Republican Sens. John Thune and Pat Toomey today asked SEC Chair Mary Jo White to set aside a proposed rule that would introduce new disclosure requirements for companies that are advertising private securities offerings under the Jumpstart Our Business Startups (“JOBS”) Act. Toomey and Thune said in a letter to White that the proposals would "substantially undermine the intent of Congress" in the JOBS Act, which was written to help private companies raise money from qualified investors.
The JOBS Act, adopted last year, lifted a decades-old ban on advertising unregistered securities offerings. The SEC finalized rules implementing the JOBS Act in July and at the same time proposed disclosure requirements, which it said were designed to allow the SEC to assess the impact of the changes on investor protection and capital formation. In part, the rule proposals were aimed at addressing concerns that the general solicitation allowed by the JOBS act might result in an increase in fraudulent activity.
"As sponsors of this provision," Thune and Toomey said, "we respectfully urge the Commission to note Congressional intent and not adopt the additional proposals in order to ensure the benefits of the JOBS Act are realized for small businesses and investors."
House Republican Reps. Patrick McHenry and Scott Garrett have also said the proposals will be a burden and have asked the SEC to withdraw them. “In light of the public interest in the proposed amendments,” the SEC in September reopened the comment period for an additional 30 days.
SEC Chair Mary Jo White said in a speech Friday that the SEC needs to move "expeditiously" to finalize the proposals and "get it right if we are going to make this new era of transparency and openness workable."