SEC
Proposes Rules to Eliminate Prohibitions on General
Solicitation and Advertising in Response to JOBS Act
Mandate
As part of the Jumpstart Our
Business Startups Act (JOBS Act), Congress directed the
Securities and Exchange Commission (SEC) to adopt rules
to permit general solicitation or general advertising in
offerings made under Rule 506 of Regulation D so long as
all purchasers are “accredited investors.” The
elimination of this prohibition is a radical departure
from current rules governing private placements and is
aimed at providing issuers with greater access to the
capital markets.