On December 18, 2013, the Securities and Exchange Commission (SEC) proposed rules to enhance access to capital by smaller companies pursuant to its rulemaking mandate under Title IV of the Jumpstart Our Business Startups Act (JOBS Act). Title IV of the JOBS Act created a new exemption under section 3(b)(2) of the Securities Act of 1933, as amended (Securities Act), for smaller offerings. As directed by section 3(b)(2), the proposed rules would amend and update the existing Regulation A, an exemption for unregistered public offerings of securities up to $5 million.
The long-awaited proposed rules represent the last significant SEC rulemaking under the JOBS Act. The amended Regulation A, commonly referred to as “Regulation A+,” is intended to facilitate capital formation for small companies by addressing certain impediments in the current Regulation A that have deterred companies from using Regulation A to raise funds, including the low maximum offering amount and the high costs of state blue-sky compliance requirements.