TheCorporateCounsel.net

Yesterday, the SEC voted – 4-1 (Commissioner Aguilar dissented) – to propose a rule to eliminate the general solicitation and general advertising ban for offerings conducted under Reg D’s Rule 506 and Rule 144A. This rulemaking was required by Section 201(a) of the JOBS Act, which did not provide much flexibility for the agency. There is a short 30-day comment period. Here’s the press release – and here’s the proposing release (we’re posting memos in our “Regulation D” Practice Area).

As expected, the proposed rule doesn’t mandate a specific verification method (nor list a series of acceptable ones) – companies would have the flexibility to determine what are reasonable steps based on the facts and circumstances (egs. nature of the purchaser, type of information known about the purchaser, and type of the offering). Meredith Cross noted that the SEC would form a multi-divisional task force to gauge what steps companies are taking to verify accredited investor status.

During the open Commission meeting, some Commissioners noted they wished this proposal had come out sooner and in the form of an interim final rule (Paredes and Gallager). Essentially, a vote “against” the process leading to the proposal. The need for speed for these Commissioners astonishes me given the importance of what we are talking about. During her remarks, Chair Schapiro noted that just over $1 trillion was raised in exempt offerings during 2011, comparable to the amount raised in registered offerings during the same period. I don’t think 30 days worth of commenting will kill the capital markets. After all, the mission of the SEC is about investor protection. At least, the last time I looked…

Tune in on Wednesday, September 5th for the webcast – “JOBS Act Update: Where Are We Now” – that will cover this proposal, as well as analyze evolving market practices and all the latest from the SEC on the JOBS Act. The program features Corp Fin Deputy Director Lona Nallengara, Wilson Sonsini’s Steve Bochner, Latham & Watkin’s Joel Trotter, Davis Polk’s Michael Kaplan and Dave Lynn of Morrison & Foerster and TheCorporateCounsel.net.

SEC Posts Draft Taxonomy for Form SD

Yesterday, the RiskFin Staff posted draft Form SD taxonomy related to disclosure of payments by resource extraction companies. Comments are due by Halloween – and can be provided via this input form by including “Draft Form SD Taxonomy” in the “General subject matter” section.

California Rules Facebook’s Instagram Acquisition is “Fair”

Keith Bishop gives us the news that the result of California Department of Corporations ‘s fairness hearing yesterday regarding Facebook’s purchase of Instagram was favorable for the social media giant.

– Broc Romanek