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ADISA Submits Comments to SEC Regarding Proposed Rulemaking in Connection with Revisions to Section 12(g) of the Securities Exchange Act of 1934

Mar 03, 2015

ADISA’s Legislative & Regulatory Drafting Task Force has submitted a letter in response to the U.S. Security and Exchange Commission’s request for comments to the proposed rulemaking in connection with revisions to Section 12(g) of the Securities Exchange Act of 1934. These revisions reflect new, higher thresholds for registration, termination of registration and suspension of reporting that were set forth in the JOBS Act.  The proposed amendments would also revise the definition of “held of record” in Rule 12g5-1. 
 
ADISA’s comments focused on the following issues:  the application of the increased threshold for accredited investors; the definitions of “employee compensation plan,” and “held of record;” and the non-exclusive safe harbor for determining holders of record. 
 
ADISA’s letter states that:
 

  • While the organization believes in the importance of improving access to capital and spurring economic growth, it also recognizes the importance of balance between investor protection and capital formation.
  • ADISA strongly believes that the SEC has achieved that balance in connection with the proposed amendments relating to the Exchange Act reporting thresholds. 
  • The organization supports the proposed increased thresholds for registration and reporting obligations; however, ADISA raises concerns with respect to the application of the proposed increased threshold for accredited investors. 
  • The organization does not believe the SEC should apply the Rule 506(c) accredited investor standard in this context. 

“ADISA supports the proposed amendments to Exchange Act Rule 12g5-1, including the revised statutory requirement and definition of ‘employee compensation plan,’ as well as the revised definition of ‘held of record,’” said John Harrison, chief executive officer and executive director of ADISA.  “Our organization is also in support of the proposed non-exclusive safe harbor for determining holders of record.”
 
ADISA’s Legislative & Regulatory Committee is chaired by John Grady, (RCAP); the drafters of the letter were Kathryn Tupy (FactRight), and Richard Levin (Bryan Cave).  Tom Voekler (Kaplan, Voekler, Cunningham & Frank) signed the letter as ADISA president. 

View the full letter here.