Expanding the categories of qualification for accredited investor status topped the list of recommendations from the 36th annual SEC Government-Business Forum on Small Business Capital Formation, according to the just released final report. The SEC holds this forum annually as mandated by the Small Business Investment Incentive Act of 1980.
The invitation-only forum was held at The University of Texas at Austin and included opening remarks by SEC Chairman Jay Clayton, SEC Commissioner Kara Stein and SEC Commissioner Michael Piwowar.
“Small businesses contribute significantly to US job creation,” explained SEC Chairman Jay Clayton in his opening remarks. “And hearing views directly from the small business community provides us with greater insight into how our capital markets may better facilitate capital formation - without compromising important investor protections.”
“When investors are protected, their willingness to invest increases, which positively impacts the overall funding environment for our small and emerging businesses,” added SEC Commissioner Kara Stein.
The forum was divided into two main breakout groups: one on exempt securities offerings and another on smaller registered and Reg A securities offerings. Each group was asked to return 10 recommendations to the SEC staff.
Top 5 Recommendations Included:
- Expansion of the categories of qualification for accredited investor status
- Revising Regulation A securities by allowing at-the-market offerings and increasing the maximum offering amount to $75 million
- Coordinating with FINRA to provide clearer guidance to Crowdfunding offerings
- Removing the investment cap of accredited investors and increasing the investment cap for all other investors in Crowdfunding offerings
- Increasing the offering limit for Crowdfunding offerings to $5 million annually