The Jumpstart Our Business Startups Act (the JOBS ACT) required the SEC to reduce the regulatory burden on issuers seeking to raise money through crowd funding and similar platforms.  While it took the SEC a bit more than three years to define their regulatory approach the new regulations go into effect on May 2016.  The regulation as it appears in the Federal Register is available here (Form C).

Over time this will provide an opportunity to test some unique research questions.  Academic researchers have struggled for years to collect data on companies in their early stages.  These rules will provide access to that data for companies that seek and are successful raising capital from the public under these alternate and early stages of capital raising.  Companies are going to have to file annual financial statements – though it appears that they will have a range of choices with respect to the level of detail and the nature of the certification associated with those financial statements (from certification by the CEO to an audit).  That range of options alone suggests some interesting opportunities to measure the value of an audit.  Potentially, researchers will have data on how markets perceive the value of an audit if there is variation in the choices these early stage companies make when they go public.

We will be watching for the initial filings of Form C’s in May.  If I have not noted this yet, the next step in our development schedule is to provide our users the ability to use our platform to access any filings at anytime.