SEC Proposes Amendments to Modernize Framework for Securities Offerings and Sales to Workers

Washington, DC (STL.News) The Securities and Exchange Commission today announced that it has voted to propose amendments to Securities Act Rule 701, which provides an exemption from registration for the issuance of compensatory securities by non-reporting issuers, and Form S-8, the Securities Act registration statement for compensatory offerings by reporting issuers.

Additionally, in a companion release, the Commission also proposed rules to permit, on a temporary basis and subject to certain conditions, an issuer to provide equity compensation to certain “platform workers” who provide services available through the issuer’s technology-based marketplace platform.

The proposed amendments to Rule 701 and Form S-8 are designed to modernize the framework for compensatory securities offerings in light of the significant evolution in compensatory offerings and composition of the workforce since the Commission last substantively amended these regulations, allowing employees and other workers to receive equity compensation from their company while maintaining important investor protections.

“Today’s proposed amendments seek to modernize our requirements for including company securities in worker-company compensation arrangements so that workers have the opportunity to share in the growth of the business,” said Chairman Jay Clayton.  “I thank the staff for their continued efforts to review and improve our rules to better align them with today’s employment practices and the economy more generally.”

The Commission’s proposals are substantially informed by public comments received in response to the Commission’s July 2018 Concept Release on Compensatory Securities Offerings and Sales.  The public comment period for the proposed rule amendments will remain open for 60 days following publication of the release in the Federal Register.

NOTE: this is NOT the complete release.