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ADISA Submits Comments to SEC Regarding Section 12(g)

INDIANAPOLIS (March 3, 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. For the full content of the letter, click here.

About ADISA

The Alternative & Direct Investment Securities Association is the leading trade association serving alternative investment and securities industry professionals who are active in offering, managing and distributing private and public direct investments. ADISA connects members directly to key industry experts through intimate forums and leading edge conferences and trade shows providing timely trends and education. The association was founded in 2003 and has more than 4,000 members who are key decision makers that represent over 30,000 professionals throughout the nation. ADISA works to maintain the integrity and reputation of the industry by promoting the highest ethical standards and providing education, networking opportunities and resources to its members.