Modernizing Communications Safe Harbors

Time and technology often conspire to make our existing views and approaches seem dated. It's inevitable, and such is the case with the regulations that address permissible communications by issuers. The securities laws regulating communications by issuers have not undergone many revisions since Securities Offering Reform in 2005 despite the fact that the ways in which issuers communicate with investors and in which investors access information have undergone significant change. The Securities and Exchange Commission (SEC, or the Commission) now is required to propose rules relating to the application of the communications safe harbors under Securities Act Rules 138 and 139 in relation to certain funds. The dialogue relating to measures that may promote capital formation, without sacrificing investor protections, has prompted the Commission to consider extending the ability to "test the waters," made available by the Jumpstart Our Business Startups (JOBS) Act to