In testimony before the Subcommittee on TARP, Financial Services and Bailouts of Public and Private Programs Oversight and Government Reform Committee of the U.S. House of Representatives, Mary L. Shapiro, Chairman of the Securities and Exchange Commission, provided testimony with respect to the rule-making required of the SEC under the Jumpstart Our Business Startups Act (JOBS Act). Title II of the JOBS Act requires the SEC to revise Rule 506 under the Securities Act of 1933, which provides a safe harbor from registration, to allow general solicitation and general advertising for offers and sales made under Rule 506, provided that securities purchasers are accredited investors. Chairman Shapiro testified that the 90-day deadline for such rule-making set by the JOBS Act will not be met. She stated that the “90-day deadline does not provide a realistic time frame for the drafting of the new rule, the preparation of an accompanying economic analysis, the proper review by the Commission and an opportunity for public input.” Nevertheless Chairman Shapiro stated that the Staff has “made significant progress” on a recommendation and economic analysis and while the 90-day deadline (July 4) will not be met, a proposal will be forthcoming “in the very near future.”

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