[Federal Register Volume 85, Number 171 (Wednesday, September 2, 2020)]
[Rules and Regulations]
[Pages 54483-54490]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-19468]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 227 and 239

[Release No. 33-10829]


Temporary Amendments to Regulation Crowdfunding; Extension

AGENCY: Securities and Exchange Commission.

ACTION: Temporary final rule; extension.

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SUMMARY: The Securities and Exchange Commission (``Commission'') is 
extending the effective date and applicability dates of our temporary 
final rules under Regulation Crowdfunding to facilitate capital 
formation for small businesses impacted by coronavirus disease 2019 
(COVID-19). The temporary final rules are intended to expedite the 
offering process for smaller, previously established companies directly 
or indirectly affected by COVID-19 that are seeking to meet their 
funding needs through the offer and sale of securities pursuant to 
Regulation Crowdfunding. The temporary final rules are designed to 
facilitate this offering process by providing tailored, conditional 
relief from certain requirements of Regulation Crowdfunding relating to 
the timing of the offering and the availability of financial statements 
required to be included in issuers' offering materials while retaining 
appropriate investor protections.

DATES: Effective date: The amendments in this rule are effective from 
August 31, 2020, through September 1, 2021. The expiration date for the 
temporary final rules published May 7, 2020 (85 FR 27116) is extended 
from March 1, 2021, to September 1, 2021.
    Applicability date: The temporary final rules apply to securities 
offerings initiated under Regulation Crowdfunding between May 4, 2020, 
and February 28, 2021.

FOR FURTHER INFORMATION CONTACT: Jennifer Zepralka, Office of Small 
Business Policy, Division of Corporation Finance, at (202) 551-3460; 
U.S. Securities and Exchange Commission, 100 F Street NE, Washington, 
DC 20549-3628.

SUPPLEMENTARY INFORMATION: We are adopting amendments to 17 CFR 227.100 
(``Rule 100''), 17 CFR 227.201 (``Rule 201''), 17 CFR 227.301 (``Rule 
301''), 17 CFR 227.303 (``Rule 303'') and 17 CFR 227.304 (``Rule 304'') 
of 17 CFR part 227 (``Regulation Crowdfunding'') under 15 U.S.C. 77a et 
seq. (the ``Securities Act'') and to 17 CFR 239.900 (``Form C'') as 
temporary final rules.

I. Background

    The outbreak of COVID-19 has had far-reaching effects, with small 
businesses being particularly affected by the closures and safety 
measures designed to slow the spread of COVID-19.\1\ Recognizing that, 
as a result, many

[[Page 54484]]

small businesses were facing challenges accessing urgently needed 
capital in a timely and cost-effective manner, on May 4, 2020, the 
Commission adopted temporary final rules intended to address feedback 
received from its Small Business Capital Formation Advisory Committee 
and others.\2\ That feedback noted that certain Regulation Crowdfunding 
requirements may have been making it difficult for an issuer affected 
by COVID-19 to launch an offering and see it to completion within a 
time frame that would meet its urgent capital needs.\3\ The temporary 
final rules provide flexibility for eligible issuers \4\ to assess 
interest in a Regulation Crowdfunding offering prior to preparation of 
full offering materials,\5\ and then once launched, to close such an 
offering and have access to funds sooner than would be possible in the 
absence of the temporary relief.\6\ The temporary rules also provide an 
exemption from certain financial statement review requirements for 
issuers offering $250,000 or less of securities in reliance on 
Regulation Crowdfunding within a 12-month period.\7\ In addition, a 
condition to each aspect of the temporary relief is a requirement to 
provide clear disclosure to investors with respect to the issuer's 
reliance on such relief.\8\ The following table summarizes the 
amendments. For a detailed description of the temporary final rules, 
see the Temporary Amendments Adopting Release.
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    \1\ See, e.g., MetLife & U.S. Chamber of Commerce Special Report 
on Coronavirus and Small Business (April 3, 2020), available at 
https://www.uschamber.com/sites/default/files/metlife_uscc_coronavirus_and_small_business_report_april_3.pdf 
(``With high levels of concern about COVID-19 reported in every 
sector and region of the country, one in four small businesses (24 
percent) report having already temporarily shut down. Among those 
who haven't shut down yet, 40 percent report it is likely they will 
shut temporarily within the next two weeks. Forty-three percent 
believe they have less than six months until a permanent shutdown is 
unavoidable.''). See also MetLife & U.S. Chamber of Commerce Small 
Business Coronavirus Impact Poll (July 29, 2020), available at 
https://www.uschamber.com/sites/default/files/metlife_uscc_sbi_coronavirus_impact_poll_july.pdf (reporting that in 
July 2020, 86% of small businesses surveyed report they are either 
fully (52%) or partially (34%) open, but ``most small businesses are 
concerned about financial hardship due to prolonged closures (70%) 
and more than half worry about having to permanently close 
(58%).'').
    \2\ See Transcript of SEC Small Business Capital Formation 
Advisory Committee (April 2, 2020), available at https://www.sec.gov/info/smallbus/acsec/sbcfac-transcript-040220.pdf, at 30-
32 (expressing the view that Regulation Crowdfunding is ``the only 
mechanism'' for private businesses to access ``non-accredited 
investors, really the community members'' and suggesting relief from 
the financial statement requirements of Regulation Crowdfunding) and 
39-41 (suggesting financial statement relief and relief from the 
requirement to wait 21 days before disbursement of funds raised in a 
Regulation Crowdfunding offering). See also Transcript for Online 
Investment Capital Raising Virtual Coffee Break (April 3, 2020), 
available at https://www.sec.gov/files/OS-018-20-403-full.pdf.
    \3\ See Temporary Amendments to Regulation Crowdfunding, Release 
No. 33-10781 (May 4, 2020) [85 FR 27116 (May 7, 2020)] (``Temporary 
Amendments Adopting Release'').
    \4\ See temporary 17 CFR 227.100(b)(7) (``Rule 100(b)(7)''). To 
rely on the temporary rules, an issuer must meet the requirements of 
temporary Rule 100(b)(7) in addition to the current eligibility 
requirements of 17 CFR 227.100(b)(1) through (6).
    \5\ See temporary 17 CFR 227.201(z)(2) (``Rule 201(z)(2)'').
    \6\ See temporary 17 CFR 227.303(g) (``Rule 303(g)'') and 
temporary 17 CFR 227.304(e) (``Rule 304(e)'').
    \7\ See temporary 17 CFR 227.201(z)(3) (``Rule 201(z)(3)''). 
Note that Instruction 1 to paragraph (t) continues to apply in 
connection with the determination of the offering amount.
    \8\ See temporary 17 CFR 227.201(z)(1) (``Rule 201(z)(1)'').

