The overall purpose of the JOBS Act was to facilitate capital formation to help small businesses and entrepreneurs invest, expand and create jobs. As proponents of the JOBS Act, the Senators and Chairman McHenry believe that the regulation proposed by the Commission last August accomplishes this goal. The proposal properly implements Congress’ intent to remove the general solicitation ban in a consistent manner for all types of issuers conducting private offerings under Rule 506.
Paragraph (b) of Section 201 clearly effectuates this by providing that all issuers subject to other federal securities laws will be able to conduct private offerings pursuant to amended Rule 506. The proposed rule ensures that all purchasers of securities under Rule 506 are accredited investors, they noted, and follows Congress’ policy objectives to require that issuers take reasonable steps to verify that the purchasers are accredited investors. The Senators and Chairman McHenry emphasized that additional or more prescriptive requirements would overturn Congress’ intent and they strongly urged the Commission not to do so.