together under the new rules.