(In 8th paragraph corrects quote to say "aggressive" instead of
WASHINGTON, April 26 U.S. Securities and
Exchange Commission Chair Mary Jo White is pushing to adopt a
rule that would ease advertising restrictions for private
placements of securities by firms such as hedge funds, Bloomberg
reported on Friday.
Such a move would likely incense investor advocacy groups,
who have called for the proposal to be scrapped and rewritten,
because it lacks important investor protections.
But it would appease U.S. House Republicans, who have been
critical of the agency for dragging its feet on the rule, and
missing a key July 2012 deadline for its implementation.
The lifting of the ban on "general solicitation" is required
by the 2012 Jumpstart Our Business Startups, or JOBS Act, which
relaxes a variety of securities regulations in an effort to help
small businesses raise capital and go public.
By easing advertising rules for hedge funds and other firms,
the law aims to make it easier for small businesses to reach new
The SEC last August had contemplated lifting the ban right
away through an "interim final" rule and making tweaks later,
but then-Chairman Mary Schapiro shied away from the idea after
investor advocates complained.
SEC Commissioner Luis Aguilar, a Democrat, voted against the
proposal at the time and has since become even more vocal about
In a speech last week he said it was "fatally flawed" and
represented the most "aggressive effort to exclude pro-investor
initiatives" that he's ever seen in his SEC career.
Quoting two people familiar with the matter, Bloomberg said
on Friday that White is considering adopting the proposed rule
as drafted, a move that would easily win support from the SEC's
two Republican commissioners, Dan Gallagher and Troy Paredes.
To address investor advocates' concerns, White has been
considering asking for a "concept release" to be issued to seek
views on how to bolster investor protection, Bloomberg reported.
A concept release is a very early-stage form of rulemaking
that asks the public to weigh in on a series of issues.
When reached by phone late Friday afternoon, Aguilar said he
was unaware of what White's sentiments were on the issue.
"I am not aware of any decision made by Chair White to go
forward with the general solicitation proposal," he said. "It
would be surprising to me, and of course I would be very
(Reporting by Sarah N. Lynch; Editing by Bernard Orr)