CFIRA

SEC Schedules Hearing August 22, 2012 to Consider Rules to Lift Advertising Ban

The Securities and Exchange Commission will consider rules to eliminate the prohibition against general solicitation and advertising on securities during a public meeting schedule for August 22, 2012.  The Jumpstart Our Business Startups Act (JOBS Act) signed into law on April 5, 2012 requires the SEC to create rules lifting the current prohibition against advertising securities under Reg D, Rule 506 of the Securities Act. The JOBS Act set a deadline of July 4, 2012 for the rules, a deadline which SEC Chair Mary Schapiro admitted that the SEC would not be able to meet. She testified during a congressional subcommittee on June 28, 2012 that the SEC would endeavor to have such rules during the summer of 2012. The SEC afterwards scheduled an open meeting to consider the general solicitation rules for Wednesday, August 22, 2012 at 10:00 a.m., in the Auditorium, Room L-002.

Mary Schapiro, courtesy Securities and Exchange Commission

Ms. Schapiro explained that the JOBS Act imposed on the SEC the challenging task of creating rules to assure that issuers accept investments only from accredited investors who respond to an advertisement. “We want to create something that is workable and usable,” she said.

Ms. Schapiro further assured the committee that the SEC intends to meet the December 31, 2012 deadline under the JOBS Act to create rules for equity crowdfunding. The JOBS Act enables small businesses to offer up to $ 1 million in equity through crowdfunding, but the SEC first must implement rules before the launch of any equity crowdfunding offers.

Feature Image (c) Crestock

The Crowdfund Intermediary Regulatory Advocates

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