June 28, 2012
The SEC was required to draft rules by July 4 for “general solicitation,” which allows entrepreneurs to advertise the fact that they are raising capital (which was previously prohibited).
“The 90 day deadline does not provide a realistic timeframe for the drafting of the new rule, the preparation of an accompanying economic analysis, the proper review by the Commission, and an opportunity for public input,” said Schapiro.
She added, however, that “significant progress” has been made on recommendations and economic analysis for general solicitation, and the SEC plans to publish guidelines sometime this summer.
As for crowdfunding, the SEC has until December 31 to come up with those rules. In response to a question, Schapiro said, “I don’t foresee not meeting the deadline.”
But according to Brian Lane, partner at Gibson Dunn & Crutcher, the adoption of the crowdfunding provision could be delayed until late 2013. The SEC is simultaneously working on over 70 rulemakings for the Dodd-Frank Act, he noted, and deadlines like this are typically missed.
“All these dates should just be thrown in the wastebasket. They have no semblance to reality,” he said.
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