07 Jul SEC Issues 2013 Small Business Forum Recommendations

My regular blogees know that each year, as mandated by Congress, the SEC holds a Government-Business Forum on Small Business Capital Formation. The result of each forum is a list of recommendations developed by the participants who range from business folks, professionals, academics and government types. Then the recommendations are ranked by the participants and the list is released. They just got the list out from the November 2013 forum. A large number of recommendations relate to the world of what I call “statutory” crowdfunding, which is not my beat here. The other key recommendations made:

1. Eliminate the SEC’s proposed additional restrictions on the use of Regulation D for private offerings when general solicitation and advertising is permitted.

2. Promptly adopt final rules regarding Regulation A+ to allow a simpler public offering preempted from state regulation.

3. As approved by Congressional committees, allow all public reporting companies to register public offerings on short form S-3.

4. Allow smaller reporting companies to avoid submitting financial information in XBRL format as it is expensive, time-consuming and not terribly beneficial.

5. As approved by the House of Representatives, widen “tick sizes” to encourage trading in smaller company stocks.

6. Allow market makers of small company stocks to be compensated by issuers for their efforts.

7. As approved by Congressional committees, end the application of Rule 144(i) which restricts trading of former shell companies two years after a reverse merger.

8. Lower to $15 million the current $40 million minimum public offering following a reverse merger required to bypass “seasoning” restrictions delaying uplisting of these companies.

9. Change public company disclosure rules to eliminate the need to disclose information which is not material to an investor.

10. Eliminate SEC Schedule 14f-1 requiring filing and mailing an information statement when public company boards change as it is onerous, often duplicative and inconsequential.

Some of these items are new, and some have been “on the list” for years. We know it is important to keep this list current so that when Congress or the SEC Commissioners believe timing is right to take action for smaller companies, the items of concern to those of us in the hustings are well known. Thanks Tony Barone and my friends at the SEC for their hard work each year on putting together this valuable conference.