June 18, 2019 / 5:04 PM / 4 months ago

U.S. markets regulator seeks public comment on expanding private offerings framework

WASHINGTON, June 18 (Reuters) - The U.S. Securities and Exchange Commission on Tuesday invited the public to comment on whether it should expand its private offering framework, a move to consider boosting the number of investors in private companies, the agency said.

The agency’s request for feedback comes after SEC Chairman Jay Clayton said the agency would address his concern with the large amount of capital raised in the private versus public markets, and the way it bars some investors from participating.

“We are taking a critical look at our exemptions from registration to ensure that our multifaceted private offering framework works for investors and entrepreneurs alike, no matter where they are located in the United States,” said Clayton.

He added that the goal is to expand investment opportunities while maintaining appropriate protections.

The agency said it welcomes responses from startups, entrepreneurs and investors.

Democrat-appointed Commissioner Rob Jackson said that he hesitantly voted in favor to open the rule to comment because of the potential for fraud to less-savvy investors.

“The questions in this release involve a fundamental tradeoff: the costs families suffer when investors are victims of fraud versus the benefits of broader access to capital,” Jackson said. (Reporting by Katanga Johnson Editing by Susan Thomas)

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