Securities and Exchange Commission Guidance

The Securities and Exchange Commission (SEC) has released a staff statement to facilitate Main Street capital investment in Opportunity Zones. In addition to providing that statement, the SEC has worked with the North American Securities Administrators Association (NASAA) to describe the compliance implications for Qualified Opportunity Funds under Federal and state securities laws. You can find the staff statement here.

The Securities and Exchange Commission has also proposed amendments that would simplify and improve the capital raising framework that Qualified Opportunity Funds currently use to invest in entrepreneurs. The proposed amendments are intended to promote capital formation and expand investment opportunities while preserving and enhancing important investor protections. The proposed amendments would, among other things:

  • increase annual offering limits for several exemptions from registration, including allowing companies to raise up to $5 million using Regulation Crowdfunding and $75 million using Regulation A;
  • harmonize certain disclosures that are provided to investors;
  • create new pathways for entrepreneurs to “test-the-waters” to gauge market interest prior to incurring offering expenses; and
  • reduce complexities across the offering framework by consistently defining and clarifying the ability of entrepreneurs to use more than one exemption from registration, concurrent or in successive capital-raising rounds, without those being considered a single offering.

More information about the proposed amendments is available here and you can share your feedback with us here.