United States Securities Exchange Commission (SEC) published companies waiting to meet full public reporting requirements
The United States Securities Exchange Commission (SEC) has published that it is looking for different ways to spread the classification of “accredited investor,” with powerful major implications for capital formation of companies waiting to meet full public reporting requirements.
The amendments and who gets to be accredited
The regulator is searching for public commentary on amendments to its category of accredited investor, according to December 18 announcement on the SEC’s website. The SEC’s language defines a standard investor as a person with a net worth of over one million dollars or an entity handling over five million dollars in assets. Other means of identifying include being an executive at the firm making the offering.
The problem of who qualifies as a standard investor has long been controversial. Securities Exchange Commission immunity permits firms to give shares to such investors without necessarily meeting all the filing conditions wanted by the SEC of companies listing publicly. it is designed to guide the everyday investors from exploiting offerings, but criticism against these classifications says that such immunity just helps the rich to get richer while forbidding main-street investors from wealth formation.
The new reformation would, by and giant, open up the classification to new investors, likes of those whose certifications and professional qualifications implies that they are educated enough to invest in private offerings. Similarly, “educated employees” may be allowed the same access to their companys’ offerings as executives currently have.
What are these exemptions and what do they mean for cryptocurrency?
The SEC guess that in 2018 investors raised roughly $2.9 trillion under various immunity, midgeting the $1.4 trillion in all offerings registered with the SEC. The standard investor category applies to immunities 506(b) and 506(c), both of which fall under Regulation D. The SEC said that companies raised $1.5 trillion in exempt offerings filed using 506(b) alone in 2018.
As the SEC has elaborated its pursuit of initial coin offerings (ICOs) that it is likely to be illegal securities offerings. Only today wanting Blockchain of Things to go up to $13 million raised in their ICO to investors, Reg. D exemptions.
Telegram is seeking to use 506(c) in its $1.7 billion offering of TON tokens. The company further blamed the SEC of bad delays in processing Telegram’s Reg. D filing, saying that ”the SEC’s instant application is an ‘emergency’ of its own making.”