The Securities and Exchange Commission’s Small Business Capital Formation Advisory Committee will meet to discuss regulations around “finders” who help companies raise capital in small markets.
The meeting will do a “deep dive” into “finders. Previously, the commission proposed a limited, conditional exemption from broker registrants for “finders” who help companies raise capital in private markets from accredited investors. The committee did not finalize the exemption, however, in an effort to promote small business capital formation, the Committee will explore the issues again, the committee said.
“In keeping with the committee’s efforts to promote small business capital formation, including access to capital for founders who are building businesses outside of prominent entrepreneurial hubs or without robust capital-raising networks, the committee will spend the remainder of the meeting exploring “finders” and related matters,” the committee said in a statement.
The committee will first hear an historical regulatory context to get a deeper understanding of finders from SEC staff in the Division of Trading and Markets who will provide an overview of the 2020 proposal as well as feedback from commentors. Afterwards, the committee will have the opportunity to learn more about the role of finders and possible regulatory solutions form industry practitioners Gary Ross, Managing Partner at Ross Law Group, and Kelley Arena, Founder at Golden Hour Ventures. Committee members will also have the opportunity to explore potential principles, frameworks, conditions and safeguards that could permit finders to engage in capital-raising activities.
The meeting will be held online and in-person, as well as streamed on a webcast on the SEC’s website. The meeting will be held at 10 a.m. on July 22.