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Securities and Exchange Commission OKs Changes to Ease Small-Business Capital Raising
December 11, 2007 - 11:39 a.m.
WASHINGTON (AP) - The Securities and Exchange Commission voted unanimously Tuesday to approve changes to make it faster and simpler for small companies to raise capital through public offerings.
SEC Chairman Christopher Cox said the changes "will make it much easier for smaller companies to access the public markets" by permitting many public companies with shares listed on a national exchange to raise capital more readily.
Under the new approach, smaller companies may seek to raise capital through public offerings using abbreviated paperwork that previously was available only to firms with public float in excess of $75 million.
The SEC voted to permit smaller firms to do the same, allowing them to offer securities quickly, provided their shares are listed on a national exchange, their financial reports are up to date, and they do not seek to raise more than one-third of their public float per year.
The SEC had first proposed a 20-percent annual limitation but increased that in response to public comments suggesting that was too low. SEC Commissioner Paul Atkins said an increase in the 33 percent ceiling might be warranted in the future.
SEC Commissioner Kathleen Casey said about 1,400 smaller companies will be eligible to tap capital markets under the new SEC rules.
Separately, the SEC agreed to cut back on paperwork it receives by mandating a switch to Internet-based reports on unregistered private securities offerings. The change will eliminate about 28,000 paper filings per year, mostly by small private companies required to provide information about unregistered offerings using the SEC's Form D.
Electronic filings will be phased in over a six-month period, starting in Sept. 2008. Once in place, companies will file reports using the SEC's online Edgar system, eliminating the need for firms to file the form on paper, along with five copies, the SEC said.
The federal agency also plans to make the online information available to investors and to state regulators that require such reports, providing "one-stop" filing for Form D reports.
In addition to switching to an online format, the SEC will modify the information that private companies must provide on the form, including dropping a requirement to identify anyone owing 10 percent or more of the company.
December 11, 2007 - 11:39 a.m.
WASHINGTON (AP) - The Securities and Exchange Commission voted unanimously Tuesday to approve changes to make it faster and simpler for small companies to raise capital through public offerings.
SEC Chairman Christopher Cox said the changes "will make it much easier for smaller companies to access the public markets" by permitting many public companies with shares listed on a national exchange to raise capital more readily.
Under the new approach, smaller companies may seek to raise capital through public offerings using abbreviated paperwork that previously was available only to firms with public float in excess of $75 million.
The SEC voted to permit smaller firms to do the same, allowing them to offer securities quickly, provided their shares are listed on a national exchange, their financial reports are up to date, and they do not seek to raise more than one-third of their public float per year.
The SEC had first proposed a 20-percent annual limitation but increased that in response to public comments suggesting that was too low. SEC Commissioner Paul Atkins said an increase in the 33 percent ceiling might be warranted in the future.
SEC Commissioner Kathleen Casey said about 1,400 smaller companies will be eligible to tap capital markets under the new SEC rules.
Separately, the SEC agreed to cut back on paperwork it receives by mandating a switch to Internet-based reports on unregistered private securities offerings. The change will eliminate about 28,000 paper filings per year, mostly by small private companies required to provide information about unregistered offerings using the SEC's Form D.
Electronic filings will be phased in over a six-month period, starting in Sept. 2008. Once in place, companies will file reports using the SEC's online Edgar system, eliminating the need for firms to file the form on paper, along with five copies, the SEC said.
The federal agency also plans to make the online information available to investors and to state regulators that require such reports, providing "one-stop" filing for Form D reports.
In addition to switching to an online format, the SEC will modify the information that private companies must provide on the form, including dropping a requirement to identify anyone owing 10 percent or more of the company.
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