SEC Seeks Input as Part of Securities Exemption Policy Review

Jul 10, 2019 | Blog

The Securities and Exchange Commission (SEC) has recently issued an open call for comments on how to improve its policies regarding private securities offerings that are exempt from SEC registration. In a concept release posted at the end of June, the SEC stated that it was looking for “possible ways to simplify, harmonize, and improve the exempt offering framework to promote capital formation and expand investment opportunities while maintaining appropriate investor protections.”

The Securities Act of 1933 outlines the conditions to be met for a securities transaction to be deemed exempt from registration, while also detailing the requirements investors must meet in order to purchase these exempt securities. Since the 1930s, multiple exemption requirements have been introduced, broadened, and altered significantly via subsequent pieces of legislation. The SEC has therefore decided to comprehensively review its exemption framework to update and improve its many regulations, ideally creating a more cohesive and effective regulatory structure.

The SEC is accepting suggestions from the public on the best ways to revise these exemption policies, hoping that outside input from companies, investors, and entrepreneurs will help create “a framework that is more consistent and addresses gaps and complexities.” Among other things, the Commission is specifically seeking feedback concerning:

  • Appropriate levels of investor protection
  • Appropriate levels of access to the market
  • Redundancies or gaps that make it difficult to achieve exemption status
  • General consistency of the exemption framework
  • The SEC’s role in securities offerings’ integration
  • The SEC’s role in the use of pooled investment funds

The comment period runs through September 24th, 2019. Comments can be submitted via online comment form, email, or U.S. postal service. If you have any questions regarding the requirements for  issuing or purchasing exempt securities, please contact William A. Newman.