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SEC Response to Letter from JOBS Act Author

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The SEC finally responded, in a letter, to criticism leveled at the Commission by Representative Patrick McHenry (R-NC), one of the principal drafters of the 2012 JOBS Act. Representative McHenry had previously ripped the SEC's proposed rules regarding private offerings under Regulation D that would (1) require issuers to include mandatory disclaimers in general solicitation materials, (2) require issuers to file general solicitation materials with the SEC at least fifteen days before providing those materials to potential investors, and (3) generally increase the cost of compliance for issuers using general solicitations.

In its response the SEC promised to give "very careful consideration" to Representative McHenry's views, noting that its proposed rules were open for comment and that it would be premature to discuss what alternatives the SEC might purpose. In large measure, however, SEC Chair Mary Jo White largely dodged the criticism leveled by Representative McHenry and avoided any discussion of the specific points raised in his letter.

The SEC's proposed Regulation D rules are still pending public comment until September 23, 2013.

Perhaps one of the more interesting points out of the letter is the SEC's estimate of how many staff hours were devoted to the preparation of the proposed rule: 3,538 hours. That is roughly equivalent to the billable time that two associates in a large law firm would generate in an entire year.

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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.