Updates on Regulation, Trading, and Market Reforms for the Alternative Investment Community

CategoryPrivate Offerings

New Regulation Crowdfunding Rules Come into Effect

In 2012, the Jumpstart Our Business Startups (“JOBS”) Act introduced Regulation Crowdfunding (“Reg CF”) to the regulatory framework governing exempt offerings, enabling eligible companies to offer and sell securities through crowdfunding.  The JOBS Act was created to ease securities regulations and to encourage the private funding of U.S. small businesses by reducing costs associated with the...

Taxation of Carried Interests is Reignited by Recent Congressional Bill

Representatives Bill Pascrell (D-NJ), Andy Levin (D-MI) and Katie Porter (D-CA) released H.R. 1068[1] on February 16, 2021, known as the “Carried Interest Fairness Act” (the “Act”).  The Carried Interest Fairness Act would tax carried interest compensation at ordinary income tax rates and treating it as wage income subject to employment taxes.  Capital gains taxation would still apply to general...

2020 in the Rear-View Mirror:  Key Takeaways Applicable to Private Investment Funds and Private Offerings

In 2020, the Securities and Exchange Commission (SEC) renewed its focus on private investment funds while easing limits on private placements generally.  As the SEC observes, private fundraising easily surpasses public fundraising including with respect to private investment funds.  The following discussion recaps a few of the key developments affecting private offerings, private funds and...

EB-5 Regional Center Program Extended Through June 30, 2021

The EB-5 Regional Center Program will be extended through June 30, 2021 as part of the Consolidated Appropriations Act, 2021. This legislation does not address the EB-5 per-country-caps limit or other major reform issues that had been raised just a short time ago in Congress but separates EB-5 Regional Center Program reauthorization from future federal spending (appropriations) bills by making...

ISDA IBOR Fallbacks Supplement and Protocol: What You Need to Know

I.  Introduction In 2017, the UK’s Financial Conduct Authority (“FCA”) announced that it will not require the calculation and publication of interbank offered rates (“IBORS”) beyond 2021.  The absence of a guaranteed IBOR after 2021 has triggered one of the largest and intricate challenges that financial markets have confronted to date.  Trillions of dollars of derivatives contracts and many...

Let the Fundraising Begin:  SEC Harmonizes and Improves its Exempt Offering Framework

On November 2, 2020, the Securities and Exchange Commission (“SEC”) voted to amend and simplify its rules governing private-offering exemptions under the Securities Act of 1933 (the “Securities Act”) to promote capital formation (the “Amendments”).[1]  The SEC release included discussion of their intent to remain true to the key components of their mission, namely investor protection, capital...

SEC Expands Pool of Eligible Private Offering Participants

The Securities and Exchange Commission’s (SEC) recent expansion of the definition of “accredited investor” in the final rule (Final Rule) issued on August 26, 2020, allows people with professional knowledge, experience or certifications to qualify as accredited investors, which is a highly welcome step that is creating quite a buzz!!  The Final Rule is particularly beneficial to private offerings...

Not a Moment Too Soon: SEC Proposals to Ease Capital Raising Rules

On March 4, 2020, the Securities and Exchange Commission (“SEC”) issued proposed amendments (the “Proposals”) in Release No. 33-10763, “Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in Private Markets ” (the “Release”) affecting certain exempt offering rules to reduce impediments to fundraising under the Securities and Exchange Act of 1933...

Updates on Regulation, Trading, and Market Reforms for the Alternative Investment Community