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SEC Chair Pushing to Adopt Proposed Rule to Lift Ban on General Solicitation

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Bloomberg is reporting that SEC Commission Chair Mary Jo White is pushing to have the SEC's proposed rule, lifting the ban on general solicitation in Regulation D offerings, adopted in its present state.

The ban on general solicitation is the rule, dating from the Securities Act of 1933, that prevents public advertising relating to most private securities offerings. Lifting the ban was an important element of the JOBS Act and the JOBS Act required the SEC to implement regulations lifting the ban. The SEC's staff drafted a proposed rule in late 2012 but some Democratic members of the Commission (such as Luis Aguilar) opposed its adoption, claiming that it did not do enough to protect investors.

While lifting the ban would not immediately allow interstate crowdfunded offerings to commence, lifting the ban is a prerequisite. This is so because most crowdfunding portals would rely on their general availability to the public to draw sufficient traffic to make their crowdfunded offerings possible. (See prior post on crowdfunding).

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.