WASHINGTON — The Securities and Exchange Commission will miss its July 4 deadline to adopt rules that would allow hedge funds to advertise, SEC Chairman Mary Schapiro said Thursday.
Schapiro told House Oversight and Government Reform Committee members the deadlines were “unrealistic” because of the complexities surrounding their finalization.
“Economic analysis is an intricate part of rulemaking,” said Schapiro, adding that the current deadline “does not provide a realistic time frame for the drafting of the new rule, the preparation of an accompanying economic analysis, the proper review by the commission, and an opportunity for public input.”
The measure is part of the Jumpstart Our Business Act, which is designed to help growing businesses access capital by easing regulations. The JOBS Act was enacted into law in April and received widespread bi-partisan support.
In addition to lifting the ban on solicitation, the SEC is also charged with implementing rules surrounding crowd-funding, which allows companies to seek investors over the internet.
Rep. Patrick McHenry, R-N.C., chairman of the House Oversight Committee, stressed the SEC must move quickly to finalize the rules.
“Entrepreneurs are waiting,” McHenry told Schapiro. “You work has a huge impact on small business and economic growth.“
McHenry also criticized Shapiro for expressing her concerns about the legislation after it had been passed. According to McHenry, after the measure passed the House Shapiro sent a letter to Senate lawmakers detailing her concerns about protecting investors.
“I view that as being side swiped at 11th hour,” said McHenry. “That is not the most responsible thing.”
Shapiro said the SEC will publish a timeline for finalizing the solicitation rule later this week but expects to be finished sometime this summer. She said she expects the SEC will be able to meet its Dec. 31 deadline for implementing the crowd-funding rule.