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Crowdfunding update: Title III vote upcoming

Estimated reading time: 1 minutes, 33 seconds

In a previous post, we updated you on the status of crowdfunding as it pertains to recent action taken on Title II and Title IV of the 2012 JOBS Act. As we mentioned, the SEC has yet to take action on the last piece of the puzzle, Title III, often called the “crowdfunding” exemption of the JOBS Act.

On October 9, 2015, FINRA filed “Proposed Rule Change to Adopt the Funding Portal Rules and Related Forms and FINRA Rule 4518,” which you may read here. Many in the equity and debt crowdfunding industry viewed this as a critical step toward the SEC potentially adopting/issuing Title III rules.

The SEC will now vote on Final Rules for Title III this Friday, October 30, 2015.

SECWhat this could potentially mean for the equity and debt crowdfunding industry is that non-accredited investors would be able to invest in or lend money to businesses of all types. A public meeting vote on the final rules does not guarantee adoption or end the process, however. Before any rules are live, they have to be published in the federal register, usually going live 60 days after the vote.

The crowdfunding industry is estimated to surpass venture capital next year, and an adoption of non-accredited rules could significantly impact those estimations. More and more companies may be on the verge of funding as a result of non-accredited investors gaining access to early-stage deals previously accessible only to VCs and angel investors.

If you’re an individual investor interested in opening a Crowdfunding IRA and take advantage of our low account fees and simple online account opening process, click here to open a new Kingdom Trust account. Or if you’re an issuer looking into crowd financing options for your offering, visit our Investment Sponsors page to learn more about our solutions and to schedule a call with a member of our Business Development staff.

 

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