1/3/2012

AGENDA FOR CONFERENCE CALL MEETING

OF

SECURITIES AND EXCHANGE COMMISSION

ADVISORY COMMITTEE ON SMALL AND EMERGING COMPANIES

FRIDAY, JANUARY 6, 2012

BEGINNING AT 1:00 P.M. EST

Agenda

Item Time

1 Call to Order 1:00 p.m.

2 Roll Call 1:00–1:05 p.m.

3 Reports by Co-Chairs

M. Christine Jacobs

Stephen M. Graham

1:05–1:15 p.m.

4 Consideration of Recommendation Relating to 

General Solicitation and Advertising in Exempt 

Offerings of Securities (Copy of Draft 

Recommendation Attached)

1:15–1:50 p.m.

5 Other Business 1:50–2:00 p.m.

6 Adjournment 2:00 p.m.

MEMBERS OF THE PUBLIC MAY ATTEND THE MEETING BY LISTENING TO THE WEBCAST 

ACCESSIBLE ON THE COMMISSION WEBSITE AT WWW.SEC.GOV
Draft: 1/3/2012

SECURITIES AND EXCHANGE COMMISSION

ADVISORY COMMITTEE ON 

SMALL AND EMERGING COMPANIES

Washington, DC 20549-3628

[ ] [ ], 2012

The Honorable Mary L. Schapiro

Chairman

U. S. Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549-1070

Dear Chairman Schapiro:

As you know, the Securities and Exchange Commission organized the Advisory 

Committee on Small and Emerging Companies to provide the Commission with advice 

on the Commission’s rules, regulations, and policies with regard to its mission of 

protecting investors, maintaining fair, orderly, and efficient markets, and facilitating 

capital formation, as they relate to the following: 

(1) capital raising by emerging privately held small businesses and publicly 

traded companies with less than $250 million in public market capitalization;

(2) trading in the securities of such businesses and companies; and 

(3) public reporting and corporate governance requirements to which such 

businesses and companies are subject.

On behalf of the Advisory Committee, we are pleased to submit the enclosed 

recommendation to the Commission. This recommendation is the first of what will be an 

ongoing series of recommendations to be provided by the Advisory Committee in 

fulfillment of its mandate. 

We and the other members of the Advisory Committee are prepared to provide any 

additional assistance that the Commission or its staff may request.

Respectfully submitted on behalf of the Committee,

Stephen M. Graham M. Christine Jacobs

Committee Co-Chair Committee Co-Chair
1/3/2012

Members of the Committee:

David A. Bochnowski

John J. Borer, III

Dan Chace

Milton Chang

Joseph "Leroy" Dennis

Stephen M. Graham

Shannon L. Greene

M. Christine Jacobs

Kara B. Jenny

Steven R. LeBlanc

Richard L. Leza

Paul Maeder Kathleen A. McGowan 

Catherine V. Mott

Karyn Smith 

Dan Squiller

Charlie Sundling

Timothy Walsh

Gregory C. Yadley

Official Observers:

A. Heath Abshure

Sean Greene

Enclosure

cc: Commissioner Elisse Walter

Commissioner Luis Aguilar

Commissioner Troy A. Paredes

Commissioner Daniel M. Gallagher

Meredith B. Cross

Lona Nallengara

Elizabeth Murphy

Gerald J. Laporte

Jennifer Zepralka
Draft: 1/3/2012

U.S. Securities and Exchange Commission

Advisory Committee on Small and Emerging Companies

Recommendation Regarding Relaxing or Modifying

Restrictions on General Solicitation in Certain Private Offerings of Securities

[ ] [ ], 2012

AFTER CONSIDERING THAT:

1. The Advisory Committee is of the view that private offerings of securities pursuant to Section 

4(2) under the Securities Act of 1933 (the “Securities Act”) are a successful instrument for 

facilitating capital formation by emerging privately held small businesses and smaller public 

companies;

2. In offerings of securities conducted pursuant to Rule 506 of Regulation D (“Rule 506”), which 

is a safe harbor for private offerings of securities under Section 4(2) of the Securities Act and 

the most widely used Regulation D exemption, neither the issuer nor any person acting on the 

issuer’s behalf may offer or sell securities by any form of general solicitation or general 

advertising and securities sold pursuant to Rule 506 must be sold to “accredited investors” or 

persons who, either alone or with a representative, have sufficient knowledge and experience in 

financial and business matters to make them capable of evaluating the merits and risks of a 

prospective investment;

3. The Advisory Committee is of the view that the restrictions on general solicitation and general 

advertising prevent many privately held small businesses and smaller public companies from 

gaining sufficient access to sources of capital and thereby materially limit their ability to raise 

capital through private offerings of securities; and

4. The Advisory Committee is of the view that the investor protections afforded by the existing 

restrictions on general solicitation and general advertising are not necessary in private offerings 

of securities whereby the securities are sold solely to accredited investors.

THEREFORE, the Advisory Committee recommends that the Commission take immediate action to 

relax or modify the restrictions on general solicitation and general advertising to permit general 

solicitation and general advertising in private offerings of securities under Rule 506 where securities 

are sold only to accredited investors.