[author: Kyle Crawford]
On September 22, 2025, the Securities and Exchange Commission’s (the “Commission” or “SEC”) Office of the Advocate for Small Business Capital Formation (“OASB”) published its report summarizing policy recommendations made during the 44th Annual Small Business Forum (the “Forum”). The Forum brought members of the public and private sectors together to provide feedback relating to capital formation. The report puts forward 15 policy recommendations, including the Commission’s responses. Among these, recommendations included the following:
- Expanding the accredited investor definition to include additional measures of sophistication, including an investor test;
- Amending Regulation Crowdfunding to ease the requirements for issuers (such as those related to advertising and financial statements) and compliance with investment limites for non-accredited investors. In its response, the SEC noted that its 2025 Regulatory Agenda of Federal Regulatory and Deregulatory Actions (the “Regulatory Agenda”) includes initiatives to consider updates to the exempt offering framework;
- Expanding retail investor access to private investments, including access to registered funds that invest in private offerings. The SEC response noted that the SEC staff already is addressing enhancing retail access to the private markets through registered funds as evidenced by the relatively recent change in guidance relating to closed end funds;
- Preempting state blue sky laws for off-exchange secondary trading in companies that make available robust, publicly accessible, and timely public information, such as the information required by Regulation A Tier 2. The Commission noted that it previously solicited public comment on whether federal preemption should be extended to additional offers and sales of securities in the June 2019 concept release that requested comment on ways to simplify, harmonize, and improve the exempt offering framework and in the March 2020 proposing release relating to harmonization of amendments to streamline the Commission’s rules for exempt offerings;
- Streamlining the SEC registration process for smaller businesses. In its response, the SEC again pointed to its Spring 2025 Regulatory Agenda, which includes proposed rulemaking relating to enhancing accommodations for emerging growth companies, simplifying filer status for reporting companies, and modernizing the shelf registration process;
- Collaborating with clearing firms, transfer agents, and broker-dealers to improve the clearing and settlement process for small public companies and securities traded over-the-counter. The SEC noted that its staff regularly engages with market participants, including these types of entities and market participants;
- Revising Regulation A to increase the Tier 2 offering limit from $75 million to $150 million; and
- Revising Regulation A to allow for a permanent exemption from registration under Exchange Act Section 12(g) so a Regulation A issuer may continue to report under Regulation A. In its response, the SEC noted that it raised the Tier 2 Regulation A offering limit from $50 million to $75 million in 2020. The SEC also noted it is required to review the offering limit in Regulation A biannually.
The report notes that participants identified the principal challenges confronting small cap companies as liquidity, compliance costs, reporting requirements and stock price volatility. The Forum recommendations are often considered by the SEC in connection with rulemaking. Read the full report.
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