SEC Proposes Rules to Implement JOBS Act Provision About General Solicitation and Advertising in Securities Offerings
Eliminating the Prohibition on General Solicitation and General Advertising in Certain Offerings
The Securities and Exchange Commission today proposed rules to eliminate the prohibition against general solicitation and general advertising in certain securities offerings.
Under the proposed rules, which are mandated by the Jumpstart Our Business Startups Act, companies would be permitted to use general solicitation and general advertising to offer securities under Rule 506 of Regulation D of the Securities Act and Rule 144A of the Securities Act.
“I believe that the proposed rules fulfill Congress’s clear directive that issuers be given the ability to communicate freely to attract capital, while obligating them to take steps to ensure that this ability is not used to sell securities to those who are not qualified to participate in such offerings,” said SEC Chairman Mary Schapiro.
The Commission will seek public comment on the proposed rules for 30 days. Shortly thereafter, the Commission will review the comments and determine whether to adopt the proposed rules.