On October 30, 2015, the SEC adopted final rules for Title III of the JOBS Act, more popularly known as equity crowdfunding and dubbed by the SEC as “Regulation Crowdfunding” (or “Reg. CRWD”). What should have been an exciting day for entrepreneurs and funding platforms will more likely be seen as a non-event in the annals of corporate finance history. The promise of equity crowdfunding was a world in which all investors, whether accredited or non-accredited, could participate in the securities offerings of promising start-ups (the “S” in Jumpstart Our Business Start-Ups of the JOBS Act’s title). The reality is that proponents of equity crowdfunding should be disappointed by the new Regulation, as the cost of compliance and ongoing reporting, the restrictions on intermediary communications and compensation, and the potential liability of those involved in Reg. CRWD offerings, coupled with the relatively low maximum offerings amounts and investment limitations, will make Reg. CRWD young companies’ least appealing option for an equity financing (registered or unregistered). Regulation Crowdfunding will be effective May 16, 2016. Read our full analysis on Reg. CRWD here.
Cybersecurity Information Sharing Act
The Cybersecurity Information Sharing Act (CISA) was signed into law this past Friday as part of the FY2016 Omnibus Appropriations Bill. This legislation is designed to encourage sharing of data between private companies and the government to prevent and respond to cybersecurity threats, and represents a compromise between the Senate bill passed in October 2015 and two complementary bills that passed the House in April 2015. There was significant debate over the appropriate limits for sharing consumer information and which federal agencies should be granted access to private sector data. CISA and its provisions will likely stay in the spotlight as cybersecurity remains a top concern for policymakers and private companies alike.