The Securities and Exchange Commission recently published its report on the Government-Business Forum on Small Business Capital Formation, which generates recommendations from participants that the SEC considers. The recommendations from participants included, among others, the following:
- Expand the accredited investor definition to achieve greater diversity among startup investors and entrepreneurs,
- Expand the accredited investor definition to include additional measures of sophistication,
- Harmonize the annual reporting requirements for issuers that utilize different exempt offering alternatives, like Regulation A and Regulation Crowdfunding,
- Collaborate with market experts to establish a regulatory framework for finders that includes an exemption from broker-dealer registration and helps facilitate small business capital formation,
- Allow non-accredited investors to participate in venture capital funds,
- Increase the number of investors allowed in 3(c)(1) funds, and
- Improve public trading for small companies by requiring more disclosures about short selling, institutional holdings, insider and affiliate holdings and transactions, etc.
The full report is available here.