Aug 21 The U.S. Securities and Exchange
Commission has delayed for a week its consideration of new rules
to lift the ban on general advertising for private securities
offerings, the regulator said on Tuesday.
The controversial solicitation rules would scale back a
decades-old ban on broad advertising to investors for certain
private offerings. Supporters say the change would spur economic
growth, but critics have said it could lead to fraud.
The SEC was originally scheduled to consider the rules
during a meeting on Wednesday. Commissioners instead will take
up the rules during an Aug. 29 meeting, according to the SEC's
The SEC has already missed a 90-day deadline to implement
the rules as required by the Jumpstart Our Business Startups
Act, or JOBS Act, which was signed into law in April. The law
reduces a variety of securities regulations to help smaller
companies more easily raise capital.
SEC spokesman John Nester declined to comment on the reason
for the delay on the new solicitation rules.
In addition to rolling back the solicitation ban, the JOBS
Act raises the number of shareholders that triggers public
financial reporting requirements and permits a new
capital-raising strategy known as "crowdfunding," which lets
investors take small stakes in private start-ups over the
The law passed Congress with bipartisan support but faced
opposition from some Democrats and advocacy groups who said it
would roll back important investor protections.
SEC Chairman Mary Schapiro and SEC commissioner Luis Aguilar
both have voiced concerns about various provisions.
Many of the provisions took effect automatically, but others
require SEC rulemaking. The agency has struggled to put out
rules called for by the JOBS Act, on top of its already massive
workload from the 2010 Dodd-Frank financial oversight law.
Regulators considered speeding up the process of
implementing the solicitation rules through an interim final
rule that could be adjusted later after considering industry
comments, a source familiar with the agency's thinking has said.
While it is a less common approach, the SEC has implemented
rules this way in the past.
Officials later decided to go through the normal process,
proposing rules for public comment and finalizing them later.
"This transparent process will provide the opportunity for
feedback from companies, investors and market participants who
may be impacted by the final rule," Nester said in a statement
Investor groups and other organizations encouraged the SEC
to take its time with the new rules, but congressional
Republicans have criticized the slow progress.
Representative Patrick McHenry, who leads the House
subcommittee that oversees financial services, said in a letter
to Schapiro last week that the agency was "kicking the can down
the road" and that if the SEC issued proposed rules, regulators
likely would not finalize the rules until next year.
McHenry said regulators had received plenty of time to
solicit public comments before voting on the new rules.