On Wednesday, the Securities and Exchange Commission agreed to allow a wide range of firms, such as investments banks, an increased scope allowing them to privately put up for sale their securities to US investors. Securities and Exchange Commission also allowed other instruments such as private equity funds and hedge funds to come along for the ride.
The regulatory agency will soon release details of the regulation that will terminate the prohibition against widespread advertising in the "Rule 506 offerings" as mandated by the JOBS Act. The JOBS Act was signed into law in 2012 by President Obama. This opens the possibility of companies running full page ads in newspapers and magazines or TV commercials on Sunday mornings.
Some limitations to the regulation are in place. The firm marketing the securities will have to take practical measures to assess accredited investor status. They must ensure that those targeted are those who meet certain income and net worth tests.
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