Did You Miss this Major SEC News? We’re Breaking It Down for You Here
By any measure, this has been an absolutely bizarre week.
Between the ongoing GameStop battle between Redditors and institutional hedge funds, the stock market seeing one of its worst days since October, big name companies reporting massive earnings, and Robinhood restricting trading on popular stocks and coins, it’s been hard to keep track of it all.
But there’s one more piece of news out there that’s just as important.
It’s been lost in the shuffle of this week’s craziness, but as angel investors, it’s one of the most crucial pieces of news to keep on your radar right now.
It all has to do with the Securities and Exchange Commission.
In one of its last moves before the fall election that put Joe Biden into the presidency, the SEC announced a series of changes that would change certain aspects of Regulation Crowdfunding (CF) for investors. When these regulation changes were first announced, they were proposed to go into action in January 2021. Here’s what they changed:
- Non-accredited investors would be able to base their investment limits on the higher of 10% their net worth or their income.
- Companies launching a Reg. CF campaign would be able to advertise their raises before officially going live.
- And the SEC would increase the maximum Reg. CF raise limit for startups from $1.07 million to $5 million.
These rules were not published to the Federal Register until January 14th, 2021. Because final rules aren’t effective until 60 days after they’re published, these changes would not have been effective until mid-March.
On January 15th, however, the Biden administration received a memorandum asking them to “suspend any midnight regulations by the Trump administration,” and to “postpone the effective dates of rules at least 60 days that have already been published in the Federal Register but which have not yet taken effect.”
Essentially, this means that the Chairwoman of the House Committee on Financial Services, Maxine Waters, has asked Biden to review the proposed SEC regulatory rule changes. Biden has agreed.
Now, there are two things that could happen with this regulation change delay…
- The Biden administration could make no changes and none of the crowdfunding proposals will change.
- Or the Biden administration will decide to change or rollback some of the previously proposed regulations.
What happens next likely depends on who reviews these rule changes.
Biden appointed former Goldman Sachs investment banker and financial regulator Gary Gensler to head the SEC. Currently, he teaches courses on digital currency and blockchain technology at MIT’s Sloan School of Management. Acting SEC Chair Allison Herren Lee would review these regulation changes if Gensler isn’t approved by the Senate in time.
It’s hard to say what’s going to happen next with this. Of course, we hope that they’ll choose to approve these changes, which would make crowdfunding an even more attractive option for incredible companies looking to fund their ventures.
We’ll be sure to keep you in the loop on the latest changes from the SEC. But rest assured, we have plenty of amazing opportunities coming down the line very soon… and I still believe that 2021 is one of the best years on record to be a startup investor.
It’s also a great year to learn how to invest in some of the highest potential stocks on the public market.
Take Shah Gilani’s picks, for example. He’s one of the country’s top stock experts, and he’s eyeing a potential $2.9 trillion economic event that could be underway by January 31st.
This economic event could launch a massive surge for five different tech stocks over just the next 18 months, and the people who get in before the event kicks off will be the ones who potentially see the biggest gains.
You only have one more day to get all the information you need, so don’t wait.
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I’ll be back soon with another update.
Until next time,