Compliance Newsflash for March 11, 2020 – SEC Proposes Rule Changes to Harmonize, Simplify and Improve the Exempt Offering Framework

The Securities and Exchange Commission today announced that it has voted to propose a set of amendments that would harmonize, simplify, and improve the exempt offering framework to promote capital formation and expand investment opportunities while preserving and enhancing important investor protections.
Offerings of securities must be either registered with the Commission or qualify for an exemption from the Commission’s registration requirements. A majority of entrepreneurs and emerging businesses raise capital using the exempt offering framework. This capital formation activity ranges from seed capital for new businesses to growth capital for companies on the path to an initial public offering. The proposals are the most recent step in the Commission’s ongoing efforts to assess the capital raising framework as a whole and improve it for the benefit of investors, entrepreneurs, and more seasoned issuers.

Compliance Newsflash for March 11, 2020 – SEC plans Step-Up of Reg BI Enforcement Amid Stretched Resources

The SEC will begin taking a hard look at how the new Regulation Best Interest is informing the product recommendations that brokers make early next year – a significant step up from the implementation exams that will start as soon as the rule takes effect at the end of June, a senior SEC official said. In the interim, brokers and advisors can expect more clarifying guidance on how their firms will be expected to implement the various aspects of the rulemaking package, including publication of risk alerts on Reg BI and the Form CRS relationship summary “very soon” – likely later this month – according to Peter Driscoll, the director of the SEC’s Office of Compliance Inspections and Examinations.