The Securities and Exchange Commission has announced that it will consider amendments to its private placement rules mandated by the JOBS Act, and related rule amendments, at an open meeting scheduled for July 10, 2013. The subject matter of the open meeting is described as follows in the open meeting notice:
* The Commission will consider whether to adopt amendments to eliminate the prohibition against general solicitation and general advertising in certain securities offerings conducted pursuant to Rule 506 of Regulation D under the Securities Act and Rule 144A under the Securities Act, as mandated by Section 201(a) of the Jumpstart Our Business Startups Act.
* The Commission will consider whether to propose amendments to Regulation D, Form D and Rule 156 under the Securities Act. The proposed amendments are intended to enhance the Commission��s ability to evaluate changes in the market and to address the development of practices in Rule 506 offerings.
* The Commission will consider whether to adopt amendments to disqualify securities offerings involving certain ��felons and other ��bad actors���� from reliance on the exemption from Securities Act registration pursuant to Rule 506 as mandated by Section 926 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
While the notice provides no further indication of the nature of the rulemakings, the reference to Rule 156 is intriguing. Rule 156 makes it unlawful to use misleading sales literature for securities issued by investment companies. Will the SEC propose to subject hedge fund sales literature to this standard and impose a filing requirement? The Investment Company Institute has argued for imposing additional restrictions on hedge funds' sales literature.
The open meeting notice is available at
For a FundLaw post by my colleague Jessica Burt on the August 2012 rule proposal, see
John M. Baker
Stradley Ronon Stevens & Young, LLP http://www.stradley.com
1250 Connecticut Avenue, NW, Suite 500
Washington, DC 20036
FundLaw Listowner http://groups.yahoo.com/group/FundLaw/