NIBA Industry Alert: SEC Proposes Rules to Implement JOBS Act Provision About General Solicitation and Advertising in Securities Offerings
U.S. securities regulators proposed lifting a long-standing ban on the advertising of private securities offerings, a measure that could give a boost to private companies and hedge funds but has some critics worried that it paves the way to fraud. 


The Securities and Exchange Commission voted 4-1 August 29, 2012 to issue the plan that would allow companies to advertise to investors so long as they take "reasonable steps" to verify that purchasers are "accredited investors." See details in SEC Press Release below.


It is the first rule the SEC has proposed as part of the JOBS Act. The public will have 30 days to comment on the proposal before it is finalized, although Republican Commissioners criticized the agency for not bringing the rule into effect immediately. 


SEC Chairman Mary Schapiro voted in favor of the rule but expressed concern that the rule's rollback may have the potential to harm investors. "I recognize that there are very real concerns about the potential impact of lifting the ban on general solicitation," SEC Chairman Mary Schapiro said in prepared remarks.

"While I'm prepared to bring forward today's narrow proposal, I look forward to the continued examination of this critically important market."

Stay tuned, this will be a new frontier! 


For more details click here


NOTE: Broker-dealers participating in offerings relying on proposed Rule 506(c) would continue to be subject to the rules of FINRA regarding communications with the public. See FINRA Rule 2210. 


Michael Fugler, NIBA Advisory Committee Chairman

Jim Twaddell, NIBA Educational Committee Chairman

Emily Foshee, NIBA Executive Director

View our profile on LinkedIn   Follow us on Twitter   Visit our blog