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SEC's Final Regulations for Implementing JOBS Act Crowd-Funding Capital Raising

By Thomas D. Selz
May 02, 2015

In December 2013, the U.S. Securities and Exchange Commission (SEC) issued draft regulations for implementing Title IV of the JOBS Act in order to expand the potential use of Regulation A in offerings to raise capital. The draft regulations carried forward the old Regulation A with its limit of $5 million, as a so-called “Tier 1″ offering. But because the old Reg. A was rarely used, a proposed new “Tier 2″ offering option to raise up to $50 million quickly came to be referred to as Regulation A+.

On March 25, 2015, the draft regulations were finalized. They become effective on June 19, 2015. The new regulations offer a way for an issuer to run an Internet-based, crowd-funding securities offering to both accredited and non-accredited investors. Because the SEC made significant changes in the final regulations when compared to the draft regulations, creating significant differences between a Tier 1 and a Tier 2 offering, it now seems more appropriate to refer to a “Tier 1″ offering and a “Tier 2″ offering, rather than to a “Regulation A” and a “Regulation A+” offering.

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