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Small investors could be permitted to invest in startups online under new U.S. Securities and Exchange Commission (SEC) rules:
America's financial watchdog says anyone with spare cash will be able to buy a slice of a startup online without having to fill out mountains of paperwork.
Until now, if you fancied plowing some of your savings into a fledgling biz — say a trendy but privately held San Francisco tech startup — there are all sorts of requirements and red tape you must overcome, all pretty much put in place after the 1929 US stock market crash.
Under new rules from the SEC, a startup can raise $1m a year by selling stock in itself to investors, although the individual amounts will be regulated. Those with an annual income of up to $100,000 can spend either $2,000 a year or five per cent of their net worth in startups, or 10 per cent if they make more than a hundred grand.
"There is a great deal of enthusiasm in the marketplace for crowdfunding, and I believe these rules and proposed amendments provide smaller companies with innovative ways to raise capital and give investors the protections they need," said SEC chairwoman Mary Jo White. "With these rules, the Commission has completed all of the major rulemaking mandated under the JOBS Act."
From the SEC release:
The new crowdfunding rules and forms will be effective 180 days after they are published in the Federal Register. The forms enabling funding portals to register with the Commission will be effective Jan. 29, 2016. [...] The SEC is seeking public comment on the proposed rule amendments for a 60-day period following their publication in the Federal Register.
(Score: 2) by gidds on Tuesday November 03 2015, @05:57PM
The last time we let the big corps persuade us that some century-old legislation wasn't needed and that financial markets are much safer now, we laid ourselves open to the Global Financial Crisis.
What would we be laying ourselves open to this time?
The requirements and red tape were put in place for a very good reason. Isn't it up to those who want change to prove (not just claim) that the reason no longer applies?
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(Score: 1) by khallow on Wednesday November 04 2015, @01:18AM
What would we be laying ourselves open to this time?
A golden age of business creation?
The requirements and red tape were put in place for a very good reason.
The reason was a bunch of patronizing idiots who took investing out of the hands of the common man for more than a half century until online trading opened things up again.
Isn't it up to those who want change to prove (not just claim) that the reason no longer applies?
I think it's telling that critics here can't even come up with a relevant reason in the first place.