This is a great post by David Feldman over at The Reverse Merger Blog:

That is the headline from today’s SEC Small Business Conference, which David Feldman, principal of the law firm of Feldman Weinstein & Smith LLP, attended in Washington along with about 75 others in person and many others listening in a webcast. In his introduction, the Chief of the Division of Corporation Finance made clear he’d like to get the new small business proposals approved and finalized before New Year’s. That said, it looks like it could be even quicker than that, because prior to making his pronouncement, he said, “Chairman Cox always tells us, under promise and over deliver.” The sooner the better we say!

David Feldman’s Review of SEC Proposals

In general, the day was a true love fest between the regulators and the panelists and audience (not always the case at these things!). Clearly most of us in the hustings are extremely pleased that the Commission has made a priority of passing a number of the recommendations of the Advisory Committee on Smaller Public Companies, and while any criticisms generally were limited to issues around the edges, all the panelists were very positive with regard to these changes.

Some other highlights from the event:

1. SEC Chairman Cox spoke eloquently about the importance of small business in America, and the fact that government is often “getting in the way” of smaller companies. He views the mission 0f encouraging and promoting capital formation in these businesses as “vitally important.”

2. A panel spoke about the proposed Regulation D changes, in particular the beginning of allowing limited advertising to a newly defined group of “super-accredited investors.” Many hoped they’d go further, but the panel indicated this is a “first modest step” in moving away from banning all general solicitation, with the hope it could go further down the road.

3. That same panel supported reducing the integration safe harbor from 6 months to 3 months.

4. Then a panel convened on the Rule 144 and Form S-3 changes, led by White and Advisory Committee member Steven Bochner. Bochner described this as an “extraordinary time” in securities regulation. White said he had never seen the Commission so focused on the needs of small business. They had taken, with the Chairman’s help, a realistic approach to making proposals that could actually get done in a reasonable time frame.

5. With regard to the S-3 proposal, panelists were mostly pushing to go higher than the 20% of public float limit on how many shares can be registered on S-3 for smaller companies. White’s answer/non-answer seemed to suggest that was not going to change. Then they suggested S-3 be available not only for primary offerings, but for resale registrations as well, and with a limit. White did not address or challenge this point, leading one to think maybe, just maybe, they might reconsider this.

6. In their discussion of the Rule 144 changes, the challenge, as indicated in many comment letters, related to tolling the proposed 6 month period for the period of time that a holder is hedging the stock. Again, not sure this is going to change in the final.

7. Commissioner Paul Atkins, a Bush appointee to the SEC, spoke at lunch about some of the same things that Chairman Cox relayed in the morning.

All in all, a good day and very positive feedback to the SEC, which hopefully will lead to a smooth and near-term process for moving to action on these proposals.

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