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How to use Regulation A+ to raise up to $50 million capital

How to use Regulation A+ to raise up to $50 million capital

When the Securities and Exchange Commission (SEC) approved the changes to Regulation A, it has generated lots of debate and discussion. The new rules on Regulation A+  took effect last  June 19th. The rules are expected to create a new category of quasi-IPO. This will enable companies to raise money from the public at less expense compared to a regular IPO.There are however some important points to keep in mind. The old Regulation A had such low limits for fundraising as well as high compliance costs that it was rarely used. The limit was only $5 million, and companies had to file offerings in every state in which they were selling the securities. The new Regulation A+ creates two categories namely, $20 million for the existing Tier 1, and a new Tier 2 – raising up to $50 million, of which $15 million can be offered to existing shareholders. Tier 2 ... Read More »

Will New Guidelines Bolster Family Offices? Or Become Their Kryptonite?

Will New Guidelines Bolster Family Offices? Or Become Their Kryptonite?

By David Drake In the past few years, several changes have been made in the family office regulatory environment. Family offices that were not registered with the US Securities and Exchange Commission (SEC) in 2011 had to reassess their acquiescence with the latter’s regulations, which restricted family offices qualifying for exemption of the Registered Investment Advisors. The Final Rule 275.202 (a)(11)(G)-1, that came to effect on 22 June 2011, outlined the family offices excused from registration requirements contained in the Investment Advisers Act of 1940, and amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act -“Dodd-Frank Act” in July of 2010. As Registered Investment Advisers, family offices are subject to SEC’s oversight, and are expected to observe SEC’s regulations and reporting requirements with regard to annual disclosures, compliance programs, record keeping, solicitation agreements, plus marketing and advertising. “This is important because investors are looking for a well-grounded, long-term ... Read More »

SEC Catapults Obama’s JOBS Act and Enables SMEs and Startups to Raise $50 Million through Regulation A+

By David Drake   In a bombshell announcement, the SEC has just released the final form of Regulation A+ rules relating to Title IV of the JOBS Act, under which it has priority over state regulation for Regulation A offerings up to $50 million and stipulates co-ordinated reviews for offerings up to $20 million. Companies on a fast growth trajectory will soon have the ability to raise up to $50 million by directly approaching unaccredited investors much like an IPO, providing a potent alternative to sources of institutional financing such as venture capital. Many people were convinced that Title IV was the most potent game changer in the JOBS Act but had serious concerns about the expense and complications of State securities law which would require securities to be registered in every state in which they are sold. However, in their draft release of the proposed rules in December 2013, ... Read More »

What Last Month’s SEC Ruling Means for Investors


Less than a month ago, the Securities and Exchange Commission lifted the advertising ban on private investments, which means that hedge funds can now promote their products to the general public. Let’s take a closer look at the SEC’s new ruling. The New Ruling According to the new SEC ruling statement that was issued on July 10, there is no longer any ban whatsoever on general solicitation and advertising on private placements. This means that, for hedge fund managers, a wealth of new opportunities has opened up – as well as new challenges. Marketing flexibility has now been expanded for managers of private hedge funds. Is It Good News? As of May of this year, broker-dealers are now required to file new reports with the SEC, ultimately meaning that there will be much more compliance with the Commission’s pre-established financial responsibility rules. These rules are designed to increase protections for ... Read More »

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