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             Requirement                    Existing regulation crowdfunding            Temporary amendment
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Eligibility..........................  The exemption is not available to:          To rely on the temporary
                                        Non-U.S. issuers;                   rules, issuers must meet the
                                                                                    existing eligibility
                                                                                    criteria PLUS:
                                        Issuers that are required to file   The issuer cannot
                                        reports under Section 13(a) or 15(d) of     have been organized and
                                        the Securities Exchange Act of 1934;        cannot have been operating
                                                                                    for less than six months
                                                                                    prior to the commencement of
                                                                                    the offering; and
                                        Investment companies;               An issuer that has
                                        Blank check companies;              sold securities in a
                                        Issuers that are disqualified       Regulation Crowdfunding
                                        under Regulation Crowdfunding's             offering in the past, must
                                        disqualification rules; and                 have complied with the
                                                                                    requirements in 15 U.S.C.
                                                                                    77d-1(b) (``Section 4A(b)'')
                                                                                    of the Securities Act and
                                                                                    the related rules.
                                        Issuers that have failed to file
                                        the annual reports required under
                                        Regulation Crowdfunding during the two
                                        years immediately preceding the filing of
                                        the offering statement.
Offers permitted.....................  After filing of offering statement          After filing of offering
                                        (including financial statements)            statement, but financial
                                                                                    statements may be initially
                                                                                    omitted (if not otherwise
                                                                                    available).
Investment commitments accepted......  After filing of offering statement          After filing of offering
                                        (including financial statements)            statement that includes
                                                                                    financial statements or
                                                                                    amended offering statement
                                                                                    that includes financial
                                                                                    statements.
Financial statements required when     Financial statements of the issuer          Financial statements of the
 issuer is offering more than           reviewed by a public accountant that is     issuer and certain
 $107,000 and not more than $250,000    independent of the issuer                   information from the
 in a 12-month period.                                                              issuer's Federal income tax
                                                                                    returns, both certified by
                                                                                    the principal executive
                                                                                    officer.
Sales permitted......................  After the information in an offering        As soon as an issuer has
                                        statement is publicly available for at      received binding investment
                                        least 21 days                               commitments covering the
                                                                                    target offering amount
                                                                                    (note: Commitments are not
                                                                                    binding until 48 hours after
                                                                                    they are given)
Early closing permitted..............  Once target amount is reached if:           As soon as binding
                                        The offering remains open for a     commitments are received
                                        minimum of 21 days;                         reaching target amount if:

[[Page 54485]]

 
                                        The intermediary provides notice
                                        about the new offering deadline at least
                                        five business days prior to the new
                                        offering deadline;
                                        The issuer has complied with the
                                        disclosure requirements in temporary Rule
                                        201(z);
                                        The intermediary provides notice
                                        that the target offering amount has been
                                        met; and
                                        At the time of the closing of the
                                        offering, the issuer continues to meet or
                                        exceed the target offering amount.
                                        Investors are given the
                                        opportunity to reconsider their
                                        investment decision and to cancel their
                                        investment commitment until 48 hours
                                        prior to the new offering deadline; and
                                        At the time of the new offering
                                        deadline, the issuer continues to meet or
                                        exceed the target offering amount.
Cancellations of investment            For any reason until 48 hours prior to the  For any reason for 48 hours
 commitments permitted.                 deadline identified in the issuer's         from the time of the
                                        offering materials. Thereafter, an          investor's investment
                                        investor is not able to cancel any          commitment (or such later
                                        investment commitments made within the      period as the issuer may
                                        final 48 hours of the offering (except in   designate). After such 48
                                        the event of a material change to the       hour period, an investment
                                        offering).                                  commitment may not be
                                                                                    cancelled unless there is a
                                                                                    material change to the
                                                                                    offering.
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    The temporary rules as adopted applied to offerings initiated under 
Regulation Crowdfunding between May 4, 2020, and August 31, 2020. 
However, the Commission indicated in the Temporary Amendments Adopting 
Release that it intended to monitor the situation and might, if 
necessary, extend the time period during which this relief applies, 
with any additional conditions the Commission deems appropriate, and/or 
issue other relief. In light of the continuing challenges facing small 
businesses, and for the reasons detailed below, the Commission has 
determined that it is necessary and appropriate to extend the 
applicability and effectiveness dates of the temporary final rules.

II. Amendment of Applicability and Expiration Dates of the Temporary 
Final Rules

    As noted above, the temporary final rules currently apply to 
offerings initiated under Regulation Crowdfunding between May 4, 2020, 
and August 31, 2020. The Commission has continued to monitor the COVID-
19 outbreak and its impact on small businesses. At this time, COVID-19 
still presents significant challenges for small businesses and is 
likely to continue to do so for some time.\9\ We continue to believe 
that a securities offering under Regulation Crowdfunding may be an 
attractive fundraising option for some small businesses at this time, 
particularly as a means of allowing an issuer to make use of the 
internet to reach out to its customers or members of its local 
community as potential investors as well as to existing investors. 
Overall, as discussed below, the temporary final rules have been well 
received by the market and have proven effective for some issuers to 
raise capital under the current conditions. We believe it is important 
to maintain the flexibility provided by the temporary final rules for 
small businesses that continue to face difficulties as a result of 
COVID-19.
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    \9\ See infra note 25. See also McKinsey & Co., Tracking US 
small and medium-sized business sentiment during COVID-19 (May 29, 
2020), available at https://www.mckinsey.com/industries/financial-services/our-insights/tracking-us-small-and-medium-sized-business-sentiment-during-covid-19; MetLife & U.S. Chamber of Commerce Small 
Business Coronavirus Impact Poll, supra note 1 (``Over the long 
term, small businesses show signs of guarded optimism, but feel it 
will be some time before things return to normal. More than half of 
small businesses believe it will take six months to a year before 
the small business climate returns to normal . . .''). Minority-
owned businesses are considered to be particularly at risk of 
closing their businesses. See MetLife & U.S. Chamber of Commerce, 
Special Report on Race and Inequality on Main Street (Aug. 4, 2020), 
available at https://www.uschamber.com/sites/default/files/sbi_inequality_on_main_street_8.4.pdf (finding that two in three 
(66%) minority-owned small businesses are concerned about having to 
permanently close their business versus 57% for non-minority small 
businesses).
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    Based on feedback that the Commission has received through comment 
letters on our proposing release, Facilitating Capital Formation and 
Expanding Investment Opportunities by Improving Access to Capital in 
Private Markets \10\ and other outreach conducted by Commission staff, 
the Commission understands that the temporary amendments generally have 
been helpful not only to those issuers that have initiated a Regulation 
Crowdfunding offering under the rules thus far, but also to those 
issuers that continue to consider their financing options during the 
pandemic.\11\ Members of the Small Business Capital Formation Advisory 
Committee also expressed positive views of the temporary amendments 
after they were adopted.\12\ As of July 31, 2020, the latest

