You are a new staff accountant at Worldwide Consulting, a global accounting firm that specializes in...

You are a new staff accountant at Worldwide Consulting, a global accounting firm that specializes in providing consulting services to companies both domestic and global. As part of your new responsibilities, you have been instructed to review SEC proposed rules to determine whether they should be commented on. Visit the Securities and Exchange Commission (SEC) website at www.sec.gov (Links to an external site.). Go to the Regulation menu, and the Proposed Rules sub menu. Review and identify a recent proposed rule, as well as any comments that have already been submitted on this proposal. Respond to the following: The major facts of this proposed rule. A summary of the current comments on this proposal. Your opinion about the proposal. That is, do you agree or disagree with the SEC's proposal and why or why not? Provide examples to support your opinion. post should be 250-500 words Chose Facilitating Capital Formation and Expanding Investment Opportunities by Improving or which proposal would be the best fit for manufacturing company. Please advise?

Expert Solution

The proposed rule of Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in Private Markets is a proactive approach with regards to improve as well as modernize U.S. securities exemption. This rule comes as boon for early-age startups for whom seed stage financing are very important. Smaller companies do not go for registered offerings as the smaller companies want to avoid the initial and ongoing costs that are associated with a registered offering. The proposed rule aims to simplify as well as harmonize the exempt offering framework. The underlying aim of this is to promote capital formation and then expand investment opportunities on one hand while in the other hand it aims to maintain appropriate levels of protection for the investors as well.

Summary of the current comments – There are various comments here. One is by Mark Jones (CEO of Sprowtt Inc.), another is by Youngro Lee (CEO of NextSeed Securities) and so on. Almost all of the current comments are supportive of the rule and points out ways in which the rule can be altered and changed to make it more practical relevance and scope. For instance in one of the comments the concerned person says that the rule should be changed for the new REGCF rules related to syndication. The comment points out the conflict with the rule that offering can only appear on one registered funding portal at a time.

My opinion about the proposal is that it is a good step forward and will bring a lot of relief and increased level of convenience for smaller companies and startups. The proposal balances the interests of both companies that are seeking out funds and investors who are providing funds to these companies. I agree with the proposal and to support my opinion I would provide the present day example of the situation that we are facing due to the Covid pandemic. There has been a meaningful disruption in the availability of venture capital that is available for startups and this proposal will enable startups to look into Regulation Crowdfunding as an alternate option.

(350 words in total).

ekkarill92 answered 1 year ago

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