It appears that StartEngine, a leading securities crowdfunding platform in the US, is asking platform investors to comment on the Securities and Exchange Commission’s Proposed Rule: Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in Private Markets. The SEC has noted that it is receiving the following comment regarding the proposed rule:
The following Letter Type A, or variations thereof, was submitted by individuals or entities.
Letter Type A:
To whom it may concern,
I am an investor in StartEngine Crowdfunding, Inc. a startup that has raised capital through a Tier 2 Regulation A campaign.
I would like the opportunity to trade these shares in a secondary market place.
Please provide a federal preemption for Secondary sales of a Tier 2 Regulation A or Regulation Crowdfunding raise so investors from any state, like myself, can trade our shares.
Under Reg A+, Tier 2, issuers may immediately trade shares in a company but hurdles exist at the state level and the lack of an exemption from state oversight of these transactions. Tier 2 issuers are generally exempt from state securities law registration at the offering stage but “Blue Sky” compliance may impact secondary trading. Unfortunately, Blue Sky rules vary from state to state creating a hodgepodge of regulatory requirements – something the SEC can better clarify making liquidity available for Reg A+ Tier 2 securities purchasers.
As well, restrictions exist for issuers of Reg CF securities.
Providing a clear path for liquidity beyond an acquisition or merger is generally viewed as a positive for investors. In the UK, no such constraints exist and leading investment crowdfunding platform Seedrs has successfully launched a secondary marketplace for investors.