[[Page 54486]]

available full month of data, we find that, of the 248 new offerings on 
Form C by eligible issuers (out of 292 total offerings), 94, or 38% 
(32%), relied on one or more of the provisions of the temporary 
relief.\13\ The commenters who found the temporary amendments helpful 
also have urged the Commission to extend the relief to offerings 
initiated after August 31, 2020.\14\
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    \10\ Facilitating Capital Formation and Expanding Investment 
Opportunities by Improving Access to Capital in Private Markets, 
Release Nos. 33-10763; 34-88321 (Mar. 4, 2020) [85 FR 17956 (Mar. 
31, 2020)] (``Access to Capital Proposing Release'').
    \11\ See, e.g., letters from NextSeed dated July 19, 2020 
(``NextSeed letter''), available at https://www.sec.gov/comments/s7-05-20/s70520-7449553-220993.pdf; and Republic dated June 1, 2020 
(``Republic-1 letter''), available at https://www.sec.gov/comments/s7-05-20/s70520-7258471-217640.pdf. Market participants in 
discussions with Commission staff also have noted that the 
flexibility provided by the temporary final rules may make a 
Regulation Crowdfunding offering a more realistic choice for an 
issuer seeking financing in the current market environment. One 
commenter stated that it had not yet listed an offering under the 
temporary final rules, but noted its ``shared enthusiasm with dozens 
of small businesses in [its] network actively evaluating the 
possibility of availing the Temporary Relief to fundraise.'' See 
letter from Republic dated August 22, 2020 (``Republic-2 letter''), 
available at https://www.sec.gov/comments/s7-05-20/s70520-7677531-222676.pdf. This commenter urged the Commission to expand the relief 
to allow small businesses to ``test the waters'' prior to filing the 
offering statement ``so that they can determine where it is 
worthwhile to undertake the effort of preparing an offering 
statement.'' But see letter from Better Markets dated June 1, 2020 
(``Better Markets letter''), available at https://www.sec.gov/comments/s7-05-20/s70520-7261530-217652.pdf (stating its view that 
the temporary amendments would expose investors to greater risks and 
less information).
    \12\ See, e.g., Transcript of SEC Small Business Capital 
Formation Advisory Committee (May 8, 2020), available at https://www.sec.gov/info/smallbus/acsec/sbcfac-transcript-050820.pdf, at 17-
19 (noting positive feedback from small businesses intending to take 
advantage of the relief).
    \13\ For this estimate, eligibility was estimated based on the 
issuer having been formed at least six months prior to the filing 
date of the offering and having had (1) either positive assets, 
revenues, net income, debt, accounts receivable, cost of goods sold, 
taxes paid, or employees in the most recent fiscal year reported on 
Form C, or (2) a prior Regulation Crowdfunding offering. See also 
infra notes 31 and 36.
    \14\ See, e.g., NextSeed letter; Republic-1 letter (noting the 
relief relating to financial statement requirements and encouraging 
the Commission to extend the relief, ``as the economic harm caused 
by the COVID-19 Pandemic is likely to be far reaching''); Republic-2 
letter (encouraging the Commission to consider incorporating the 
temporary relief into Access to Capital Proposing Release or 
extending the relief for at least 12 months).
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    In light of the continuing challenges facing small businesses and 
the feedback received on the temporary final rules, the Commission has 
determined that it is necessary and appropriate to extend the 
applicability and effectiveness dates of the temporary final rules. The 
temporary final rules, as extended, will apply to offerings initiated 
under Regulation Crowdfunding through February 28, 2021 and will be 
effective until September 1, 2021. This extension will continue to 
provide issuers with the opportunity to access capital on an expedited 
basis while maintaining appropriate investor protections.

III. Economic Analysis

    As discussed above, in light of the continued, considerable 
financing constraints and challenges facing small businesses as a 
result of the COVID-19 crisis, the Commission is extending temporary 
relief from certain requirements of Regulation Crowdfunding to issuers 
seeking funding on an expedited basis due to circumstances relating to 
COVID-19.
Several commenters have expressed support for the temporary rules.\15\
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    \15\ See supra note 11 and accompanying text. See also https://www.sec.gov/info/smallbus/acsec/sbcfac-transcript-050820.pdf. But 
see Better Markets letter (opposing the temporary rules).
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    The temporary rules were originally adopted in response to the 
unprecedented adverse impact of the COVID-19 crisis on small 
businesses. Since the adoption of the temporary rules, small businesses 
have continued to experience significant disruption, across a wide 
range of individual industries as well as the broader economy.\16\ In 
light of ongoing adverse financing conditions for small businesses as a 
result of the COVID-19 crisis, we believe that the relief remains 
necessary and appropriate. Preliminary evidence from the period of the 
temporary rules' effectiveness indicates that a significant proportion 
of eligible issuers conducting offerings in reliance on Regulation 
Crowdfunding have relied on one or more provisions of the relief in 
their capital raising.\17\
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    \16\ See infra note 25.
    \17\ See infra note 36.
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    We have considered the costs and benefits of the temporary 
rules.\18\ After examining recent evidence on the state of the 
crowdfunding market and the ongoing effects of the COVID-19 crisis 
summarized in Section III.A., we believe that the general economic 
considerations related to the benefits, costs, and effects on 
efficiency, competition, and capital formation of the individual 
provisions discussed in the May 4, 2020 Temporary Amendments Adopting 
Release continue to apply. In particular, we continue to believe that 
issuers eligible under the temporary rules continue to face adverse 
economic conditions and significant difficulties with raising external 
financing as a result of COVID-19. Extending the temporary relief will 
avoid a loss of targeted relief from certain requirements of Regulation 
Crowdfunding and enable eligible issuers affected by the COVID-19 
crisis to continue to avail themselves of a more flexible and efficient 
offering process. Extending the temporary relief also will prevent 
competitive disadvantages for issuers that initiate their offerings 
after the expiration of the existing temporary relief.
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    \18\ Section 2(b) of the Securities Act [15 U.S.C. 77b(b)] 
requires the Commission, when engaging in rulemaking where it is 
required to consider or determine whether an action is necessary or 
appropriate in the public interest, to consider, in addition to the 
protection of investors, whether the action will promote efficiency, 
competition, and capital formation.
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    Except as specified below, we incorporate the earlier economic 
analysis by reference.\19\ However, the adoption of the temporary 
relief on May 4, 2020 has also resulted in some economic effects that 
are discussed in Section III.A below. These effects are now part of the 
current baseline from which we evaluate the economic effects of the 
extension of these temporary rules.
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    \19\ See Temporary Amendments Adopting Release, at 27121-31.
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A. Baseline

