WASHINGTON - U.S. rules on trade in securities private will be a hearing Tuesday by lawmakers concerned that the regulations can be stifling the capital formation.
Goldman Sachs, in a matter of prestige, was frightened by limiting the offering of the shares of Facebook in January for foreign investors fear that a sale of the shares to us customers would go against the rules.
Securities and Exchange Chairman Mary Schapiro and SEC financial director Meredith Cross corporation will appear together in the oversight of the House Committee after its Chairman, Darrell Issa, questioned whether the American rules governing trade private actions are obsolete and hamper the creation of capital.
The SEC is analyze whether its rules for the grants on the part of the private sector are still relevant in an era of sounded complex investor pools on the offers, and online trading platforms that allow investors to quickly swap the shares of the company hot tech.
Schapiro has not say when or how the SEC can modernize these rules, which prompted as Google cash-hungry companies to speak to the public and have dictated how investors can get a piece at the start of the action.
The SEC is also followed little regulated private company world trade on SecondMarket and SharesPost online platforms. SecondMarket confirmed in January, he had received a request for the SEC for information and its Executive Director, Barry Silbert, be also will be on hand to testify Tuesday.
Trade in private actions has appeared prominently in the media lately that the Wall Street banks and markets electronic seek to offer investors a chance to warm trade actively in investments in technology companies like FacebookZynga and Twitter before going public.
Goldman had planned to offer American investors a chance to buy shares of Facebook, but finally opted only to sell the shares to foreign investors because of the intense media coverage of the agreement.
Although the SEC asked Goldman to limit its offer, Goldman was concerned that media coverage could have violated a general prohibition of solicitation for private offers that aims to protect investors.
The Goldman-Facebook deal also drew attention to another ancient rule on the books that determines when a company must send to the public.
Under the current regulations, companies must begin filing regular disclosures financial if they exceed 500 registered shareholders. But Goldman Sachs had found a legal way to circumvent this rule by a special purpose vehicle associate investors into one.
Schapiro said that the SEC focuses on these rules to see if they need to be modernized, and that the SEC also examines if regulatory relief should be available for a new strategy capital called "crowdfunding", in which a group of people pooled their money to invest in an opportunity business.
In addition, she added that the SEC is to consider e-commerce of private actions, noting in a letter to Issa that these platforms raise concerns that the "price of securities may be influenced by the actors of the market in conflict which can be purchase and sale for their own account and facilitate transactions." for others.
On Tuesday, Issa should raise concerns about the outdated rules and if they are hampering capital formation.
In a letter to the SEC late last month, he asked the Agency to conduct an analysis of profitability of the general prohibition of canvassing and how it affects issuers with no plan to speak to the public.
He also asked the SEC to relax his rule of 500-shareholder, saying it is creating "unintended consequences that constrain liquidity."
In testimony of loan, CEO of SecondMarket Silbert will make similar land, saying that the relaxation of the rules "will facilitate the pressure on growth stage companies."
It calls for an increase in or elimination of the rule 500-shareholder and said that the prohibition of General tender "unnecessarily limit the pool of potential investors."
No comments:
Post a Comment