The Securities and Exchange Commission (SEC) has proposed a rule change to increase the amount of money that can be committed to a “qualifying venture capital fund” from $10 million to $12 million. This change is in accordance with the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, which requires the Commission to index the dollar figure for this threshold to inflation every five years. The proposed rule would also require the use of the Personal Consumption Expenditures (PCE) Index for future adjustments. In addition, legislation has been introduced in Congress to increase the threshold to $150 million and expand the number of beneficial owners. The SEC will accept comments on the rule change for 30 days after it is published in the Federal Register.
The SEC has submitted a rule change to increase the dollar amount that can be committed to a qualifying venture capital fund.
The increase would raise the cap from $10 million to $12 million.
The proposed rule is in accordance with the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, which requires the SEC to index the dollar figure for this threshold to inflation every five years.
The SEC has stated that both the Personal Consumption Expenditures (PCE) Index and the Consumer Price Index for All Urban Consumers (CPI-U) yielded similar results, but the proposed rule would require the use of the PCE Index going forward.
Legislation has been introduced in Congress that proposes a more significant increase, raising the threshold to $150 million and increasing the number of beneficial owners.
Once the rule change is published in the Federal Register, comments will be accepted for 30 days.
