The Securities and Exchange Commission (SEC) Investor Advisory Committee (IAC) has requested an extension on comments regarding the current Concept Release for regulatory harmonization pertaining to securities exemptions.
The Concept Release, akin to a consultation, was launched in June as an attempt to simplify securities rules that have become a stultifying jumble of jargon – nearly impossible for a normal person to comprehend. Many aspects of securities exemptions are outdated or do not make sense. The current deadline for interested parties to submit public comments is September 24, 2019. Comments have been trickling in. Typically, as the deadline nears, submissions will increase in velocity.
The IAC was established by the Dodd-Frank Act to highlight or advise the Commission on regulatory priorities, rules, disclosure requirements and more. The Dodd-Frank Act authorizes the committee to submit findings and recommendations for review and consideration by the Commission.
Earlier this month, the IAC Chair Anne Sheehan, posted a comment requesting an extension of 60 days so their Committee could further deliberate on recommendations which may be submitted by the IAC. Sheehan noted that the current 90 day comment period is long by SEC standards but requested the additional 2 months anyway.
While the IAC has yet to post any public comments on the Concept Release, at least one IAC member has. The SEC Investor Advocate, Rick Fleming, who sits on the IAC, contributed his thoughts in July raising the alarm as to a possible update to the Accredited Investor definition. The current definition, based solely off a wealth metric, has long been known to exclude individuals that possess the sophistication to make investment decisions in exempt offerings, is something he is apparently against.
If the deadline for comments is extended it may push any possible action by the SEC further down the road. It is not clear, how or when the SEC will respond to the IAC’s request.