Investment crowdfunding may finally get the fixes that advocates have long called for. On Wednesday, a sweeping collection of bipartisan bills known collectively as the JOBS Act 3.0 passed the House of Representatives with broad support. The package now moves to the Senate.
Sponsored by House Financial Services Committee Chairman Jeb Hensarling (R-TX) and Ranking Member Maxine Waters (D-CA), the “JOBS and Investor Confidence Act of 2018,” as it is officially called, contains several pieces of legislation that could dramatically boost the fledgling crowdfunding market.
They include allowing crowd investors to pool their money into funds or special purpose vehicles; extending the ability to “test the waters” as allowed under Regulation A to additional security offerings; allowing the creation of venture exchanges to trade crowdfunded securities; and, clarifying SEC rules so that startups can pitch their ideas and businesses at “demo days” and similar events without running afoul of securities laws.
In addition, JOBS Act 3.0 contains bills that would modernize the accredited investor definition to include individuals who, via their education or job experience, can evaluate investment opportunities but may not meet the financial threshold of the current definition, and clarify that family offices and their clients are accredited investors under Regulation D.
Other bills call for research into the unique challenges faced by rural businesses in accessing capital, the provision of investment research for small issuers, and the use of virtual currencies and online marketplaces for unsavory purposes such as sex or drug trafficking. There are also bills that ease rules for credit unions and non-bank financial institutions and help individuals build credit.
“JOBS Act 3.0 focuses on key pain points in the regulatory process, and provides new solutions and directs research so that our capital markets are the most modern and efficient for entrepreneurs and investors alike,” said Karen Kerrigan, president & CEO of the Small Business & Entrepreneurship Council (SBE Council), which has advocated for many of the changes.[…]
The full and original article can be viewed on Locavesting.com
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