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Category Archives: SEC News

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2014 SEC Government-Business Forum on Small Business Capital Formation Considers Adding Qualitative Requirements to the Standards for an “Accredited Investor” and Steps Needed to Make Exchanges More Hospitable to Smaller Companies

Posted in Accredited Investor Standard, SEC News

On Thursday, November 20th, the 2014 SEC Government-Business Forum on Small Business Capital Formation met at the SEC headquarters in Washington, D.C. The forum was attended by SEC Chairwoman Mary Jo White, Commissioner Gallagher, SEC staff (the “Staff”) and featured presentations by lawyers, an Arkansas state securities regulator, and the SEC’s Senior Financial Economist, among… Continue Reading

Meeting of the Advisory Committee on Small and Emerging Companies

Posted in SEC News

The SEC announced the next meeting of the Advisory Committee on December 17th, beginning at 9:30 a.m. The committee will focus on the interests and priorities of emerging and smaller public companies. Meetings are open to the public. Please see the notice for additional details: http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370543499940#.VG5iVk10xpB.

SEC Commissioners on Capital Formation

Posted in Capital Formation, SEC News

Recently, various SEC Commissioners, including Commissioner Stein and Commissioner Gallagher, have addressed issues related to capital formation in their public remarks. At a Los Angeles County Bar Association conference, both noted that one of the Commission’s most important objectives remains facilitating capital formation, while, of course, preserving important investor protections. In her remarks, Commissioner Stein… Continue Reading

SEC Small Business Forum

Posted in SEC News

The SEC has announced that the day prior to its Government Business Forum on Small Business Capital Formation, it will host jointly with the Small Business Administration to highlight additional ways that small businesses may seek to raise funds. See announcement for details regarding the November 19 event: http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370543438456#.VGkj6010ziM. The SEC also announced the detailed… Continue Reading

SEC Small Business Capital Formation Forum

Posted in Events, SEC News

The SEC recently announced that the annual Government-Business Forum on Small Business Capital Formation will be held on November 20th at the SEC in Washington.  The morning session of the forum will feature panel discussions on the definition of an accredited investor and secondary market liquidity for securities of small businesses. During the afternoon session,… Continue Reading

Referral Fees and Commission Sharing: When May Broker-Dealers Share Their Fees with Non-Brokers?

Posted in FINRA, SEC News

FINRA recently filed proposed rule changes with the SEC addressing when broker-dealers may pay referral fees or otherwise share compensation with persons who are not registered as broker-dealers. The proposed rule changes are subject to the SEC’s approval. If approved, new Rule 2040 and related conforming changes to other FINRA rules will go into effect… Continue Reading

Accredited Investor Definition Update

Posted in Accredited Investor Standard, SEC News

The SEC’s Investor Advisory Committee recommended on Thursday that the definition of “accredited investor” in Rule 501(a) under the Securities Act undergo some significant changes.  The Committee was established pursuant to the Dodd-Frank Act with a mandate to consider revisions to the accredited investor standards. The Committee’s recommendations reflect concerns that the current definition is… Continue Reading

New C&DI Published on Intrastate Exemption

Posted in SEC News

Last week, the SEC Staff posted the following C&DI relating to Rule 147 compliance when an issuer uses its own website in connection with a securities offering. Question: Can an issuer use its own website or social media presence to offer securities in a manner consistent with Rule 147? Answer: Issuers generally use their websites… Continue Reading

The More Things Change….

Posted in General Solicitation, Regulation A+, Regulation D, Rule 144A, Rule 506 Rulemaking, SEC News

Today, September 23rd, is the one year anniversary of the effective date of the changes relaxing the prohibition against general solicitation in certain offerings made under Rule 506 and resales made pursuant to Rule 144A. The SEC has not moved forward with the rules it proposed in 2013 that would make certain changes to Regulation… Continue Reading

CROWDFUNDING—Meanwhile, at the States…

Posted in Crowdfunding, SEC News

We continue to wait for the SEC to issue final crowdfunding regulations— the comment period ended in January.  Meanwhile, some states have sensed an opportunity.  Section 3(a)(11) of the Securities Act exempts “intrastate” offerings from the Securities Act when the securities sold are part of any issue “offered and sold only” to persons resident within… Continue Reading

SEC commissioner weighs in on regulatory process and capital formation

Posted in Crowdfunding, SEC News

SEC Commissioner Daniel Gallagher urged the commission on Wednesday to fulfill its mandate to promote capital formation. The SEC should institutionalize an enhanced small business focus, Gallagher said in his prepared remarks, because its current small business mandates are “generally treated as afterthoughts on the ‘back end’ of the rulemaking process.” Gallagher challenged the SEC… Continue Reading

