NSBA Provides Comments on SEC Reg Review

October 6, 2011

On Oct. 6, 2011, NSBA submitted comments to the Securities and Exchange Commission (SEC) regarding their retrospective review of their current, existing regulations, and urged closer attention to small-business concerns. In its comments, NSBA commended President Barack Obama and the SEC for undertaking this review to determine which SEC regulations should be modified, streamlined, expanded or repealed.

NSBA recommend factors to be used for determining which regulations should be reviewed, and urged the SEC to survey all public companies, but particularly small companies with specific questions for Regulation D filers and firms that raised capital with other private placements.

NSBA is developing detailed regulatory and statutory proposals to reform existing SEC regulations to improve small businessesā€™ access to capital. In the near-term, however, NSBA recommend that the primary factors determining which regulations should be reviewed are:

  1. The cost the rule is imposing on the private sector;
  2. Whether the rule is having a disproportionate negative impact on small, entrepreneurial businesses, including:
    1. their ability to raise needed capital, and
    2. their operating costs
    3. whether the rule is having a demonstrative positive impact
    4. protecting the investing public against fraud; or
    5. providing information to the investing public that improves its ability to make informed investing decisions.

NSBA recommended that the SEC undertake to survey all public companies, but particularly small capitalization companies traded on NASDAQ, traded over the counter (OTCCBB, OTC Link (including OTCQX, OTCQB and OTC Pink) and issuers without active market makers. The purpose of this survey would be to develop a database for use by the SEC and the public (especially researchers). If possible, firms that have made Regulation D filing and other private placements should be included. There is currently an astonishing lack of data regarding the securities law regulatory burden on small businesses and the basic economic structure of small capitalization public firms.

To see the NSBA comments, pleaseĀ click here.