June 3, 2015
Good morning. Thank you all for being here. Steve, Chris, and all committee members, I appreciate the full agenda you have today, and I will be brief in my update and comments so that you can get to the business at hand.
I am pleased to note that since your last meeting, the Commission in March adopted Regulation A+. I know this Committee was eager for that rule to be finalized, as were we. I believe the rule we adopted will provide an additional and effective path to raising capital that also provides strong investor protections. I look forward to seeing companies put the rules to good use to raise capital.
On other fronts, we continue to advance the completion of our other rulemaking mandates under the JOBS Act and the Dodd-Frank Act, and as we have discussed before, it is one of my priorities to complete the crowdfunding rulemaking this year, which is our last significant JOBS Act rulemaking. Crowdfunding in its various forms obviously remains a focus of many others, including this Committee, the states and in various countries around the world.
Indeed, more than 20 states have enacted some form of intrastate crowdfunding legislation or rules, and a number of others are considering similar initiatives. As states are seeking to expand the avenues in which issuers may conduct intrastate offerings, we have focused on the fact that some of our laws and rules were put into place years ago prior to widespread use of the internet and may present challenges to the states’ efforts.
For example, Securities Act Rule 147, which you will be discussing today, created a safe harbor that issuers often rely on for intrastate offerings. Rule 147 was adopted in 1974, and how an issuer might conduct an intrastate offering using the internet was not contemplated at that time. The staff in the Division of Corporation Finance is currently considering ways to improve the rule, by looking at, among other things, the conditions included in the rule for an offering to be considered intrastate. Securities Act Rule 504, an exemption that could be used to facilitate regional crowdfunding offerings for up to $1 million that are registered in one or more states, is another rule that may benefit from modernization and the staff is considering ways to do that. We look forward to having your input on these topics and to hearing your thoughts on whether there are aspects of these or other rules that could be usefully updated or changed.
It is also quite timely for this Committee to be taking up public company disclosure effectiveness. As you know, the staff in the Division of Corporation Finance is hard at work on our initiative to improve the effectiveness of the public company disclosure regime for investors and companies. The staff has sought input from a broad range of market participants and is in the process of developing recommendations for the Commission’s consideration. We welcome your thoughts in this area that I know is of particular interest to many of you.
I look forward to your input on the other topics on your agenda, including the Section 4(a)(1½) exemption, and the issues surrounding broker-dealer registration for those who identify or otherwise “find” potential investors in private placements. I am also glad to see a continuation of your consideration of venture exchanges as an avenue for secondary market liquidity.
I will stop here. As always, we very much appreciate the time and expertise you devote to this Committee. I wish you a very productive meeting.
Thank you.