On July 10, 2013, the United States Securities and Exchange Commission ("SEC") adopted final regulations to implement a much anticipated provision of the 2012 JOBS Act. The JOBS Act, passed in April 2012, directed the SEC to allow general solicitation and general advertising in certain unregistered securities offerings. Allowing general solicitation and general advertising in certain unregistered securities offerings will have a profound impact on the ways entrepreneurs raise capital in the United States and will provide access to investors which were previously unavailable to these entrepreneurs.
The longstanding prohibition against general solicitation and general advertising in unregistered securities offerings has created difficulties in modern times when so much communication takes place through the internet and social media outlets. Congress determined that the competing interests of investor protection versus increasing entrepreneurs’ access to capital through modern forms of communication could be appropriately balanced by the SEC.
These new regulations become effective in approximately 60 days. If you are planning to raise capital in the near future, a BrownWinick attorney would be happy to discuss the impact that these new regulations will have on your offering.
