Earlier today the Securities and Exchange Commission released its Final Report from the 29th Annual Forum on Small Business Capital Formation held in November 2010.
This year’s forum yielded 36 recommendations from three working groups and a number of written recommendations submitted by organizations concerned with small business capital formation.
Participation was down slightly, with a total of 60 participants in the three working groups, as compared to 72 last year, and with 37% voting to rank each of the final recommendations, as compared to 44% last year.
There are a few proposals that show up each year, but many of this year’s recommendations focus on Regulation A, the requirements of Exchange Act Section 12(g) and scaled reporting/eligibility requirements for smaller issuers. The top 5 recommendations include proposals that the Commission:
- specifically consider the impact of Dodd-Frank Act rulemaking on small business investing;
- adopt a private offering exemption that does not prohibit the general solicitation of, or advertising to, purchasers that do not need the protections afforded by Securities Act registration;
- provide better scaling of reporting requirements for smaller companies;
- exempt companies with a market capitalizations of less $250 million from Section 404(b) of the Sarbanes-Oxley Act (we already know that this one was rejected in April); and
- increase the permissible offering amount under Regulation A and the number of shareholders that trigger registration under Section 12(g) of the Exchange Act (As an aside: both Fortune and PeHUB are reporting today that there’s a bill in the works that may actually take care of the latter portion of this proposal, by increasing Section 12(g)’s shareholder trigger requirement from its current level of 500 holders of record to 1,000 holders of record exclusive of accredited investors and employees holding stock options.).