In its never ending quest to find suitable ways to address capital formation issues in the United States, the SEC’s Division of Corporation Finance is looking to see if foreign jurisdictions handle some of these issues better and if it could be applied in the United States.
For example, the SEC is looking to see if other jurisdictions handle solicitations and advertising of private offerings differently. Coupled with this item, Corporation Finance is also reviewing the regulation of private issuers as well. In particular, Corporation Finance is looking at private placements and general solicitation bans in light of the new age of social media, and 24 hour news coverage. One consideration is if the current regulatory scheme of a registered offering regime is relevant when one considers the way information is received in this type of market and the attempts to encourage investors through these communications.
The SEC is intrigued at the way foreign private issuers handle these matters overseas and if its current system should remain in place. Historically, foreign private issuers in the United States ahd been the traditional large cap companies. However, this model is changing, and it is unclear if the SEC’s current regulatory framework has adapted.
Finally, the SEC should be applauded for its efforts in realizing not all regulation needs to be addressed from an American standpoint, but that certain goals could be achieved by following an overseas model.