U.S. Rep. Tom Emmer (R-MN) led a bipartisan call on Friday for the Securities and Exchange Commission (SEC) to update intrastate crowdfunding regulations for entrepreneurs.
Emmer and U.S. Rep. Gwen Moore (D-WI) led the letter to SEC Commissioner Mary Jo White, with U.S. Rep. Randy Neugebauer (R-TX) among a bipartisan group of 13 members of Congress who signed the letter.
“While this issue tends to get rather technical, the bottom line is that dated regulations are thwarting the ability of entrepreneurs to raise capital,” Emmer said. “This means fewer jobs and opportunities for Minnesotans. However, as a member of the House Financial Service Committee, I can help fix this by working with the SEC to modernize these obsolete regulations.”
The letter calls for changes to intrastate crowdfunding rules under the Securities Act of 1993 to ensure that state legislatures wouldn’t have to amend existing crowdfunding statutes.
“Furthermore, we believe that the states are better positioned to determine offering and investor caps that best meet their local population and business needs,” the letter states. “We therefore respectfully request that the SEC not limit the availability of the exemption to a state exemption with a $5 million offering cap as proposed, but instead allow such limitations to be determined under state law. We also strongly encourage the commission to maintain important investor protections in any new exemption, including preserving all existing state authority.”
States would be able to play a primary role in establishing maximum amounts that entrepreneurs could raise through crowdfunding under the proposed changes.