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Obama Reiterates Call for Regulation A Reform

As a follow up to his State of the Union address, Pres. Obama yesterday issued a press release calling for a number of initiatives to help small business. Among them, it said, "The President is calling to raise the offering limit under Regulation A from $5 million to $50 million, coupled with strong investor protections."

As we recall, Regulation A offers a simpler offering circular to be distributed as a way to complete an initial public offering. Let's hope the final bill includes meaningful state "blue sky" law exemptions for Reg A offerings. Could this be one of the thing that happens during the Presidential "silly season"? I sure hope so.

In addition, the President called for "crowdfunding" to be easier to do (the SEC and Congress are both working on this), the creation of a so-called IPO "on-ramp" (a blue-ribbon Treasury panel recommended easing into financial disclosure requirements over a period of years and he supports it), and expanding the Small Business Investment Company (SBIC) program.

Besides the Regulation A reform, I wish we could expand the availability of short-form registration for public offerings to all public reporting companies, not just those with $75 million in market value. That would help a lot.

But some good stuff there. We'll be talking about crowd funding and the on-ramp in future entries. That's where a lot of the wonkish types are chattering these days.

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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