Securities and Exchange Commission (SEC) suggested Registered Supply Reform last May. Comments are being received regarding the deadline for the rule change today.
The aim is to make it easier for public firms, especially smaller companies, to raise money through registered offerings.
An important aspect of the proposal is the elimination of government review for these proposals.
As the comment deadline approaches, a group of House Republicans sent a letter We support the rule change. Supported by Congressman TRoy DowningThe letter stated:
“This proposal would eliminate duplicative government registration and qualification requirements for these offerings. Reform would strengthen U.S. public markets, eliminate unnecessary costs and delays, expand investor access, and strengthen the SEC’s preeminent role in regulating national securities offerings while preserving the government’s authority to combat fraud.”
Representatives explained that investor protections will remain and that states still have the authority to investigate allegations of fraud.
Critics of the proposal include: North American Securities Administrators AssociationThe group represents state securities regulators and other former investor protection advocates who think small investors should be relieved of their own decisions.
One of the prominent voices ICAN, Investors’ Choice Lawyer Networkstrongly supported the proposed change As “thoughtful, pro-investor reform.”
“It opens the public markets to smaller, earlier-stage companies that today’s size-based rules quietly exclude; it gives ordinary people a chance to invest in those companies instead of watching the opportunity disappear in private deals; and it helps create true, liquid markets in small-cap stocks. It does all of this while maintaining the disclosure obligations, audited financial statements, and anti-fraud protections that investors rely on.”
ICAN aims to help small investors access the opportunities they believe they should be free to decide where to invest their money.
