SEC relaxes crowdfunding rules for 10 months

The U.S. Securities and Exchange Commission is implementing a rule that relaxes restrictions on crowdfunding through next February, according to a Federal Register notice published today. The net result of the temporary rule is to accelerate the timeline for a company to access capital through crowdfunding, at the expense of some public access and investor information.

Specific changes include: allowing companies to make offers before providing financial statements; financial statements will no longer require independent validation; and, sales can occur without holding the solicitation publicly for 21 days. Companies wishing to utilize these rules must qualify for crowdfunding and have been organized and in operation for at least six months before making the offering.