On July 12, the SEC voted 4-1 to lift the ban on general solicitation for securities offerings. The rules have been published today (July 24) in the Federal Register meaning that general solicitation will be legal on September 23.
Interestingly, the new proposed Advance Form D rules and general solicitation filing rules will not be in effect when general solicitation goes live.
The proposed D rules are in a 60 day comment period and would take at least 30 days after completion of the comment period in order to become effective. More likely, the SEC will take some time to review the comments before issuing a final rule.
The result is that there will be some time period, probably between 30 and 90 days, where companies will be able to use general solicitation with no new Advance Form D filing or any requirement to file general solicitation materials.
Companies will be able to advertise at will, subject to taking reasonable steps to verify accredited investor status of their purchasers.
Companies may decide to take advantage of this window to get their message out while not being subject to the new requirements.
What do you think? How do you think companies can take advantage of this interim period?
This post was written by James Han on July 24, 2013
General Solicitation Rules Published