Business
Aug 21 (Reuters) - The U.S. Securities and Exchange Commission has delayed for a week its consideration of new rules to lift the ban on general advertising for private securities offerings, the regulator said on Tuesday.
The controversial solicitation rules would scale back adecades-old ban on broad advertising to investors for certainprivate offerings. Supporters say the change would spur economicgrowth, but critics have said it could lead to fraud.
The SEC was originally scheduled to consider the rulesduring a meeting on Wednesday. Commissioners instead will takeup the rules during an Aug. 29 meeting, according to the SEC'swebsite.
The SEC has already missed a 90-day deadline to implementthe rules as required by the Jumpstart Our Business StartupsAct, or JOBS Act, which was signed into law in April. The lawreduces a variety of securities regulations to help smallercompanies more easily raise capital.
SEC spokesman John Nester declined to comment on the reasonfor the delay on the new solicitation rules.
In addition to rolling back the solicitation ban, the JOBSAct raises the number of shareholders that triggers publicfinancial reporting requirements and permits a newcapital-raising strategy known as "crowdfunding," which letsinvestors take small stakes in private start-ups over theInternet.
The law passed Congress with bipartisan support but facedopposition from some Democrats and advocacy groups who said itwould roll back important investor protections.
SEC Chairman Mary Schapiro and SEC commissioner Luis Aguilarboth have voiced concerns about various provisions.
Many of the provisions took effect automatically, but othersrequire SEC rulemaking. The agency has struggled to put outrules called for by the JOBS Act, on top of its already massiveworkload from the 2010 Dodd-Frank financial oversight law.
Regulators considered speeding up the process ofimplementing the solicitation rules through an interim finalrule that could be adjusted later after considering industrycomments, a source familiar with the agency's thinking has said.While it is a less common approach, the SEC has implementedrules this way in the past.
Officials later decided to go through the normal process,proposing rules for public comment and finalizing them later.
"This transparent process will provide the opportunity forfeedback from companies, investors and market participants whomay be impacted by the final rule," Nester said in a statementlast week.
Investor groups and other organizations encouraged the SECto take its time with the new rules, but congressionalRepublicans have criticized the slow progress.
Representative Patrick McHenry, who leads the Housesubcommittee that oversees financial services, said in a letterto Schapiro last week that the agency was "kicking the can downthe road" and that if the SEC issued proposed rules, regulatorslikely would not finalize the rules until next year.
McHenry said regulators had received plenty of time tosolicit public comments before voting on the new rules.
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