As you may have heard, the SEC has finally adopted the rules required to implement the crowdfunding exemption. The final release (686 pages) is available here.

But the crowdfunding exemption was not the only item on the SEC’s agenda. At the same meeting, it proposed some rather significant amendments to Rule 504 of Regulation D and to Rule 147, the intrastate offering safe harbor. The release proposing those changes is available here. (It’s only 168 pages.)

The proposed amendment to Rule 504 would increase the dollar amount of the exemption from $1 million to $5 million and would also add bad actor disqualifications similar to those that currently apply to Rules 505 and 506.

The proposed changes to Rule 147 would almost significantly restructure the rule. Here’s a description of the significant changes, taken from an SEC news release:

The proposed amendments would modernize Rule 147 to permit companies to raise money from investors within their state without concurrently registering the offers and sales at the federal level.  The proposed amendments to Rule 147 would, among other things:

• Eliminate the restriction on offers, while continuing to require that sales be made only to residents of the issuer’s state or territory.

• Refine what it means to be an intrastate offering and ease some of the issuer eligibility requirements in the current rule.

• Limit the availability of the exemption to offerings that are registered in-state or conducted under an exemption from state law registration that limits the amount of securities an issuer may sell to no more than $5 million in a 12-month period and imposes an investment limitation on investors.

I think the Rule 147 proposal raise some interesting issues. I will discuss those proposed changes once I’ve had time to work my way through the release.