On July 10, 2013, the SEC adopted and proposed various rules to implement the JOBS Act enacted last year. The adopted rules will (1) permit general solicitation and advertising for offerings made in reliance on Rule 506 under Regulation D and Rule 144A under the Securities Act of 1933, and (2) disqualify certain “bad actors” from being able to offer securities in reliance on Rule 506. The SEC also proposed certain rule changes impacting Rule 506 offerings that would enhance Form D reporting; require legends on general solicitation and advertising materials; apply new anti-fraud rules to Rule 506 advertising materials; and require pre-filing of general solicitation and advertising materials with the SEC for a two-year period. See “SEC JOBS Act Rulemaking Creates Opportunities and Potential Burdens for Hedge Funds Contemplating General Solicitation and Advertising
,” Hedge Fund Law Report, Vol. 6, No. 28 (Jul. 18, 2013). During a recent Practising Law Institute briefing, expert panelists Paul N. Roth, a founding partner of Schulte Roth & Zabel LLP; Alan L. Beller and Nicolas Grabar, both partners at Cleary Gottlieb Steen & Hamilton LLP; and David M. Lynn, a partner at Morrison & Foerster LLP, explained the SEC rulemaking; dissected the differences between the adopted rules and the 2012 rule proposals; and considered the implications of the rule changes for hedge funds offering securities in reliance on Rule 506. This article summarizes the salient points raised by the expert panel during the briefing.