SEC lifts ban on general solicitation, advertising for private issues

Commission plans rule requiring more information on offerings

By Devika Patel

Knoxville, Tenn., July 10 - The Securities and Exchange Commission announced that it has adopted a new rule to lift the ban on general solicitation or general advertising for certain private securities offerings.

In connection with the new rule, the SEC will issue a rule proposal requiring issuers to provide additional information about these securities offerings to better enable the SEC to monitor the market with the ban now lifted. The proposal also provides for additional safeguards as this market changes and new practices develop.

The SEC also plans rules to disqualify felons and other bad actors from participating in certain securities offerings.

"As we fulfill our mission to facilitate capital formation and maintain fair and efficient markets, the commission must always focus on strong investor protections," SEC chair Mary Jo White said in a press release. "We want this new market and the private markets in general to thrive in a safe and efficient manner, and these rules we adopt and propose are designed to facilitate that objective."

The rule amendments become effective 60 days after publication in the Federal Register. The rule proposal will undergo a 60-day public comment period following publication.

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