The Jobs Act was enacted to promote efficient access to external capital by small businesses. Title IV of the Jobs Act raises the limit on the exemption from federal registration provided by Regulation A to $50 million and requires the SEC to enact enabling regulations. The Commission’s first iteration of its proposed Regulation A amendments implementing Title IV of the Jobs Act fails to offer small businesses efficient access to external capital. Principally, this is because the proposed Regulation A amendments: (1) fail to preempt state registration authority over small offerings by small businesses relying on the proposed Regulation A amendments; and (2) fail to establish an appropriate balance in the disclosures required for small offerings by small businesses relying on the proposed Regulation A amendments. If the Commission has the will to do so, these problems can be fixed by revising its proposed Regulation A amendments, thereby enabling Regulation A, after decades on non-use, to become an efficient vehicle for small business capital formation.

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Notes/Citation Information

Letter from Rutheford B Campbell, Jr., Professor, to Elizabeth M. Murphy, Secretary, U.S. Securities and Exchange Commission (March 5, 2014) (submitted electronically to rule-comments@sec.gov)



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