SEC Announces Additional Delay on General Solicitation Rule Change

On Friday August 17, 2012 it was reported that, in response to heavy criticism, the SEC would backtrack on its earlier plans to issue an interim rule lifting the ban on general solicitation and advertising of public offerings required by the JOBS Act. Instead, the regulatory agency will follow normal protocol and a proposed rule will be released for public comment.  The rulemaking was expected to be published at the SEC’s open meeting on August 22, 0212. However, the SEC announced that the rule would instead be made public at the following week’s open meeting next Wednesday, August 29th.

In a statement issued by SEC spokesman John Nester, the agency explained that Chairman Mary Schapiro “believes it is important for the general solicitation rule to be proposed for public comment.” Nester went on to state: “This transparent process will provide the opportunity for feedback from companies, investors and market participants who may be impacted by the final rule. While we recognize the importance of the statutory mandate and are committed to acting expeditiously, as Chairman Schapiro previously stated, the 90-day deadline did not provide a realistic time frame for the drafting of a new rule, the preparation of an accompanying economic analysis, the proper review by the Commission, and an opportunity for public input. In addition, failure to provide this opportunity for comment could subject the rule to challenge that could delay the implementation of the statutory mandate.”

For further information about this and questions related to the JOBS Act, please contact Sarah Weber at sarah.weber@corecls.com or (619)278-0020.