SEC to review rules for crowdfunding, Atkins says

What happened

SEC Chairman Paul S. Atkins said Tuesday he has directed the agency to review ways to cut compliance burdens and improve crowdfunding rules to attract issuers and investors. Regulation Crowdfunding, adopted in 2015, has hosted more than 9,800 offerings raising an average of $364,000.

Confirmed

Global impact / market context

Easier crowdfunding rules could let small firms raise money from many small investors at lower cost, which means more funding options for startups that banks or public markets may not serve. Lower compliance costs may also lift the number of offerings.

Analyst inference

The review sits inside a wider SEC push to open private markets, such as new paths to accredited investor status, optional semiannual reporting, simpler filer categories, and IPO modernization. These steps aim to reduce regulatory friction and encourage firms to go and stay public.

Analyst inference

What to watch

1. Atkins said he is seeking more ways to reach accredited investor status, which means qualifying to buy private offerings, including by passing a Financial Industry Regulatory Authority exam. Confirmed
2. The SEC is considering optional semiannual reporting, simplification of filer status, and registered offering reform, which means changing how companies file and sell securities publicly. Proposed
3. Staff are re-evaluating limits on communications and who issuers may contact, so clearer lines on what counts as an offer could affect how crowdfunding deals are marketed. Analyst inference

Evidence

• seekingalpha.com