SEC Rule Making

Tracking the SEC’s Rule Making
Progress on Crowdfunding Guidelines

By Robert HoskinsFront Page PR

In order to understand why the SEC’s progress has been slow, it is important to understand how the government rule making process works.  In simplified terms, the SEC has a staff that puts together a set of preliminary rules. Next, the proposed rules are issued and then a public comment period begins.  During this time period anyone can submit their comments for or against any set of rules.  After a period of time to weigh the proposed guidelines and the public comments, the SEC issues a set of formal approved rules.  Even after rules have been issued, anyone can solicit the SEC to change the rules by submitting a strong enough argument for rule amendments.

Given this simple explanation, it is important to understand that the public can have a tremendous affect on the way a final set of rules are written.  For example, one of the main reasons that the SEC is hesitating is because of an article published in the Motley Fool.  This magazine reaches a target audience of auditing, legal and financial executives that will be greatly impacted by the a new set of rules that eliminate the need for their services.  Accordingly, they flooded the SEC with public comments that predicted doom and gloom.  Thus, providing the SEC with sufficient ammunition to prolong the rule making process.

What needs to happen to speed things at the SEC to get the Title II guidelines approved is to flood the SEC with public comments that provide an overwhelming support to issue a relaxed set of rules immediately, citing the ability to tighten regulations later should the real world provide evidence that stricter regulations are necessary.

If you happen to be a reporter in the media, it would help America greatly to write articles that educate America on the benefits that Crowdfunding will deliver for small businesses and economic development.  Then point them toward the links below to see what has been submitted so far and then file comments of their own.

In fact, everyone that has a social media connection can help spread the word on what needs to be done to provide the SEC with an avalanche of positive testimony from small businesses on the need for startup capital.  It would also be wise to point out that to date the fear of equity crowdfundign fraud is really a figment of the imagination and is not an issue in every country where Equity Crowdfunding has been legal for years.  It is really more of a fear mechansim put into place by the powerful people on Wall Street that are very afraid they will lose control over how wealth is controlled and distributed throughout America.

Once you start exploring the links below, you will soon realize that the rules for Title III have not even been proposed even though the SEC had a legal deadline to put the rules into place by January 1, 2013.

The good news is, however, the following link  allows anyone to file  a petition to requesting the SEC to write the Title III proposed rules and open them up for public comments.

I. SEC Petition for Rule Making (click to file a petition)

Petition for Rule Making. Any person may request that the Commission issue, amend or repeal a rule of general application. Petitions must contain the text or substance of any proposed rule or amendment or specify the rule or portion of a rule requested to be repealed. Persons submitting petitions must also include a statement of their interest and/or reasons for requesting Commission action.

All petitions will be forwarded to the appropriate office or division of the Commission for consideration and recommendation. Following submission of the staff’s recommendation to the Commission, petitioners will be notified of any action taken by the Commission.

For additional information please refer to the Commission’s Rules of Practice, Rule 192 (17 CFR 201.192)

II. SEC’s Rule Making Process  (click to review rule makeing process)

Concept Release. The rulemaking process usually begins with a rule proposal, but sometimes an issue is so unique or complicated that the SEC seeks public input before issuing a proposed rule. A concept release typically outlines the topic of concern, identifies different potential approaches, and raises a series of questions inviting public comment on the matter. The public’s feedback is taken into consideration as the SEC decides which approach, if any, is appropriate.

III.  Proposed SEC Rules  (click to review all SEC prosed rules)

Rule Proposal. When approved by the Commission, a rule proposal is published for public notice and comment for a specified period of time, typically between 30 and 60 days. A rule proposal typically contains the text of the proposed new or amended rule along with a discussion of the issue or problem the proposal is designed to address. The public’s input on the proposal is considered as a final rule is drafted.

IV.   SEC Request for Comments (click to file public comments)

Public Comments. The SEC encourages the public to submit comments on the following proposed rules during the comment period. For detailed instructions, please read How to Submit Public Comments.

V. Laws That Govern the Securities Industry (click to review all approved laws)

Rule Adoption. When approved by the Commission, the new rule or rule amendment becomes part of the official rules that govern the securities industry. The adopting release reflects the Commission’s consideration of the public comments. Many rules are effective immediately, but some have a delayed effective date. In either case, the date by which the public must come into compliance with a new or amended rule (the Compliance Date) may be delayed or phased in to ensure the transition is a smooth one.

VI. Comments on Proposed Rule: Eliminating the Prohibition against General Solicitation and General Advertising in Rule 506 and Rule 144A Offerings Release No. 33-9354; File No. S7-07-12

VII.    JOBS Act Comments Page (click to review all portions of JOBS Act)

VIII.  Federal Registry; Update on Eliminating the Prohibition against General Solicitation and General Advertising (click to learn what has been done so far)

The federal registry provides a overview of everything has been posted about about given docket item. One of the most important things to review in how much the work load is expected to increase once the Title II rules are approved.

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One Response to “SEC Rule Making”


  1. Donation-Based Crowdfunding Sites: Kickstarter Vs. Indiegogo | Easy-East Fund - January 16, 2014

    […] campaign, especially when the there are 900 different platforms from which to chose. And when Title II, Reg. D Equity Crowdfunding becomes legal, they will get even more complex, but we will save that topic for another […]


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