SEC Adopts Repeal of Ban on General Solicitation; Proposes New Reg D Requirements
On July 10, 2013, the SEC adopted new rules under Section 201(a) of the JOBS Act, repealing the ban on general solicitation in all Rule 144A offerings and certain Rule 506 transactions. The SEC action:
- Adopted final rules to repeal the ban on general solicitation in all Rule 144A offerings and certain Regulation D transactions, as required by Title II of the JOBS Act;
- Adopted final rules to disqualify “bad actors” from participating in Regulation D Rule 506 offerings, as required by Section 926 of Dodd-Frank; and
- Proposed new Regulation D requirements. If adopted, the proposed rules would:
- impose filing requirements that could have a chilling effect on some market participants’ willingness to use general solicitation under new Rule 506(c); and
- effectively penalize an issuer for not filing a Form D in a Rule 506 offering.