SEC Taking Up Reg D End of Ban on General Solicitation Next Week

The SEC's published agenda for its August 22, 2012 open meeting includes, as item 3, the following:

Item 3: The Commission will consider rules to eliminate the prohibition against general solicitation and general advertising in securities offerings conducted pursuant to Rule 506 of Regulation D under the Securities Act and Rule 144A under the Securities Act, as mandated by Section 201(a) of the Jumpstart Our Business Startups Act.

Some were quoted in the current DealFlow Report saying the SEC may even adopt a temporary rule on August 22 subject to receiving comments and turning it into a permanent rule. That is different from their normal approach of publishing a proposal that is not implemented until comments are received and changes made.

The DealFlow Report also mentioned that three Republican Senators have written to SEC Chairman Mary Schapiro imploring her to use "reasonable steps" to require issuers to verify the accredited status of a purchaser in a Regulation D offering with general solicitation.

We'll see....this has the potential to be big.

For additional insights on reverse mergers, SPACs, other alternatives to traditional initial public offerings, the small and microcap markets and the economy, visit the Reverse Merger and SPAC Blog  by David N. Feldman, Esq., Partner of Richardson & Patel LLP.

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