It’s official: the new Regulation Crowdfunding rules will become effective on May 16, 2016. The SEC’s final rules release of October 31, 2015 provided that, with certain exceptions, the new rules will go into effect 180 days after they are published in the Federal Register. We just learned that the rules were published in the Federal Register on November 16, and that, accordingly, they will become effective on May 16, 2016.
So mark your calendars. May 16, 2016 will be the first day that companies will be able to file Form C, the offering statement mandated by the SEC for Regulation Crowdfunding offerings. But because of the requirement that disclosure be made publicly available on the intermediary’s platform for a minimum of 21 days before any securities are sold in an offering, however, the first Regulation Crowdfunding closings will not take place until at least June 6, 2016.
An important exception to the May 16, 2016 effective date relates to registration of funding portals, the relevant effective date for which remains January 29, 2016. That means that funding portals, one of the two types of intermediaries (the other being registered broker-dealers) that will be permitted to operate online platforms for securities transactions under Regulation Crowdfunding, could begin filing their registration form, called Form Funding Portal, on January 29, 2016. The reason for the staggered effective dates is to provide a level playing field between broker-dealers, who would already be registered and possess built-in infrastructure, and “funding portals”, the newly designated category of intermediary that will need to register with the SEC as funding portals and develop infrastructure. I’ll be blogging about what the new Regulation Crowdfunding means for funding portals in my next post.
You can find my initial reaction to the new Regulation Crowdfunding rules here.