Weeding Out Bad Actors

Posted in Rule 506 Rulemaking, SEC News

Issuers, placement agents and attorneys have been working with the new Rule 506(d) “bad actor” provisions for almost one year.  Our Client Alert summarizes recent SEC guidance in this area, and provides some practical tips on how to identify any bad actors in advance of a Rule 506 offering.   We also take a look at… Continue Reading

Kind-a-Sort-a

Posted in CFTC, General Solicitation, SEC News

In the last few days, we received a few inquiries regarding our prior post on the CFTC’s temporary relief permitting funds to engage in general solicitation to the text that the funds were conducting Rule 506(c) offerings or relying on Rule 144A for resales.  Following the SEC’s amendments to Rule 506 and Rule 144A, many… Continue Reading

Reg A+ Challenged Again

Posted in Regulation A+, SEC News

Another letter to the SEC from the Hill challenges the Regulation A+ proposal.  This time, the authors question the authority of the SEC in defining “qualified purchaser” as an offeree or purchaser in a Tier 2 Reg A+ offering.  The letter (available here:  http://www.nasaa.org/wp-content/uploads/2014/08/Senate_Regulation-A-Letter-FINAL-08-01-14.pdf) suggests that the SEC through the approach taken in its proposal… Continue Reading

SEC Investor Alert on Unregistered Offerings

Posted in Private Placements, SEC News

Earlier this week, the SEC’s Office of Investor Education issued an Investor Alert that highlights some of the warning signs for investors that an unregistered offering may be an investment scam.  The alert is available here:  http://www.sec.gov/oiea/investor-alerts-bulletins/ia_unregistered.html#.U-Pk66XD9l4.

Disclosure Reform

Posted in SEC News

Today, the US Chamber of Commerce’s Center for Capital Markets Competitiveness hosted a half-day session on “Corporate Disclosure Reform: Ensuring a Balanced System that Informs and Protects Investors and Capital Formation.”  The session, which was webcast through the Chamber’s site, included various presentations from former SEC officials, as well as from Keith Higgins, Director of… Continue Reading

Hearing on Oversight of the SEC’s Division of Corporation Finance

Posted in Crowdfunding, Regulation A+, SEC News

As we previously reported, the Director of the SEC’s Division of Corporation Finance, Keith Higgins, testified before the House Financial Services Committee on a broad range of matters, including the SEC’s progress in implementing the rules required by the Dodd-Frank Act and the JOBS Act, as well as the Division’s disclosure reform initiative.  Congressmen commented… Continue Reading

SEC Requires Floating NAV for Institutional Money Market Funds; IRS Eases Tax Reporting Burden for Fund Investors

Posted in SEC News

A divided Securities and Exchange Commission today adopted rules that will require floating net asset values (NAVs) for institutional money market funds and give most money market funds the discretion to impose liquidity fees and gates.  The 3-2 vote, which closes the latest tumultuous chapter of money market fund regulatory reform, will fundamentally change the way that… Continue Reading

Financial Services Committee Hearing May Provide Insights

Posted in JOBS Act News, SEC News

This Thursday, July 24th, the Capital Markets and Government Sponsored Enterprises Subcommittee will hold a hearing with Keith Higgins, Director of the SEC’s Division of Corporation Finance, to review the SEC’s rule proposals to implement the JOBS Act and the Dodd-Frank Act, proxy advisory firms, as well as Chair Mary Jo White’s call for a… Continue Reading

SEC Staff Provides Rule 506(c) Verification Guidance

Posted in Private Placements, Rule 506 Rulemaking, SEC News

The SEC Staff recently provided further guidance on the provisions of Rule 506(c) of Regulation D which permit the use of general solicitation and general advertising when sales are made only to accredited investors and the issuer verifies the accredited investor status of the purchasers.  The Staff has now clarified certain aspects of the verification… Continue Reading

SEC Staff Closes Loophole on BDC Asset Coverage Requirements

Posted in 1940 Act, BDCs, Investment Management, SBIC, SEC News

In a Guidance Update published on June 30, 2014 by the SEC’s Division of Investment Management, the staff closed a loophole that allowed business development companies (BDCs) with wholly owned Small Business Investment Company (SBIC) subsidiaries to avoid meeting asset coverage requirements when the SBIC subsidiaries issue debt that is not guaranteed by the Small… Continue Reading