Proposed Temporary Amendment to Facilitate Option-Based Awards to Gig Workers

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The Securities and Exchange Commission released for comment proposed rules that would apply on a temporary basis to allow for broader reliance on Rule 701 and Form S-8 for stock-based compensation related awards to gig or platform workers.  These workers may not be employees or consultants eligible to receive stock-based awards under current Rule 701.  The proposed rules would amend Rule 701 by adding a temporary rule provision that, for five years, would enable issuers to use Rule 701 to compensate certain platform workers, subject to specified conditions. An issuer would be able to use the exemption to issue its securities on a compensatory basis to platform workers who, pursuant to a written contract or agreement, provide bona fide services by means of an internet-based platform or other widespread, technology-based marketplace platform or system provided by the issuer.  Under the proposed amendments, these offerings would be able to be registered using Form S-8.  The amendments would be available on a temporary basis in order to allow the SEC to assess whether there are any unintended consequences.  The proposal will be subject to a 60-day public comment period.

See the SEC press release and fact sheet here, as well as the proposing release here.

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