Generally all offerings and sales of securities must be registered with the SEC unless they are all sold within one state [in which case that state's requirement must be met] or they are sold in a transaction exempt from Registration. The current canon for such exempt offerings is Regulation D, promulgated by the Securities and Exchange Commission (SEC).

1. Revision of Rule 506. The Act requires the SEC within 90 days,  to revise Rule 506 promulgated under its Regulation D (an offering of unlimited amounts of securities under prescribed rules), and its Rule 144A, to remove the interdiction on general solicitation of prospective "accredited investors" and general advertising in private offerings made in accordance with the Rules. This should open up the web for the solicitation of potential investors who meet the test for "accredited investors". However, it remains to be developed how an issuer can verify that its electronic offering is being made only to "accredited investors".

2. Small Company Capital Formation.  The SEC is instructed, by Rule or Regulation, to add a class of securities exempt from the requirement of Registration with the following characteristics:

(a) Amount of securities that may be offered and sold publicly within a 12 month period from $5 million to $50 million.

(b) The securities will not be "restricted securities" (they can be resold without concern about qualifying as an "exempt transaction").

(c) Any person offering or selling these securities will still be liable for false and misleading statements, etc.  (SEC Act 12(a)(2).

(d) SEC is to promulgate rules pursuant to which issuers may solicit interest in the Offering prior to filing an "offering statement".

(e) Audited financial statements must be filed annually with the SEC.

(f) The SEC may require the filing electronically of an "offering statement", inclusive of audited financial statements and other disclosures.

(g) The SEC may provide, by Rule or Regulation, disqualification provisions similar to those in the Dodd Frank Wall Street Reform and Consumer Protection Act ("bad boy" provisions)

3. Crowdfunding [new term].  The Act  Introduces a new term, Crowdfunding", for a new category of  exemption from "Registration" in an offering securities. The basic terms for this category are as follows:

(a) total amount of the raise: up to  $1,000,000 in a 12 month period

(b) a single investor is limited to investing:

(1) no more than $2,000 or 5% of his annual income or net worth if either his income or net worth is less than $100,000; and

(2) if his income or net worth is greater than $100,000 he may invest 10% of that annual income or net worth.

(c) sales must be though qualified "intermediaries", e.g., qualified brokers or "funding portals". 

(d) The broker or qualified intermediary has filing requirements with the SEC and offering compliance requirements