SEC© issues new and revised guidance on intrastate crowdfunding

Publisher: Morrison Foerster LLP
Author: Ze’-Ev Eiger

On April 10^th, 2014, the Division of Corporation Finance of the SEC© issued one revised and two new compliance and disclosure interpretations regarding crowd funding and Rule 147 under the Securities Act of 1933, as amended, which are summarized in the full article here.

Section 3(a)(11) of the Securities Act (“Section 3(a)(11)”) provides an exemption from the registration requirements of the Securities Act for any security which is a part of an issue offered and sold only to persons who reside in a single state or territory, where the issuer of such security is a person resident and doing business within or, if a corporation, incorporated by and doing business within, such state or territory. Rule 147 under the Securities Act (“Rule 147”) provides a safe harbor for offerings conducted pursuant to Section 3(a)(11), which requires that the issuer must be a resident of, and doing business in, the same state in which all offers and sales are made, and the offering may not be offered or sold to non-residents.

What is your opinion on the new and revised guidelines on intrastate crowd funding?