The Investor Advisory Committee (IAC) established by Section 911 of the Dodd-Frank Act has released its recommendations

to the SEC on the proposed general solicitation rule. Here, somewhat appreciated, are the recommendations:
1.

2. 3.

4. 5. 6.

7.

As a precondition for claiming the new general solicitation exemption, issuers should be required to file a new Form GS or a revised version of Form D that would include data relating to control persons, the identity of the issuers accountants and legal counsel, a description of the business and proposed use of proceeds, and a description of the issuers plans with respect to general solicitation. Copies of all materials used in the general solicitation should be provided to the SEC either before or shortly following the first sale. The SEC should provide clear and enforceable safe harbors for verifying accredited investor status, including safe harbors relating to the use of third parties for verification, to replace the facts and circumstances reasonable steps standard that the SEC has proposed. [editors bold] Filing Form D should be a condition for relying on the Regulation D exemption [currently Form D is required to be filed, but it is not actually a condition to the exemption]. The SEC should take steps to ensure that any performance claims used in general solicitation materials are based on a clear, well-defined, and auditable standard. The SEC should revise the natural person prong of the accredited investor definition to better align the definition with persons who have the financial sophistication to analyze private offerings and/or sufficient wealth to withstand losses. The IAC acknowledges that the SEC is prohibited from adjusting the net worth portion of the definition until 2014, but asserts that other revisions to the accredited investor definition are possible now. The SEC should adopt the bad actors rule that was proposed in May 2011 pursuant to Section 926 of the Dodd-Frank Act. [editors bold] The IAC feels that all rules relating to offerings using general solicitation should take effect at the same time, including the proposed rule that would disqualify bad actors from taking advantage of the general solicitation exemption.