SEC Rulemaking Affecting Smaller Public Companies: The Rule 144 Amendments

Allan Grauberd, JD

In December 2007, the SEC adopted a variety of rules that affect smaller public companies. These rules provide for greater flexibility for capital raising and are intended to diminish the reliance of issuers on more onerous capital-raising structures. Another set of rules adopted in December 2007 eliminates the current Regulation S-B disclosure regime, moves the relevant disclosure provisions into a now “two tiered” Regulation S-K, provides for the related adoption of a new article in Regulation S-X, and broadens the category of issuers eligible to use scaled-down disclosure requirements. This article focuses on the principal changes brought about by the amendments and gauges their potential impact on smaller public companies.