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The SEC’s Proposed Crowdfunding Rules

On October 23, 2013, the Securities and Exchange Commission (the “SEC”) proposed rules under the Jumpstart Our Business Startups Act (the “JOBS Act”) to permit companies to offer and sell securities through crowdfunding.1 Historically, because offers and sales of securities to the public generally require compliance with the registration requirements of the Securities Act of 1933 (the “1933 Act”), crowdfunding has been restricted to non-securities matters, for example, to solicit donations. Under the SEC’s proposed rules, Section 4(a)(6) of the 1933 Act will be a new registration exemption available for crowdfunding offerings under certain conditions.

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