The recent ruling on the proposed practice of crowdfunding that was provided by the U.S. Securities and Exchange Commission (SEC) makes a greater range of investing options one step closer for young people.
President Barack Obama signed the Jumpstart Our Business Startups (JOBS) Act on April 5, and the SEC has mandated various regulations surrounding the approved regulatory regime, according to Forbes.
The laws proposed by the SEC on August 29 would eliminate the rules that prevent solicitation and advertising in certain offerings of securities. The proposed laws, which have been mandated by the passage of the JOBS ACT, would allow companies to utilize general solicitation and general advertising to offer securities by amending Rule 506 of Regulation D and Rule 144A of the Securities Act of 1933.
"I believe that the proposed rules fulfill Congress’s clear directive that issuers be given the ability to communicate freely to attract capital, while obligating them to take steps to ensure that this ability is not used to sell securities to those who are not qualified to participate in such offerings," SEC Chairman Mary Schapiro said in the statement.
If crowdfunding is approved, it will provide young investors with another investment option.