As many know, when the SEC passed rules allowing companies and private funds to use general solicitation and advertising in certain private securities offerings as mandated by the Jumpstart Our Business Startups (JOBS) Act, they also proposed a series of rules that would add investor protections in such offerings. These include a notice filing on Form D at least 15 days before general solicitation starts, a requirement to file solicitation materials with the SEC for the next two years, and the temporary loss of the benefits of the Regulation D safe harbor if any Form D is filed late.
Comments have been almost entirely negative to key elements of the proposal. But in talking about this in a speech to hedge fund managers last week, SEC Chair Mary Jo White said this: ”To date, we have received more than 450 comment letters on the proposed amendments… And, recently, we extended the time for the public to comment on the proposal. This is an important proposal, and there are a lot of different views about it, so it is important to have an opportunity to consider these views. Issues raised in the comment process contribute meaningfully to all of our rulemakings. But, for investors’ sake and the sake of the new marketplace, we need to move expeditiously toward adoption, following appropriate consideration of the comments. And we must get it right if we are going to make this new era of transparency and openness workable.”
We hope that the Commission will indeed give “appropriate consideration” to the comments, including almost universally negative views coming from the various bar associations who have weighed in. Make sure your voice is heard, no matter your views!
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