SEC Extends Relaxation of Certain Crowdfunding Rules through February 28, 2021; Updated Fees for SEC Filers
On August 28, 2020, the SEC adopted temporary final rules extending the effectiveness of previously-adopted temporary relief from certain requirements of Regulation Crowdfunding to facilitate capital formation for small businesses impacted by COVID-19.
As stated in the SEC’s synopsis, “The temporary final rules are intended to expedite the offering process for smaller, previously established companies directly or indirectly affected by COVID-19 that are seeking to meet their funding needs through the offer and sale of securities pursuant to Regulation Crowdfunding. The temporary final rules are designed to facilitate this offering process by providing tailored, conditional relief from certain requirements of Regulation Crowdfunding relating to the timing of the offering and the availability of financial statements required to be included in issuers’ offering materials while retaining appropriate investor protections.”
For a more detailed discussion of the temporary final rules as originally adopted on May 4, 2020, see this previous update. Originally applicable to offerings launched on or before August 31, 2020, the SEC’s latest action extends this window through February 28, 2021.
Separately, on August 26, 2020, the SEC issued a fee advisory, setting the filing fees that public companies and other issuers will pay in fiscal year 2021 to register their securities with the SEC. Effective October 1, 2020, the fees paid under Section 6(b) of the Securities Act of 1933 to register securities will decrease from $129.80 per million dollars to $109.10 per million dollars, a decrease of 15.9 percent. For example, a company registering $10 million of common stock will see their registration fee decrease from $1,298 to $1,091.