Eshoo Hails New SEC Rules to Promote Capital Formation and Create Jobs

WASHINGTON, D.C.—Congresswoman Anna G. Eshoo (D-Calif.), Ranking Member of the Communications and Technology Subcommittee, welcomed the unanimous adoption by the Securities and Exchange Commission (SEC) of final rules to raise the offering limit under Regulation A. Regulation A was enacted under President Franklin D. Roosevelt to facilitate the flow of capital into small businesses by providing an exemption from the registration requirements normally applicable when a company seeks to raise capital by selling its securities to the public.

“After five long years, I welcome the final implementation by the SEC of new Regulation A limits. This adds a few more cylinders to our nation’s economic engine,” said Eshoo, who testified before the Financial Services Committee in 2010, urging a change to the outdated Regulation A limits. “By increasing the dollar limit on securities offerings from $5 million to $50 million, we’re helping small issuers gain access to funding without the costs and delays associated with the full-scale securities regulation process. Greater capital formation is essential for job creation and will be realized through this revitalization of the SEC’s Regulation A.”

Eshoo authored the legislation which passed Congress in 2012 and was signed into law as part of the JOBS Act. It required the SEC to raise the threshold for certain Regulation A offerings from $5 million to $50 million, providing small companies a lower-cost means to raise public capital and create jobs. The previous limit, stuck at $5 million since 1992, left Regulation A scarcely used because a $5 million offering had a price tag of $1 to $2 million in underwriting expenses.

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