The Security Exchange Commission unanimously approved a new rule to relax regulations on certain “mini initial public offerings.” The rule applies to companies raising up to $50 million from the general public and removes “certain regulatory hurdles, such as approval from every state where the firm has investors,” according to a report by Bloomberg’s Dave Michaels.
While businesses are supporting the rule as widening access to capital, critics say looser regulation may “open the door to fraud.”
Michaels report says, “Investors who put money into firms through the mini-IPOs could eventually trade the shares on so-called venture exchanges, which are being studied by the SEC. The less-regulated markets could become a home for smaller companies whose shares trade less frequently, SEC Chair Mary Jo White said last month.”
Read the full story by Bloomberg here.
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