Re: Concept Release on Harmonization of Securities Offering Exemptions; File Number S7-08-19

The most important safe harbor under from registration under the Securities Act is Rule 506(b), which exempts an unlimited amount of securities from registration provided the issuer meets certain conditions. Although 506(b) permits up to 35 non-accredited investors to participate in offerings under the exemption, issuers almost always limit offerings to accredited investors. Although issuers exclude non-accredited investors for various reasons, one important reason is that the presence of purchasers other than accredited investors triggers disclosure obligations that are prohibitively costly for many private offerings. In this comment, we propose a pathway for issuers to allow non-accredited investors (whom we call "covered investors") to invest alongside accredited investors in limited amounts without triggering the disclosure obligations otherwise applicable. Our proposal would allow covered investors to participate in Rule 506(b) offerings up to the amount of accredited investor participation, with limits on any individual covered investor's purchases drawn from Tier 2 of Regulation A. Our proposal would maintain the prohibition on general solicitation or advertising, ensuring that non-accredited investors are not targeted for investments. We believe this reform would remove a legal barrier that results in the systematic exclusion of investors based solely on their wealth or income, while maintaining the necessary level of investor protection.