On June 18, 2019, the Securities and Exchange Commission (the “SEC”) issued a concept release requesting public comment on ways to simplify, harmonize and improve the exempt offering process to expand investment opportunities while maintaining investor protections. The concept release solicits public input on whether changes should be made to improve the consistency, accessibility and effectiveness of the current exemptions from registration for both companies and investors, including identifying potential overlaps or gaps within the framework. In particular, the concept release asks commenters to consider whether:

  • The limitations on who can invest in certain exempt offerings, or the amount they can invest, provide an appropriate level of investor protection or pose an undue obstacle to capital formation or investor access to investment opportunities;
  • The SEC should take steps to facilitate a company’s ability to transition from one form of exempt offering to another or to a registered offering;
  • The SEC should expand companies’ ability to raise capital through pooled investment funds;
  • Retail investors should be allowed greater exposure to growth-stage companies through pooled investment funds, such as interval funds and other closed-end funds; and
  • The SEC should revise its exemptions for secondary trading of securities initially issued in exempt offerings.

The public comment period for the concept release will remain open for 90 days. The concept release can be found here.