22 Nov SEC Small Business Conference Highlights

I spent yesterday in Washington attending the SEC’s annual symposium on small business capital formation. Congress mandated about 25 years ago that the SEC hold this conference annually. There are panels in the AM and breakout groups in the afternoon that develop recommendations for the SEC staff and commissioners to consider.

The hot topic of the day: the Jumpstart Our Business Startups (JOBS) Act and its many implications in crowdfunding, eliminating the ban on general solicitation in private offerings and the like. It was also not lost on the participants that a number of bills are starting to work their way through Congress that may ultimately coalesce into a JOBS Act 2.0.  A few highlights from the day:

1. Although all 5 SEC commissioners appeared and spoke at last year’s conference, only one appeared and did not speak. SEC Chair Mary Jo White was scheduled to appear to open the event but canceled at the last minute. Not sure what, if anything, any of that means.

2. Over 300 offerings have taken place since September 23 under the new rule allowing a company to use general solicitation in certain private offerings. These offerings have raised over $2.2 billion so far. So lots of folks are using the new rule for sure.

3. The SEC has proposed some rules that would add restrictions on private offerings, especially those involving general solicitation under the new rules. There have already been 450 comments filed, mostly negative, in response to the proposal.

4. When reform to Regulation A, mandated by JOBS, is finalized by the SEC, the states, to the extent they will be reviewing Regulation A public offering documents, are going to appoint one or two lead examiners to represent a large group of states to reduce the state by state review that can be incredibly burdensome.

5. Crowdfunding is coming together as a real alternative with rule proposals passed by the SEC. The JOBS Act limits its use but many are optimistic as to widespread benefit to be seen.

6. Many were pushing to expand “short form” registration to all SEC reporting companies as long as they are current and timely in their filings.

Overall a well organized and substantively meaningful conference. Well done SEC staff, especially Tony Barone who leads the staff’s efforts to put the event together.