Sure the deadline has passed for comment letters regarding Title III of the JOBS Act or Regulation CF as some now call it. But as will happen – they continue to trickle in while the staff at the SEC ruminate on how final rules should look.
Recently – as in April 29th – the junior Senator from the state of Oregon shared his opinion on retail crowdfunding. Senator Jeff Merkley, who happens to sit on both the Appropriations and the Committee on Banking, Housing and Urban Affairs, expressed his concern regarding the need to protect investors from themselves.
Senator Merkley urged the commission to move forward with the “experiment”, while offering several comments on the proposed rules including:
- Investment Caps Must Be Tightened Significantly
- Corporate Governance and Antidilution Protections Should Be Strengthened
- Timeliness of Financial Statements Should be Tightened
- The Commission’s Safe Harbor on Investment Advice Should Be Maintained
- Funding Portals Must Ensure Compliance With Crowdfunding Rules
- The Commission Should Monitor The Market and Adjust Quickly If Problems Emerge
Industry followers will be well aware of the ongoing debate and concern that retail crowdfunding, that allows for the democratization of access to capital, may suffer excessive regulatory encumbrance once final rules are announced. And while Senator Merkley desires “the development of a new, healthy capital raising marketplace” his exuberance for governmental wisdom over the wisdom of the crowd – may doom the benefit that efficient allocation of capital could bring to our country.
Senator Merkley’s letter is embedded below:
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