In a letter to SEC Chair Mary Schapiro, Rep. Patrick
McHenry (R-NC), Chair of the TARP and Financial Services Subcommittee, said
that the SEC’s decision to propose a rule eliminating the Regulation D ban on general
solicitation as directed by Section 201 of the JOBS Act, rather than adopt an
interim final rule, means that the Commission is unlikely to finalize the rule
until next year. By ``kicking the can down the road,’’ noted Chairman McHenry, the
SEC is abdicating its responsibility under the law and ignoring the will of
Congress and the President. Chairman McHenry has set a hearing for September 13
to examine the SEC’s implementation of the JOBS Act, including the failure to implement
Section 201 by the Act’s statutory deadline and by the deadline committed to in
earlier congressional testimony.
The House Chair noted that it is over one
month past the statutory deadline to implement Section 201’s direction to end
the ban on general solicitation. The SEC had ample time to solicit additional
public comment, said Chairman McHenry, adding that issuing an interim final
rule would neither preclude additional public comment nor preclude revising the
rule at a later date as appropriate. Thus, Chairman McHenry said that the fact
that the SEC will now be proposing a rule after the Commission has had 130 days
to seek additional comment ``can be viewed as nothing other than a delaying
tactic.’’ The House Chair concluded that the Commission’s decision to propose a
rule and delay implementation of this important part of the JOBS Act is a
reflection of ideological opposition to a bi-partisan effort by Congress and
the President to improve the conditions for capital formation.
The JOBS Act was passed by overwhelming
majorities in the House and Senate and signed by the President on April 5,
2012. Chairman McHenry said that the JOBS Act reflects a bi-partisan
Congressional consensus that the SEC needed to do much more to enable startup
companies and other small businesses raise capital in the United States .
Chairman McHenry requested the following information
from the SEC by August 30: all documents and communications between or among SEC
Commissioners and staff referring or relating to potential SEC action to
implement Section 201 of the JOBS Act; all communications between SEC
Commissioners or staff and any outside party referring or relating to potential
SEC action to implement Section 201; all documents, including legal memorandum,
prepared by the SEC’s Office of the General Counsel, referring or relating to
potential SEC action to implement Section 201.