Bloomberg News

SEC Advisory Group Recommends Doubling 500-Shareholder Limit

February 02, 2012

(Updates with vote on raising limit for public offerings in second graph.)

Feb. 1 (Bloomberg) -- The U.S. Securities and Exchange Commission should double the threshold of owners a company can have before being forced to register with the regulator, according to recommendations from the SEC’s small-business advisory group.

The committee voted today in Washington to recommend the threshold be raised from 500 to 1,000. The group also recommended raising the dollar limit for so-called Regulation A public offerings from $5 million a year to $50 million before SEC registration is triggered. Though the committee also considered advising the SEC to consider allowing crowdfunding -- the soliciting and pooling of small investments, often online -- it postponed that vote because of concerns about limiting possible fraud.

“Your ideas continue to be an extremely important addition to the process and to our thinking,” said SEC Chairman Mary Schapiro before the votes. She said the recommendations “will become an important part of the work” of the staff.

After President Barack Obama directed federal agencies last year to ensure their rules promote economic growth while using the least burdensome tools to achieve regulatory ends, Schapiro asked her staff to review rules to relieve burdens on smaller companies. The House has passed parallel legislation, while senators have introduced similar measures and tried to attach them as amendments to bills on the Senate floor.

--Editors: Anthony Gnoffo, Gregory Mott

To contact the reporter on this story: Jesse Hamilton in Washington at

To contact the editor responsible for this story: Maura Reynolds at

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