Proposed Rule to Disqualify Felons & Bad Actors From Securities Offerings


SIFMA provides comments to the Securities and Exchange Commission (SEC) on a proposal disqualify felons and bad actors from securities offerings.  The proposed Rule 506(c) under Regulation D of the Securities Act of 1933 to would implement Section 926 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), Release No. 33-9211; File No. S7-21-11.

While SIFMA supports the policy underlying Section 926 of the Dodd-Frank Act, SIFMA believes that Proposed Rule 506(c) is overly broad and, if adopted, would lead to the disqualification of many broker-dealers, particularly larger full-service firms, from being able to participate as selling or placement agents in Rule 506 offerings, and would also make it more difficult and costly for asset managers who advise investment funds to discharge their fiduciary duties. The result will be a less efficient, and more costly, capital raising process for issuers who likely will not have ready access to other traditional sources of financing/capital, such as bank loans.



Asset Management Group (AMG)