In connection with today's meeting of the SEC's Advisory Committee on Smaller and Emerging Companies, Chair White made introductory remarks. Chair White touched on a number of the initiatives that the Advisory Committee had addressed prior to its recent renewal. Chair White also provided updates on a few matters, including the following:
- Proposed Changes to Rule 147 and Rule 504. The staff of the Commission is reviewing the comments received and developing recommendations for final rules for the Commission's consideration.
- Accredited Investor Study. The Commission encourages market participants to provide comments.
- Simplified Disclosure for Smaller Issuers. The Division of Corporation Finance is advancing its Disclosure Effectiveness initiative, which includes consideration of the disclosure requirements for smaller companies.
- Finders. The Staff in the Division of Trading and Markets continues to review this issue.
- Market Structure. Chair White referenced the tick size pilot program, which will be implemented later this year. Chair White noted that, "the Staff also continues to study and remain receptive to innovative industry efforts designed to facilitate secondary market liquidity for smaller companies."
The text of the remarks are available here: https://www.sec.gov/news/statement/chair-white-opening-remarks-acsec-022516.html.
Several materials have been posted to the SEC website that provide useful data regarding the private capital markets see below links:
- SEC's Division of Economic Research and Analysis (DERA) slides on Private Securities Offerings post-JOBS Act, providing data on exempt offerings, including data regarding the use of Rule 506(c) and Regulation A, available here: https://www.sec.gov/info/smallbus/acsec/private-securities-offerings-post-jobs-act-bauguess-022516.pdf.
The DERA presentation notes that during the period from September 23, 2013 through December 31, 2015, funds have conducted 392 offerings in reliance on Rule 506(c) and operating companies have conducted 187 such offerings, which is quite modest by comparison to the number of offerings made in reliance on Rule 506(b).
Since the effectiveness of the amended Regulation A, the report shows that 68 Regulation A filings have been made, but only three Regulation A offerings qualified to date.
- Access to Capital, Professor Jeffrey Sohl, Professor of Entrepreneurship and Director, Center for Venture Research, University of New Hampshire. Professor Sohl's presentation discusses the availability of equity capital for entrepreneurs, available here: https://www.sec.gov/info/smallbus/acsec-022516-access-to-capital-jeff-sohl.pdf.
- How Small and Mid-Size Businesses are Funding their Future, Brian Knight of the Milken Institute, discussing bank and nonbank debt financing, available here: https://www.sec.gov/info/smallbus/acsec-022516-access-to-capital-brian-knight.pdf.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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