    The baseline for this extension includes existing Regulation 
Crowdfunding regulations and industry practices \20\ and the existing 
temporary relief adopted on May 4, 2020.
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    \20\ For a more detailed discussion of the crowdfunding market, 
see Access to Capital Proposing Release; Report to the Commission: 
Regulation Crowdfunding (Jun. 18, 2019), available at https://www.sec.gov/files/regulation-crowdfunding-2019_0.pdf (``2019 
Regulation Crowdfunding Report'').
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    Given the exemption's offering limit, since Regulation Crowdfunding 
became effective in 2016, it has been utilized primarily by small 
businesses (which typically lack significant internal cash flows or 
access to other securities market financing options). Table 1 below 
presents data on the characteristics of issuers in Regulation 
Crowdfunding offerings as of July 31, 2020 (the most recent available 
full month of data).
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    \21\ The estimates are based on data from Form C or the latest 
amendment to it and exclude withdrawn offerings.

     Table 1--Characteristics of Issuers in Regulation Crowdfunding
                Offerings: May 16, 2016--July 31, 2020 21
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                                              Average         Median
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Age in years............................             3.0             1.9
Number of employees.....................             5.3             3.0
Total assets............................        $430,400         $37,194
Total revenues..........................        $347,124            $226
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    The median crowdfunding offering was by an issuer that was 
incorporated approximately two years earlier and that employed about 
three people. The median issuer had total assets of approximately 
$37,000 and close to zero revenues (approximately 49% of offerings were 
by issuers with no revenues). Approximately 11% of

[[Page 54487]]

offerings were by issuers that had attained profitability in the most 
recent fiscal year prior to the offering.
    Table 2 summarizes EDGAR filings data on amounts sought and capital 
reported raised in offerings under Regulation Crowdfunding since its 
inception (May 16, 2016) through July 31, 2020.

