April 11, 2012
As it deliberates Crowdfunding Act rules, the Commission should not overlook the extensive work previously done on small corporate offerings via the intrastate SCOR and Regulation A offering processes.
Specifically, the Commission should make standardization of ALL small corporate offering documents one of the goals of its Crowdfunding Act rulemaking efforts. Such a standardized document format would facilitate easy comparison between various offerings and offering types, regardless of funding portal or size or type of offering.
I therefore suggest that the best such offering document already exists: The 1999 version of SCOR Form U-7, created by the North American Securities Administrators Association, but, as yet, not adopted by the Commission. As part of the Commission's Crowdfunding Act rulemaking effort, the Commission should therefore adopt the 1999 SCOR U-7 so that it may be used for exempted intrastate SCOR offerings, Regulation A offerings, AND the new "crowdfunded" offerings. Such action would make it easiest for issuers to create intrastate SCOR and Reg. A offerings, in addition to their crowdfunded offerings, thereby creating additional funding options without significant additional expense to the issuer. This would also make it easiest for state securities officials to monitor issuers and offers for possible fraud or other misconduct, which the Crowfunding Act permits them to do.
However, if the Commission refuses to approve the newer 1999 version of U-7 for use with Regulation A offerings, then it should require "crowdfunding" issuers to use the original 1989 Form U-7, which the Commission previously adopted for Regulation A offerings.