The SEC Approves Changes to Reg CF: Increasing the Maximum Offering Limit From $1.07M to $5M, and More

On Monday November 2nd, 2020, the SEC made some key changes to Regulation Crowdfunding that will go into effect soon, and we believe these changes could greatly accelerate the use of investment crowdfunding in the funding of innovative infrastructure projects and startups! The upcoming changes to Reg CF include:

  • Increasing the maximum amount companies can raise from $1.07M to $5M.
  • Amending the investment limits for investors by:
    • removing investment limits for accredited investors and; 
    • using the greater of their annual income or net worth when calculating the investment limits for non-accredited investors.
  • Extending Reg CF’s COVID-relief measures for an additional 18 months.
  • Permitting “test-the-waters” communications, which allows issuers to solicit interest from investors prior to filing the offering documents.
  • Permitting “demo day” communications that would not be deemed general solicitation or general advertising.
  • Permitting Special Purpose Vehicles in Regulation Crowdfunding offerings.  This change is especially useful for implementing investment crowdfunding for infrastructure project financing.

The full SEC Press Release here.

The amendments will be effective 60 days after publication in the Federal Register, except for the extension of the temporary Regulation Crowdfunding provisions, which will be effective upon publication in the Federal Register.

These rule changes underscore the SEC’s commitment to Title III Reg CF Crowdfunding as a needed form of capital raising in the post COVID landscape.

InfraShares is the only FINRA approved Title III Reg CF Funding Portal focused on infrastructure and we look forward to expanding our marketplace of infrastructure investment opportunities.  We appreciate your continued support as we strive to help bridge the investment gap in our public infrastructure.