(a) Generally. An investor may cancel an investment commitment for any reason until 48 hours prior to the deadline identified in the issuer's offering materials. During the 48 hours prior to such deadline, an investment commitment may not be cancelled except as provided in paragraph (c) of this section.

(b) Early completion of offering. If an issuer reaches the target offering amount prior to the deadline identified in its offering materials pursuant to §227.201(g), the issuer may close the offering on a date earlier than the deadline identified in its offering materials pursuant to §227.201(g), provided that:

(1) The offering remains open for a minimum of 21 days pursuant to §227.303(a);

(2) The intermediary provides notice to any potential investors, and gives or sends notice to investors that have made investment commitments in the offering, of:

(i) The new, anticipated deadline of the offering;

(ii) The right of investors to cancel investment commitments for any reason until 48 hours prior to the new offering deadline; and

(iii) Whether the issuer will continue to accept investment commitments during the 48-hour period prior to the new offering deadline.

(3) The new offering deadline is scheduled for and occurs at least five business days after the notice required in paragraph (b)(2) of this section is provided; and

(4) At the time of the new offering deadline, the issuer continues to meet or exceed the target offering amount.

(c) Cancellations and reconfirmations based on material changes.

(1) If there is a material change to the terms of an offering or to the information provided by the issuer, the intermediary must give or send to any investor who has made an investment commitment notice of the material change and that the investor's investment commitment will be cancelled unless the investor reconfirms his or her investment commitment within five business days of receipt of the notice. If the investor fails to reconfirm his or her investment within those five business days, the intermediary within five business days thereafter must:

(i) Give or send the investor a notification disclosing that the commitment was cancelled, the reason for the cancellation and the refund amount that the investor is expected to receive; and

(ii) Direct the refund of investor funds.

(2) If material changes to the offering or to the information provided by the issuer regarding the offering occur within five business days of the maximum number of days that an offering is to remain open, the offering must be extended to allow for a period of five business days for the investor to reconfirm his or her investment.

(d) Return of funds if offering is not completed. If an issuer does not complete an offering, an intermediary must within five business days:

(1) Give or send each investor a notification of the cancellation, disclosing the reason for the cancellation, and the refund amount that the investor is expected to receive;

(2) Direct the refund of investor funds; and

(3) Prevent investors from making investment commitments with respect to that offering on its platform.

(e) Temporary requirements. The following shall apply in lieu of paragraphs (a) and (b) of this section with respect to an offering initiated between May 4, 2020, and February 28, 2021, that is intended to be conducted on an expedited basis due to circumstances relating to COVID-19:

(1) An investor may cancel an investment commitment for any reason within 48 hours from the time of his or her investment commitment (or such later period as the issuer may designate). After such 48 hour period, an investment commitment may not be cancelled except as provided in paragraph (c) of this section; and

(2) If an issuer has received aggregate investment commitments for which the right to cancel pursuant to paragraph (e)(1) has lapsed covering the target offering amount prior to the deadline identified in its offering materials pursuant to §227.201(g), the issuer may close the offering on a date earlier than the deadline identified in its offering materials pursuant to §227.201(g), provided that:

(i) The issuer has complied with §227.201(aa);

(ii) The intermediary provides notice to any potential investors, and gives or sends notice to investors that have made investment commitments in the offering, that the target offering amount has been met; and

(iii) At the time of the closing of the offering, the issuer continues to meet or exceed the target offering amount.

[80 FR 71537, Nov. 16, 2015, as amended at 85 FR 27132, May 7, 2020; 85 FR 54490, Sept. 2, 2020; 86 FR 3592, Jan. 14, 2021]