SEC’s Atkins seeks changes to crowdfunding regulations

Investing.com -- The Securities and Exchange Commission is developing changes to crowdfunding regulations, Chairman Paul Atkins said Tuesday at the agency's Small Business Capital Formation Advisory Committee meeting.

Atkins said he has directed SEC staff to assess which parts of Regulation Crowdfunding can be modified to lower compliance costs and make the rules more appealing for both companies and investors.

The planned changes are part of broader SEC efforts to increase retail investor access to private investments and strengthen capital formation in the United States. In September, the SEC proposed modifications to the definition of "accredited investor" for purchasing shares in privately-held companies.

Since the crowdfunding rules took effect in 2016, approximately 9,850 crowdfund offerings have been completed through June 30.

At the meeting, Atkins also repeated his intention to revise rules that govern company communications with potential investors during the initial public offering process. He said his focus includes providing more clarity on gun jumping rules, which restrict marketing and investor communications during three separate stages of the IPO pipeline. These rules aim to prevent companies from inflating the value of their securities and to ensure all potential investors receive the same information.

Crowdfund Capital Advisors, an advisory firm, requested earlier this year that the SEC increase the crowdfunding cap to $20 million per offering from the current $5 million limit. The firm stated that the existing cap requires companies seeking larger investments to complete multiple funding rounds.

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