Rebalancing Private Placement Regulation
26 Pages Posted: 16 Jan 2013 Last revised: 10 Feb 2013
Date Written: February 6, 2013
The Article examines the investor protection/capital formation balance with respect to private placements of securities. Specifically, it details various rule changes that were implemented over the years to enhance capital formation and other events that have occurred over the same timeframe that have weakened investor protection. The Article submits that the latest round of capital formation enhancements has tilted the balance too far in favor of capital formation and away from investor protection, especially given the size of the private placement market today. Hence, the Article puts forth a proposal for strengthening private placement investor protection. The proposal is meant to serve as a starting point for debate if policy makers conclude rebalancing is needed.
Keywords: securities, private placement, rebalance, capital formation, investor protection, regulation
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