SEC Addresses Rule 701 Compensatory Arrangements for Private Companies

By Randi Morrison posted 07-18-2018 08:04 PM

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Further to this week's Society Alert, the SEC issued rules to amend Securities Act Rule 701, which provides an exemption from registration for securities issued by non-reporting companies pursuant to compensatory arrangements. As mandated by the Economic Growth, Regulatory Relief, and Consumer Protection Act, the amendment increases from $5 million to $10 million the threshold in excess of which the issuer is required to deliver additional disclosures to investors. In addition, the SEC is soliciting comment on possible ways to modernize rules related to compensatory arrangements.

See the SEC's Fact Sheet, Final Rule 701: Exempt Offerings Pursuant to Compensatory Arrangements, Concept Release on Compensatory Securities Offerings and Sales, these Statements from SEC Chair Clayton and Commissioners Peirce and Stein, this Stinson Leonard Street post, and additional information and resources on our Private Companies page. and Regulatory Reform pages.

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