STATUTORY BASIS AND TEXT OF AMENDMENTS
INTRODUCTION
On December 18, 2013, we proposed rule and form amendments17 to implement Section 401 of the Jumpstart Our Business Startups Act (the “JOBS Act”).18 Section 401 of the JOBS Act amended Section 3(b) of the Securities Act by designating existing Section 3(b) as Section 3(b)(1), and creating new Sections 3(b)(2)-(5). Section 3(b)(2) directs the Commission to adopt rules adding a class of securities exempt from the registration requirements of the Securities Act for offerings of up to $50 million of securities within a 12-month period. Sections 3(b)(2)-(5) specify mandatory terms and conditions for such exempt offerings and also authorize the Commission to adopt other terms, conditions, or requirements as necessary in the public interest and for the protection of investors.19 In addition, Section 3(b)(5) directs the Commission to review the $50 million offering limit specified in Section 3(b)(2) not later than two years after the enactment of the JOBS Act and every two years thereafter, and authorizes the Commission to increase the annual offering limit if it determines that it would be appropriate to do so. Accordingly, we are revising Regulation A under the Securities Act to require issuers conducting offerings in reliance on Section 3(b)(2) to comply with terms and conditions established by the Commission’s rules, and, where applicable, to make ongoing disclosure.
17 See Rel. No. 33-9497 [79 FR 3925] (Dec. 18, 2013) (the “Proposing Release”), available at: http://www.sec.gov/rules/proposed/2013/33-9497.pdf.
18 Pub. L. No. 112-106, 126 Stat. 306.
19 We are adopting a number of terms and conditions for Regulation A offerings pursuant to our discretionary authority under Sections 3(b)(2)-(5). Where we have done so, as discussed in detail in Section II. below, it is because we find such terms and conditions to be necessary in the public interest and for the protection of investors.