The SEC has finally proposed its rules to allow crowd-funding under the Jumpstart Our Business Startups (JOBS) Act. What do they mean for small-scale investments in renewable energy companies and projects?
Title III of the JOBS Act created an exemption under securities laws for crowdfunding, which set the table for its regulation by the SEC — that was supposed to happen by the end of last year. Two weeks ago the SEC finally issued its proposed rules on crowdfunding (summary here, full 500+-page PDF here). Here are the highlights:
- Companies are capped at raising $1 million cap per year through crowdfunding.
- Investors with less than $100,000 annual income and net worth, could invest up to $2,000/year or 5 percent of annual income or net worth (whichever is greater).
- Investors with at least $100,000 annual income and net worth, investment amount levels rise to 10 percent of annual income or net worth (whichever is greater), and purchase no more than $100,000 of securities through crowdfunding.
- Non-U.S. companies are ineligible for the crowdfunding exemption, as are companies that already report to the SEC, some investment companies, those who aren\’t compliant with certain reporting rules, and others with no business plan or pending M&A deals.
- Securities purchased via crowdfunding can\’t be resold for a year.
- Under the proposed rules, issuers publishing notices advertising an offering can include terms: the nature and amount of securities offered, their pricing, and the closing date of the offering period.