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                                                                                                     Aggregate
                                                      Number          Average         Median         (million)
----------------------------------------------------------------------------------------------------------------
Target amount sought in initiated offerings.....           2,525         $60,089         $25,000          $150.9
Maximum amount sought in initiated offerings....           2,525         607,503         535,000         1,494.2
Amounts reported as raised in completed                    1,005         230,219         107,000           231.4
 offerings \22\.................................
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    The baseline also includes the recent and ongoing effects of the 
disruption to the U.S. and global economy related to COVID-19, 
interventions aimed at mitigating its effects, and adverse changes in 
macroeconomic and financial market conditions (collectively referred to 
as ``the COVID-19 crisis'').
Small businesses often face significant financing constraints.\23\ 
Financing constraints make small firms more vulnerable to economic 
downturns and other negative shocks.\24\ The COVID-19 crisis has 
resulted in a substantial deterioration in financing and business 
conditions for small businesses.\25\ Small businesses eligible under 
the existing rules have been facing and are expected to continue to 
face significant adverse effects of the crisis, including, but not 
limited to, declines in consumer demand and revenues, particularly in 
consumer-facing industries, such as restaurants, recreation/lifestyle, 
and retail \26\ (e.g., as a result of changes in consumer confidence, 
commuting and travel patterns, declines in purchasing power, and 
explicit restrictions on the operation of certain businesses); 
disruptions to workforce and supply chains; and declines in investor 
sentiment that affect the availability of financing, valuations, and 
potential for exits.\27\ Some small issuers eligible under the 
temporary rules may also qualify for emergency relief under other 
economic assistance programs, which may mitigate some of the adverse 
impacts described above and the financing constraints stemming from the 
crisis.\28\ However, a recent report indicates that ``[b]ased on the 
number of firms that reference COVID-19, many companies are coming 
online to search for capital where they can't get it from banks or 
government programs like the Payroll Protection Program (PPP).'' \29\
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    \22\ Issuers that have not raised the target amount or not filed 
a report on Form C-U are not included in the estimate of proceeds. 
See also 2019 Regulation Crowdfunding Report, at 15, footnote 40.
    \23\ Small businesses often lack access to securities markets 
and rely on personal savings, business profits, personal and 
business credit, and friends and family as sources of capital. See 
U.S. Department of Treasury (2017) A Financial System That Creates 
Economic Opportunities: Banks and Credit Unions, available at 
https://www.treasury.gov/press-center/press-releases/Documents/A%20Financial%20System.pdf. According to one study relying on the 
data from the 2014 Annual Survey of Entrepreneurs, approximately 64% 
of small businesses relied on personal or family savings, compared 
to 0.6% receiving VC capital. About one-third of businesses used 
banks and other financial institutions as a source of capital for 
financing business operations in 2014. A significant share of 
businesses that established new funding relationships continued to 
have unmet credit needs. See Alicia Robb (2018) Financing Patterns 
and Credit Market Experiences: A Comparison by Race and Ethnicity 
for U.S. Employer Firms, Working Paper. See also Alicia M. Robb and 
David Robinson (2014) The Capital Structure Decisions of New Firms, 
Review of Financial Studies 27(1), 153-179 (showing that, while 
entrepreneurial firms frequently rely on outside loans, outside 
equity use is uncommon); Rebel Cole and Tatyana Sokolyk (2013) How 
Do Start-Up Firms Finance Their Assets? Evidence from the Kauffman 
Firm Surveys, Working Paper (showing, based on the 2004 Kauffman 
Firm Survey, that at start-up stage 76% of firms relied on credit, 
including 24% that used trade credit, 44% that used business credit, 
and 55% that used personal credit (percentages do not add up to 100% 
because firms may use multiple types of credit)). As a general 
caveat, working papers have not undergone peer review and may be 
subject to revision at a future date.
    \24\ Studies of the 2008-2009 financial crisis have documented 
disproportionate impacts of the crisis on the outcomes and 
employment of financially constrained small businesses. See, e.g., 
Michael Siemer (2019) Employment Effects of Financial Constraints 
during the Great Recession, Review of Economics and Statistics 
101(1), 16-29; Arthur Kennickell, Myron Kwast, and Jonathan Pogach 
(2017) Small Businesses and Small Business Finance during the 
Financial Crisis and the Great Recession: New Evidence from the 
Survey of Consumer Finances, In: J. Haltiwanger, E. Hurst, J. 
Miranda, and A. Schoar (Eds.), Measuring Entrepreneurial Businesses: 
Current Knowledge and Challenges, University of Chicago Press, 291-
349; Burcu Duygan-Bump, Alexey Levkov, and Judit Montoriol-Garriga 
(2015) Financing Constraints and Unemployment: Evidence from the 
Great Recession, Journal of Monetary Economics 75, 89-105. Various 
studies of traded small-cap companies show that small firms, which 
tend to be most financially constrained, are disproportionately 
affected by downturns or tightening credit conditions. See, e.g., 
Gabriel Perez[hyphen]Quiros and Allan Timmermann (2000) Firm Size 
and Cyclical Variations in Stock Returns, Journal of Finance 55(3), 
1229-1262 (showing that ``small firms display the highest degree of 
asymmetry in their risk across recession and expansion states, which 
translates into a higher sensitivity of their expected stock returns 
with respect to variables that measure credit market conditions''); 
Murillo Campello and Long Chen (2010) Are Financial Constraints 
Priced? Evidence from Firm Fundamentals and Stock Returns, Journal 
of Money, Credit, and Banking 42(6), 1185-1198 (finding that 
financially constrained firms' business fundamentals are 
significantly more sensitive to macroeconomic movements than 
unconstrained firms' fundamentals). See also Eugene Fama and Kenneth 
French (1993) Common Risk Factors in the Returns on Stocks and 
Bonds, Journal of Financial Economics 3, 3-56.
    \25\ See supra notes 1, 2, and 9. See also, e.g., several recent 
working papers examining impacts of the COVID-19 crisis on small 
businesses: Alexander W. Bartik, Marianne Bertrand, Zo[euml] B. 
Cullen, Edward L. Glaeser, Michael Luca, and Christopher T. Stanton 
(2020) How Are Small Businesses Adjusting to COVID-19? Early 
Evidence from a Survey, NBER Working Paper No. 26989; Jose Maria 
Barrero, Nicholas Bloom, and Steven J. Davis (2020) COVID-19 Is Also 
a Reallocation Shock, NBER Working Paper No. 27137; John Eric 
Humphries, Christopher Neilson, and Gabriel Ulyssea (2020) The 
Evolving Impacts of COVID-19 on Small Businesses Since the CARES 
Act, Cowles Foundation Discussion Paper No. 2230; Robert W. Fairlie 
(2020) The Impact of COVID-19 on Small Business Owners: The First 
Three Months after Social-Distancing Restrictions, NBER Working 
Paper No. 27462.
    \26\ See, e.g., Devin Thorpe, Startup Restauranteurs Find 
Willing Investors via Crowdfunding, Forbes (Sept. 28, 2019) and 2019 
US Equity Crowdfunding Stats--Year in Review, available at https://crowdwise.org/funding-portals/2019-equity-crowdfunding-stats-data/.
    \27\ See supra notes 1-2.
    \28\ See COVID-19 Resources for Small Businesses, https://www.sec.gov/page/covid-19-resources-small- businesses.
    \29\ See Crowdfund Capital Advisors, https://mailchi.mp/3f278c568278/crowdfunding-update-2019-state-of-regulation-crowdfunding-2638840.
---------------------------------------------------------------------------

    We expect the temporary rules to affect issuers, intermediaries, 
and investors in Regulation Crowdfunding offerings. As of July 31, 
2020, we estimate that 2,276 issuers had initiated 2,525 Regulation 
Crowdfunding offerings, excluding withdrawn offerings.\30\ As discussed 
below, eligibility criteria of the temporary rules exclude (1) issuers 
that were organized or had operations for less than six months prior to 
the commencement of the offering and (2) issuers that were not 
compliant with Regulation Crowdfunding requirements with regard

[[Page 54488]]

to any prior offerings in which they sold securities.
---------------------------------------------------------------------------

    \30\ These figures reflect data from the approximately 4.2 years 
since inception of Regulation Crowdfunding, with offering activity 
accelerating in the second half of the sample period. It is 
difficult to predict how many of the past issuers will conduct a 
follow-on offering in reliance on the relief as well as how existing 
market conditions, which affect both supply and demand of capital, 
will affect the flow of new crowdfunding offerings relative to 
historical data. Thus it is difficult to extrapolate from these 
numbers the flow of new crowdfunding offerings projected during the 
time frame during which temporary relief will be extended.
---------------------------------------------------------------------------

    Historical data provides an indication of the potential share of 
offerings eligible for temporary relief among all offerings. From 
inception of Regulation Crowdfunding through July 31, 2020, we estimate 
that 2,074 (approximately 82%) offerings were initiated by 1,867 
issuers that were eligible or would have been eligible for the 
temporary relief.\31\ With respect to the eligibility requirements 
related to follow-on offerings under Regulation Crowdfunding, i.e., 
that the issuer complied with Regulation Crowdfunding with respect to 
any prior offering in which they sold securities, it is difficult to 
estimate the percentage of prior Regulation Crowdfunding issuers that 
were not compliant with one or more of the requirements of Regulation 
Crowdfunding in a prior offering. From inception through July 31, 2020, 
we estimate that there were 209 repeat Regulation Crowdfunding issuers, 
including 160 such issuers that had reported successful completion of 
at least one Regulation Crowdfunding offering on Form C-U.\32\
---------------------------------------------------------------------------

