SMALL BUSINESS
The SEC in May proposed six measures to modernize and
improve its capital-raising and reporting requirements for smaller
companies. Many of the proposals address key recommendations made by
the SEC’s Advisory Committee on Smaller Public Companies. They
include:
A new system of securities regulation for smaller public
companies that would make scaled regulation available to a much larger
group of smaller public companies.
Modified eligibility requirements so companies with a
public float below $75 million can take advantage of the benefits of
shelf registration.
A new exemption from Securities Act registration
requirements for sales of securities to a newly defined category of
“qualified purchasers” in which limited advertising would be
permitted.
Shortened holding periods under Securities Act Rule 144
for restricted securities to reduce the cost of capital and to
increase access to capital.
New exemptions for compensatory employee stock options so
Exchange Act registration requirements would not be triggered solely
by a company’s compensation decisions.
Electronic filing of the form filed by companies making
private or limited offerings to ease burdens for filers and make the
information filed more readily available.
Comments on the proposals are due within 60 days of their publication in the Federal Register . Additional details about the proposals are available at www.sec.gov/news/press/2007/2007-102.htm.
