Specifically, the changes have eliminated the necessity of a few documents that can be tricky for businesses to get ahold of, in the current worldwide situation, including financial statements.
Nonetheless, companies are still obligated to submit all required requisite documentation prior to trying to seek commitments from investors.
These temporary changes have reportedly been suggested by the SEC’s Small Business Capital Formation Advisory Committee, and have been approved on May 4th, after a voting round concluded with a 4-0 in favor, and will reportedly last till August 31.
The new changes reportedly further allow for fundraising to be conducted that fall between the $107,000 and $250,000 zone, as well as 12 months of proceeding period, using legal papers with certifications from the CEO, rather than the accountant.
“In the current environment, many established small businesses are facing challenges accessing urgently needed capital in a timely and cost-effective manner” SEC chairman Jay Clayton reportedly claimed.
Companies who reportedly are having plans to utilize the newly amended rules are required to “provide clear, prominent disclosure to investors about its reliance on the relief”, and any firms that are established within a 6-month timeframe, and ones that are unsuccessful to stay in compliance with the Securities Act of 1933 and Regulation Crowdfunding guidelines will not be qualified for the changes.