    \31\ See infra note 13. In addition, we recognize that many of 
the past Regulation Crowdfunding issuers may meet the six-month 
eligibility criterion as of the effective date of these amendments, 
should they wish to avail themselves of the temporary relief for a 
follow-on offering under Regulation Crowdfunding.
    \32\ This figure likely provides a lower bound on the number of 
issuers that have initiated a follow-on offering after successfully 
completing a prior offering due to incomplete reporting of offering 
proceeds on Form C-U. See supra note 22. Follow-on issuance activity 
may differ from historical data due to changes in the crowdfunding 
market as a result of confounding market factors and continued 
uptake of the relief under the temporary rules by past issuers. See 
also Temporary Amendments Adopting Release, at 27124.
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    We estimate that there are 57 registered funding portals, excluding 
funding portals that have withdrawn their registration.\33\ Information 
on the number of investors per offering is not available for the full 
sample of Regulation Crowdfunding offerings, as it is not required to 
be reported in progress updates on Form C-U.\34\
---------------------------------------------------------------------------

    \33\ See https://www.finra.org/about/funding-portals-we-regulate 
(retrieved Aug. 22, 2020).
    \34\ See also Temporary Amendments Adopting Release, at 27124.
---------------------------------------------------------------------------

    We are unable to predict precisely the number of issuers likely to 
rely on the temporary rules while they are in effect.\35\ A review of 
new filings made on Form C on or after May 4, 2020 provides some 
information about issuer reliance on the temporary rules. As of July 
31, 2020, we find that, of the 248 new offerings on Form C by eligible 
issuers (out of 292 total offerings), 94, or 38% (32%) relied on one or 
more of the provisions of the temporary relief.\36\
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    \35\ For a more detailed discussion, see Temporary Amendments 
Adopting Release, at 27124-5.
    \36\ Among those 94 offerings, 50 offerings initially omitted 
financial statements, 38 relied on the shorter closing time, and 27 
provided certified rather than reviewed financial statements. (Some 
offerings relied on multiple provisions.) These estimates may 
represent a lower bound because reliance on the provisions is not 
disclosed in a structured data or standardized format and was 
evaluated based on manual review of filings for mention of the 
temporary rules. See supra note 13.
---------------------------------------------------------------------------

    The temporary relief, which took effect on May 4, 2020, was 
accompanied by an increase in Regulation Crowdfunding offering activity 
through the end of the period of analysis (July 31, 2020), as 
illustrated in Table 3 below. The increase was observed in comparison 
to both the pre-rule period of equivalent length (89 days from February 
5, 2020 to May 3, 2020) and the same period in the previous year (May 
4, 2019 to July 31, 2019). The increase was most pronounced for issuers 
that had been formed at least six months prior to the offering and thus 
would have been eligible under the temporary rules.
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    \37\ Based on staff analysis of EDGAR filings on Form C, 
excluding amendments.

                   Table 3--New Regulation Crowdfunding Activity, May 4, 2020-July 31, 2020 37
----------------------------------------------------------------------------------------------------------------
                                                                Aggregate target amount     Aggregate maximum
                Period                  Number of new filings         ($ million)           amount ($ million)
----------------------------------------------------------------------------------------------------------------
All issuers:
    Post (May 4, 2020-July 31, 2020).  292....................  15.5...................  173.4
    Pre (Feb. 5, 2020-May 3, 2020)...  199....................  10.0...................  110.9
    Change Post vs. Pre..............  47%....................  56%....................  56%
    2019 (May 4, 2019-July 31, 2019).  128....................  7.9....................  72.6
    Change Post vs. 2019.............  128%...................  98%....................  139%
Issuers formed at least six months
before the offering:
    Post (May 4, 2020-July 31, 2020).  251....................  13.4...................  156.1
    Pre (Feb. 5, 2020-May 3, 2020)...  161....................  7.8....................  86.6
    Change Post vs. Pre..............  56%....................  72%....................  80%
    2019 (May 4, 2019--July 31, 2019)  100....................  5.7....................  58.8
    Change Post vs. 2019.............  151%...................  137%...................  165%
----------------------------------------------------------------------------------------------------------------

    Important caveats apply: (1) The post-May 4, 2020 period coincided 
with a significant strengthening of the broader market sentiment, 
compared to the market sentiment in the preceding months; \38\ (2) due 
to the time required for the closing of an offering and lags in Form C-
U filing, we lack systematic data on the success rate and proceeds 
realized in offerings initiated under the temporary rules.\39\ We 
cannot infer causal effects because the regulatory change coincided 
with potential confounding aggregate factors. It is also possible that 
the trends in the number of initiated offerings reflect a general 
increase in issuer interest in crowdfunding over time independent of

[[Page 54489]]

the temporary rules. Small sample sizes warrant further caution in 
interpreting the changes.
---------------------------------------------------------------------------

    \38\ Based on Bloomberg data, between May 4 and July 31, 2020, 
Russell 3000 gained approximately 16%. This is in contrast to the 
16% decline in the index between February 5 and May 4, 2020.
    \39\ As of July 31, 2020, only a handful of reports of proceeds 
on Form C-U were filed for offerings initiated on or after May 4, 
2020. Issuers generally file Form C-U upon completion of an 
offering. The typical issuer that has filed Form C-U has filed it 
over two months after the initial filing of Form C.
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B. Economic Effects

    The temporary final rules currently in effect serve as the economic 
baseline against which the costs and benefits, as well as the impact on 
efficiency, competition, and capital formation, of the amendments are 
measured. Because the extension of the expiration dates in the 
temporary final rules maintains the status quo, we do not expect 
additional significant costs or benefits to result from the extension. 
We also do not expect the extension to have additional significant 
effects on efficiency, competition, or capital formation. In addition, 
while we expect the extension of the temporary relief to benefit small 
businesses, it will not eliminate the large-scale challenges facing 
small businesses as a result of the COVID-19 crisis and ensuing 
disruptions to individual industries, the broader economy, purchasing 
power of these businesses' consumers, and investor confidence.
    In the alternative, we could have allowed the temporary final rules 
to expire. Not extending the relief would impose costs and reduce the 
flexibility for small issuers adversely affected by COVID-19 seeking to 
meet their financing needs through Regulation Crowdfunding. It also 
would create competitive disparities for otherwise similar issuers that 
initiate offerings before and after the expiration of the existing 
relief (August 31, 2020). As a general matter, the flexibility to 
access capital under Regulation Crowdfunding on an expedited basis 
facilitates capital formation and reduces some of the barriers to 
accessing capital markets for small issuers, allowing some issuers to 
raise additional capital or to optimize their financing cost through a 
more efficient and streamlined offering process.\40\ By providing 
targeted relief in a market segment that primarily attracts small 
businesses, which are disproportionately affected by downturns, the 
temporary rules also serve to incrementally enhance competition between 
small businesses and larger businesses (which tend to be less 
financially constrained).\41\
---------------------------------------------------------------------------

