The Securities and Exchange Commission’s Division of Corporation Finance issued revised staff interpretations on Regulation Crowdfunding (Reg CF), offering new guidance on how issuers can switch intermediary platforms, calculate fundraising caps, and comply with filing obligations for longer-running offerings.
Reg CF was part of the JOBS Act of 2012 that legalized online capital formation. The smallest exemption, issuers may raise up to $5 million in a securities offering, which is enabled by a FINRA-regulated entity. Both Accredited and Non-Accredited participate in the offering, subject to certain requirements.
In five updated Compliance and Disclosure Interpretations (C&DIs) dated Feb. 17, SEC staff addressed practical questions that have become more common as issuers use funding portals and broker-dealer platforms to run successive or extended crowdfunding campaigns.
On platform changes, the staff said an issuer may move a Reg CF offering from one intermediary’s platform to another before any sales are made, so long as the issuer continues to meet key conditions under the exemption.
The interpretation points issuers to rules requiring the offering to be conducted through a single intermediary and to satisfy the baseline requirements for using Reg CF.
To do so, the SEC staff said issuers should cancel the offering on the first platform, remove the offering materials from that platform, and file a new Form C to begin the offering anew on the new intermediary’s platform.
The SEC staff also clarified issuer eligibility for companies that previously reported under the Securities Exchange Act.
It said the disqualification provision in Reg CF would not bar former Exchange Act reporting companies when their Exchange Act reporting obligations have been terminated or suspended, removing uncertainty for issuers that have exited public-company reporting but remain interested in raising capital through crowdfunding.
On the size of offerings, the staff explained that the 12-month crowdfunding cap is measured on a rolling basis from the date of each closing.
That means issuers must look back 12 months from each closing to determine how much they have offered and sold under the exemption, rather than relying on a fixed annual period.
For investor limits, the staff said the “annual” period for “annual income” used to calculate investment limits for non-accredited investors is a calendar year, aligning with Regulation D and potentially simplifying how issuers and intermediaries apply the income-based test.
Finally, the SEC staff addressed ongoing disclosure when an offering stays open beyond an issuer’s fiscal year-end.
If a Reg CF offering remains open more than 120 days after the fiscal year-end and at least one rolling closing has occurred, the issuer must file a Form C amendment with updated financial statements, file its annual report on Form C-AR, and continue filing required progress updates.
The revisions read as a compliance “clean-up” aimed at standardising market practice.
They make it easier for platforms and counsel to apply consistent rules on switching intermediaries, determining eligibility, and calculating caps.
But the guidance also highlights that longer-running crowdfunding raises can trigger heavier reporting burdens, increasing cost and execution risk for issuers that keep offerings open across fiscal year-end deadlines.
