"There is a great deal of excitement in the marketplace about the crowdfunding exemption," SEC Chairwoman Mary Jo White said Wednesday at a hearing to consider the new rules. "And I am pleased that we are in in a position today to adopt a rule proposal that would, upon adoption, permit crowdfunding to begin."  Under the proposed rules, companies would only be able to raise a maximum aggregate amount of $1 million through crowdfunding offerings in a 12-month period.  And investors would face similar caps: The SEC said in one year they would only be permitted to invest up to $2,000 or 5 percent of their annual income or net worth, whichever is greater, if both their annual income and net worth are less than $100,000. Alternatively, the SEC said people could invest up to 10 percent of their annual income or net worth, whichever is greater, if either their annual income or net worth is equal to or more than $100,000. During the 12-month period, these investors would not be able to purchase more than $100,000 of securities through crowdfunding.  (Read more: Crowdfunding for medical devices hits Web)  The companies would be subjected to certain disclosure requirements, too. Those include the following, the SEC said:  •Information about officers and directors as well as owners of 20 percent or more of the company.  •A description of the company's business and the use of proceeds from the offering.  •The price to the public of the securities being offered, the target offering amount, the deadline to reach the target offering amount, and whether the company will accept investments in excess of the target offering amount.  •A description of the financial condition of the company.  •Financial statements of the company that, depending on the amount offered and sold during a 12-month period, would have to be accompanied by a copy of the company's tax returns or reviewed or audited by an independent public accountant or auditor.  And finally, crowdfunding would only be permitted through an SEC registered intermediary, either a broker dealer or a "funding portal," which would be a new category of SEC registrant.  The SEC said it will seek public comment on the new rules for 90 days, and will then review comments and decide whether to modify or adopt the proposed rules.
The Securities and Exchange Commission is proposing placing limits on how much a company can raise and how much people can donate with crowdfunding.