Regulatory Update: REG CF RULE AMENDMENTS – EFFECTIVE MARCH 15, 2021

Great News and a Big Day for the industry!

The rule amendments to Reg CF (and other SEC rules) have been filed in the Federal Register this morning!

As previously discussed, the amendments to Regulation CF will be effective 60 days from today, which makes the effective date March 15, 2021.

• The Rule Effective Date is: 03/15/2021

• Publication Date: 01/14/2021

• Final Rule: https://www.federalregister.gov/documents/2021/01/14/2020-24749/facilitating-capital-formation-and-expanding-investment-opportunities-by-improving-access-to-capital

• Document Citation:  86 FR 3496

• Agency/Docket Numbers:

• Release Nos. 33-10884; 34-90300; IC-34082

• File No. S7-05-20

• RIN: 3235-AM27

• Document Number:2020-24749

SUMMARY

This effects Reg A, Reg D, Reg CF and other rules related to capital raises.  For Regulation Crowdfunding (Reg CF), the amendments include:

• raising the offering limit in Regulation Crowdfunding from $1.07 million to $5 million;

  • amend the investment limits for investors in Regulation Crowdfunding offerings by:

  • removing investment limits for accredited investors; and

• using the greater of their annual income or net worth when calculating the investment limits for non-accredited investors; and

• extending for 18 months the existing temporary relief providing an exemption from certain Regulation Crowdfunding financial statement review requirements for issuers offering $250,000 or less of securities in reliance on the exemption within a 12-month period.

The following link provides a summary of the forthcoming amendments: https://www.sec.gov/news/press-release/2020-273

The final rule linked here details the amendments specifically:  https://www.sec.gov/rules/final/2020/33-10844.pdf