The Crowdfunding Professional Association (CfPA) has adopted a policy objective to ask the Securities and Exchange Commission (SEC) to “deliberately compare exemptions” and avoid a “disjointed patchwork of regulations.”
The new “Presumptive Parity” advocacy was distributed by the CfPA board of directors this week.
The CfPA advocates on behalf of online capital formation and the various securities exemptions that enable raising money online. In the past, the CfPA has been more focused on securities exemptions that allow for non-accredited investor participation, initially Reg CF (Regulation Crowdfunding). Reg A and Reg D 506(c) also allow online capital formation, with Reg A being more prescriptive, requiring an SEC-qualified offering document, and Reg D catering only to accredited investors.
The CfPA explains:
“When the SEC creates or materially changes an exempt capital-raising pathway, it should compare that pathway against similarly situated existing ones. Comparable capital raising opportunities and comparable regulatory burdens should be the starting point, unless a meaningful difference in one pathway justifies treating them differently. The burden of identifying that difference falls on whoever is defending it. Novelty alone does not count. And where no justification exists, the Commission should move toward parity as far as its authority allows.”
Brian Belley, President of the CfPA and an executive at Kingscrowd, says the SEC recognized the issue in 2020 and took steps to mitigate challenges. Today, they are asking the SEC to compare capital-raising pathways when creating new rules, adding, “It’s easier to get that right from the start than to come back years later and harmonize the system.”
The CfPA says the government writes the rules, but the private sector must manage and spend funds turning them into working markets. Participants make “long horizon bets” on regulatory stability. When new rules arrive with opacity, participants bear the cost, increasing the risk that old frameworks are undermined and new ones are not built at all.
The group stated that its SEC Liaison and Affairs Subcommittee will submit comments on the SEC’s proposed Regulation Crypto Assets (Reg CA), due October 20, 2026.
The SEC recently proposed Reg CA to enable crypto offerings under an exempt ecosystem. Largely based on Reg CF and Reg, the rules differ to a degree that could influence issuers to migrate to the Reg CA exemption. At the same time, Reg CA could be paired with existing securities exemptions.
In August, CI published a comparison between the new Reg CA and Reg CF/Reg A. Interested parties are now submitting comments on the proposed rules.
