SEC amendments to raise the disclosure threshold for non-reporting companies that provide securities to employees and other service providers through compensatory benefit plans were published in the Federal Register. The amendments became effective on July 23, 2018.
As previously covered, the threshold was raised pursuant to the Economic Growth, Regulatory Relief and Consumer Protection Act. Under Securities Act Rule 701, certain issuers offering compensatory benefit plans were previously exempt from supplying risk-factor disclosures and financial statements to investors if the aggregate sales price or amount of securities sold during any 12-month period does not exceed $5 million. The cap was increased to $10 million.
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