August 31, 2007
I strongly support the Securities Exchange Commission's proposed revisions to Rule 144 and 145 contained in S7-11-07 without any modifications. The proposed revisions as written strikes an appropriate balance between public protection, public information, capital formation, burdens and expense imposed upon issuers and brokerage firms.
There is a very strong distiction between securities registered under the Exchange Act and non reporting issuers. Sarbanes Oxley has caused a tremendous increase in the cost of registration. Many small businesses are non reporting as they cannot afford the cost and maintenance of registration.
At present, non reporting issuers under Rule 144(c)(2) are required to make publicly available information contained in Exchange Act Rule 15c2-11. THIS RULE SHOULD BE MAINTAINED AS PRESENTLY WRITTEN. The rule provides basic information about the nonreporting issuer and advises the investor of whom to contact for more information. The information required is inexpensive and causes very little expense for the issuer. In contrast, the expanded information required by Regulation SB, SK is cost prohibitive for small issuers. This is well understood given our experience with Sarbanes Oxley. We should not make any changes in 15c2-11 regarding non reporting issuers as the burdens imposed would drive many issuers out of business. (Consider the high cost of Attorneys, Accountants, Investor Relations that would have to get involved in the process of imposing more burdens) Many non reporting issuers are not profitable and struggle to stay in business with limited personnel. They play a vital role in capital formation which should not be altered.
I strongly support longer holding periods for affiliates and non affiliates of non reporting issuers. In addition, I also support efforts on the SEC websight to advise the public that non reporting issuers have less information available than reporting issues and can be very risky investments. We need to maintain the existing balance between reporting and non reproting issuers so as not to drive nonreporting issuers out of business by imposing additional burdens and expense.
In conclusion, the SEC has stuck an appropriate balance in its proposed revision of Rule 144 and 145 and I would adopt the proposals as written.