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SEC Open Meeting Recap - July 10th, 2013

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SEC Open Meeting Recap - July 10th, 2013

By Startup Valley (392 words)
Posted in Equity Crowdfunding on July 10, 2013

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SEC holds an Open Meeting to discuss and vote on the proposed amendments to Rule 506 including lifting the ban on general solicitation, blocking “bad actors” from participating in private markets, and Regulation D Form D.

Chairman Mary Jo White recommended the amendments to 506 offerings, as the SEC staff spoke one by one to explain each of their respective sections of the proposed adoption.

Commissioners Walter and Aguilar had quite a few comments supporting and opposing the proposed amendments, respectively. They were followed by short and sweet claims of support by Commissioners Paredes and Gallagher. Vote Passes 4-1. This passing will allow, what used to be only private placements, openly advertise deals for startups, VCs, and hedge funds. This rule has been around since The Great Depression, so changes this 80 year old rule did not come easy and required over a year of work from the SEC to get to this point. The general solicitation is still only allowed to accredited investors, while Title III of the JOBS Act will be for all investors. Title III is set to have rules proposed in the near future.

After speaking about lifting the ban on general solicitation, the SEC commissioners and staff spoke about the felon and “bad actor” disqualification amendment to Rule 506. This amendment was widely supported by the Commission, with the only slight disagreement coming from Commissioner Aguilar regarding a snippet of the amendment about the timetable set for “bad actors” in the next 60 days, as will take these amendments to become effective. Vote passes unanimously 5-0

Next on the agenda was the dialogue on Regulation D Form D. This proposal would increase the timeliness of the Form D filings by the Issuer. Form D would have to be filed 15 days before the solicitation began and close or amend the Form D at least 30 days after soliciting ends. Gallagher states his disapproval by saying, “The Reg D offerings markets raised 4 times the amount raised in the IPO markets last year.” He worries these proposed restraints on the private markets will do “more harm than good.” Vote passes 3-2

StartupValley looks forward to all of the hard work of the SEC to come to fruition! Follow us on Facebook to keep up to date with all that is happening in the fast paced world of equity crowdfunding!

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