On December 9, 2021, the SEC Office of the Advocate for Small Business Capital Formation released its 2021 annual report condensing a treasure trove of data related to exempt and registered offerings by small businesses for the period July 1, 2020 to June 30, 2021 and providing related policy recommendations to support such businesses.
The SEC’s new release amends the rules governing “integration” permitting private placements and registered public offerings to occur shortly before, after or at the same time with each other. The amendments replace the SEC’s prior five-factor test with practical updates for today’s markets that particularly benefit smaller publicly traded companies.
The SEC proposes rules to add a new category for individuals to qualify as accredited investors based on professional certifications and designations or credentials that show “financial sophistication.” The SEC requests public input on exactly which industry exams, academic degrees and levels of job experience should be considered.
Originally targeted toward venture capitalists, SAFEs are increasingly being sold to retail investors through crowdfunding offerings.