13 Oct SEC Small Business Forum Wish List

We’ll be back at the SEC again in a few weeks for their annual Government-Business Forum on Small Business Capital Formation (ye olde GBFSBCF). There we listen to panels in the morning, and have breakout sessions in the afternoon where recommendations are developed and presented. The recommendations are later ranked by the participants and published by the SEC. Sometimes Congress picks up the list, as they did in creating the JOBS Act. And sometimes the SEC even does so without Congressional prodding, though sadly the last time that happened was around 2007. Looking at last year’s list and my current mood, here are the five things I hope we can focus on and recommend to my friends in Washington:

1. Making short Form S-3 registration available to all reporting companies with reasonable “baby shelf” restrictions for OTC companies with market caps below $75 million to ease capital formation.
2. Expanding Regulation A availability to SEC reporting companies.
3. Enhancing Regulation A by preempting state blue sky laws for resales of securities.
4. Finally allowing “private placement brokers” who are basically finders to either avoid broker-dealer registration or have a “light” registration similar to investment advisers.
5. Allowing smaller reporting companies to adopt a principles-based disclosure approach, with the option to exclude otherwise required disclosure if not material to the company or its investors.

By the time we meet on November 17 we will (hopefully) know the results of the US Presidential and Congressional elections. Of course much about how these issues are addressed will be impacted by the political environment. That said, we’ve often seen good bi-partisan work on many of these issues, such as the passage of the JOBS Act in 2012 with wide support from both sides of the aisle. Staying optimistic as always!

UPDATE November 1, 2016 – Your humble blogger has just been asked to speak on a panel at the Conference to talk about Regulation A+ and to co-moderate a breakout session as well. Cool stuff!