SEC CONSIDERS EASING RULES ON SHARING OF PRIVATE COMPANIES

Mary Schapiro, the chairwoman of the Securities and Exchange Commission, has ordered a staff review of the regulations that guide how small companies raise money from investors, as it considers relaxing the rules.

The review opens the door to changes that supporters say could make it attractive for more new technology companies like to consider selling shares to the public.

S.E.C. staff members will study whether changes should be made in rules that prohibit a company from making a broad solicitation for investment from the public without providing basic financial information or other disclosures.  In addition, the agency will look at whether to raise, from 499, the maximum number of shareholders that a company can have and still remain exempt from public-company filing requirements.  Additionally, the SEC will evaluate what rules should apply to new capital-raising strategies and modern communications methods, given the rapid changes spurred by the Internet and social media, such as Twitter.

The review, Ms. Schapiro said, is intended to give the agency "a fresh look at our rules to develop ideas for the commission about ways to reduce the regulatory burdens on small business capital formation in a manner consistent with investor protection."