    \40\ See also supra notes 11, 12, and 14.
    \41\ Research has related small size to financing constraints, 
and conversely, larger size to being less financially constrained. 
See, e.g., Nathalie Moyen (2004) Investment-Cash Flow Sensitivities: 
Constrained versus Unconstrained Firms, Journal of Finance 59(5), 
2061-2092; Christopher Hennessy, Amnon Levy, and Toni Whited (2007) 
Testing Q Theory with Financing Frictions, Journal of Financial 
Economics 83(3), 691-717. Other studies also show that diversified 
firms can rely on internal capital markets to mitigate financing 
constraints. See, e.g., Venkat Kuppuswamy and Bel[eacute]n 
Villalonga (2016) Does Diversification Create Value in the Presence 
of External Financing Constraints? Evidence from the 2007-2009 
Financial Crisis, Management Science 62(4), 905-923 (showing that 
``the value of corporate diversification increased during the 2007-
2009 financial crisis'' and that ``conglomerates' access to internal 
capital markets became more valuable''). See also supra note 25.
---------------------------------------------------------------------------

    We recognize that the alternative of allowing the temporary rules 
to expire could incrementally decrease concerns about investor 
protection,\42\ either due to the investors' reduced time period within 
which to make an informed decision about an offering or the increased 
ability of opportunistic issuers seeking to exploit COVID-19 concerns 
to raise capital from investors through crowdfunding in an expedited 
timeframe. Generally, however, the aggregate incremental effect of the 
temporary rules on retail investor protection is likely limited by 
various factors, including the tailoring of the relief (through the 
eligibility requirements and the narrow scope and time-limited nature 
of the relief) and the modest size of the Regulation Crowdfunding 
market compared to other market segments that draw retail investors. 
Importantly, the eligibility requirements exclude issuers that were 
noncompliant with the requirements of Regulation Crowdfunding in 
previous offerings in which they sold securities. Further, to the 
extent that investors know less about newly formed issuers with a 
limited track record, the incremental risk of the temporary relief to 
investors is reduced by the exclusion from eligibility of issuers 
formed, or with operations for, less than six months prior to the 
offering. This limitation on eligibility will tailor the relief to 
assist existing issuers that require additional funds because of 
adverse effects caused by the closures and safety measures designed to 
slow the spread of COVID-19. Further, issuers are required to disclose 
reliance on the temporary rules to investors, enabling more informed 
decisions. Moreover, while issuers may solicit investor interest after 
an initial Form C filing without certain financial disclosures, 
intermediaries are not allowed to accept investor commitments before 
the issuer provides all required financial information.
---------------------------------------------------------------------------

    \42\ See also Temporary Amendments Adopting Release, at 27122; 
Better Markets letter.
---------------------------------------------------------------------------

    In addition, we note that several essential safeguards contained in 
the 2015 Regulation Crowdfunding rules continue to apply to issuers 
that rely on the temporary rules. Crucially, offering and investment 
limits serve to limit the potential magnitude of investor losses, 
irrespective of cause. Further, Regulation Crowdfunding offerings will 
continue to be conducted through registered crowdfunding 
intermediaries, which remain subject to Commission and FINRA oversight. 
Crowdfunding intermediaries remain required to take measures to reduce 
the risk of fraud, provide investor education materials and issuer 
disclosures to investors, and meet other substantive requirements of 
Regulation Crowdfunding. Intermediaries remain required to provide 
communications channels on the online platform to allow investors to 
draw on the wisdom of the crowd, particularly in analyzing dynamic 
information about short-term offerings. Issuers remain subject to the 
extensive disclosure requirements of Form C as well as annual report 
obligations. While the temporary rules provide exceptions to certain 
timing requirements of Regulation Crowdfunding for eligible issuers, 
investors remain able to rescind their commitments within 48 hours from 
the time of making their commitment, and from the time of a material 
change to the offering. These safeguards, as well as various other 
requirements of Regulation Crowdfunding offerings may have served as 
key deterrents to potential misconduct. Since the inception of 
Regulation Crowdfunding, there have been relatively few enforcement 
actions taken against issuers and intermediaries in the crowdfunding 
market.\43\ Staff is not aware of an increase in misconduct due to the 
adoption of the temporary rules. However, this inference is inherently 
limited by the difficulty of identifying misconduct.
---------------------------------------------------------------------------

    \43\ See 2019 Regulation Crowdfunding Report, at 5.
---------------------------------------------------------------------------

    As another alternative, we could extend the relief for a shorter or 
longer time period than specified in these amendments. The alternative 
of extending the relief for a shorter (longer) time period would lead 
to fewer (more) potential issuers being afforded the flexibility in 
capital raising under the temporary rules, compared to the amendments. 
Because of the severe and continuing economic impact of the COVID-19 
crisis, we believe that the extension of the temporary rules is 
appropriate.\44\
---------------------------------------------------------------------------

    \44\ As another alternative, we could extend some but not all of 
the provisions of the temporary rules, or modify further some of the 
provisions of the temporary relief. For a detailed discussion of the 
economic effects of the individual provisions and the alternatives 
involving modifications of the provisions in the temporary rules, 
see Temporary Amendments Adopting Release, at 27121-31.

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[[Page 54490]]

IV. Procedural and Other Matters

    The Administrative Procedure Act (``APA'') generally requires an 
agency to publish notice of a rulemaking in the Federal Register and 
provide an opportunity for public comment. This requirement does not 
apply, however, if the agency ``for good cause finds . . . that notice 
and public procedure are impracticable, unnecessary, or contrary to the 
public interest.'' \45\ The APA also generally requires that an agency 
publish an adopted rule in the Federal Register at least 30 days before 
it becomes effective. This requirement does not apply, however, if the 
agency finds good cause for making the rule effective sooner.\46\
---------------------------------------------------------------------------

    \45\ 5 U.S.C. 553(b)(3)(B).
    \46\ 5 U.S.C. 553(d)(3).
---------------------------------------------------------------------------

    Given the temporary nature of both the relief contemplated by the 
temporary final rules and the extension of such relief, as well as the 
significant, unprecedented, and immediate impact of COVID-19 on 
affected issuers, as discussed above, the Commission finds that good 
cause exists to dispense with notice and comment as impracticable, 
unnecessary, or contrary to the public interest, and to act immediately 
to extend the applicability and expiration dates of the temporary 
amendments to Rules 100, 201, 301, 303 and 304 of Regulation 
Crowdfunding.\47\ In particular, small businesses continue to be 
affected by the closures and safety measures designed to slow the 
spread of COVID-19 and may face urgent funding needs \48\ that could be 
addressed by use of the internet to reach potential investors. In the 
current circumstances, a delay in implementation would substantially 
undermine the relief provided by the temporary rules and could 
exacerbate the existing challenges faced by many small businesses in 
urgent need of capital to continue their operations.
---------------------------------------------------------------------------

    \47\ This finding also satisfies the requirements of 5 U.S.C. 
808(2), allowing the temporary final rules to become effective 
notwithstanding the requirement of 5 U.S.C. 801 (if a Federal agency 
finds that notice and public comment are impractical, unnecessary or 
contrary to the public interest, a rule shall take effect at such 
time as the Federal agency promulgating the rule determines). The 
temporary final rules also do not require analysis under the 
Regulatory Flexibility Act. See 5 U.S.C. 604(a) (requiring a final 
regulatory flexibility analysis only for rules required by the APA 
or other law to undergo notice and comment). One commenter expressed 
concern that the Commission adopted the temporary final rules 
without public input. See Better Markets letter. However, consistent 
with the discussion above, we believe this approach was warranted 
given the extraordinary challenges faced by many issuers under the 
current circumstances as well as the fact that any delay in 
implementation would have substantially undermined the intended 
benefits of the temporary relief.
    \48\ See supra note 1.
---------------------------------------------------------------------------

    The temporary final rules provide relief from certain financial 
information requirements of Regulation Crowdfunding. In addition, the 
temporary final rules require issuers relying on the temporary relief 
to provide certain additional disclosures, although, as we stated in 
the Temporary Amendments Adopting Release, we expect the burden of 
those disclosures to be minimal. We also stated in the Temporary 
Amendments Adopting Release that overall, we expect the temporary final 
rules to result in a net decrease in compliance burden per form for 
Form C (OMB Control No. 3235-0307); however, because of a possible 
increase in the number of issuers relying on Regulation Crowdfunding, 
we believe that the net change in paperwork burden will be minimal.\49\ 
Accordingly, we did not adjust the burden or cost estimates associated 
with existing collections of information under Regulation Crowdfunding 
for purposes of the Paperwork Reduction Act of 1995.\50\ The extension 
of the applicability and expiration dates of the temporary final rules 
does not change our analysis.
---------------------------------------------------------------------------

    \49\ We note that the temporary nature of the amendments and the 
inherent uncertainty in estimating how many issuers will take 
advantage of the temporary relief makes estimation of the net change 
in paperwork burden difficult.
    \50\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------

    Pursuant to the Congressional Review Act,\51\ the Office of 
Information and Regulatory Affairs has designated the temporary final 
rules as a ``major rule,'' as defined by 5 U.S.C. 804(2).
---------------------------------------------------------------------------

    \51\ 5 U.S.C. 801 et seq.
---------------------------------------------------------------------------

V. Statutory Basis

    We are temporarily amending Rules 100, 201, 301, 303, and 304 of 
Regulation Crowdfunding and Form C under the authority set forth in the 
Securities Act (15 U.S.C. 77a et seq.), particularly, Section 28 
thereof as follows, and the expiration date for the temporary final 
rules published May 7, 2020 (85 FR 27116) is extended from March 1, 
2021, to September 1, 2021.

List of Subjects

17 CFR Part 227

    Crowdfunding, Funding portals, Intermediaries, Reporting and 
recordkeeping requirements, Securities.

17 CFR Part 239

    Administrative practice and procedure, Reporting and recordkeeping 
requirements, Securities.

    In accordance with the foregoing, title 17, chapter II of the Code 
of Federal Regulations is amended as follows:

PART 227--REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS

0
1. The authority citation for part 227 continues to read as follows:

    Authority:  15 U.S.C. 77d, 77d-1, 77s, 77z-3, 78c, 78o, 78q, 
78w, 78mm, and Pub. L. 112-106, secs. 301-305, 126 Stat. 306 (2012).


Sec.  227.100  [Amended]

0
2. In Sec.  227.100(b)(7) introductory text, remove the date ``August 
31, 2020'' and add in its place the date ``February 28, 2021''.


Sec.  227.201  [Amended]

0
3. In Sec.  227.201(z) introductory text, remove the date ``August 31, 
2020'' and add in its place the date ``February 28, 2021''.


Sec.  227.301  [Amended]

0
4. In Sec.  227.301(d), remove the date ``August 31, 2020'' and add in 
its place the date ``February 28, 2021''.


Sec.  227.303  [Amended]

0
5. In Sec.  227.303(g)(1) introductory text and (2), remove the date 
``August 31, 2020'' and add in its place the date ``February 28, 
2021''.


Sec.  227.304  [Amended]

0
6. In Sec.  227.304(e) introductory text, remove the date ``August 31, 
2020'' and add in its place the date ``February 28, 2021''.

PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

0
7. The general authority citation for part 239 continues to read as 
follows:

    Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-3, 
77sss, 78c, 78l, 78m, 78n, 78o(d), 78o-7 note, 78u-5, 78w(a), 78ll, 
78mm, 80a-2(a), 80a-3, 80a-8, 80a-9, 80a-10, 80a-13, 80a-24, 80a-26, 
80a-29, 80a-30, and 80a-37; and sec. 107, Pub. L. 112-106, 126 Stat. 
312, unless otherwise noted.
* * * * *


0
8. In Form C (referenced in Sec.  239.900) remove the words ``August 
31, 2020'' in the second paragraph to the introductory paragraphs in 
the Optional Question and Answer Format for an Offering Statement and 
add, in their place, the words ``February 28, 2021''.

    By the Commission.

    Dated: August 28, 2020.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2020-19468 Filed 8-31-20; 11:15 am]
BILLING CODE 8011-01-P


