The Committee discussed:  Regulation A+; secondary market trading for private securities; venture capital exchanges; and the accredited investor definition.  The presentation materials are available from the SEC website at

In the introductory remarks made by Commissioner Gallagher, he emphasized the importance of taking steps in order to promote liquidity in the market for private securities.  Gallagher noted that the SEC “can increase the ability of an investor to exit his or her investment in these markets and decrease the illiquidity discount of the investment, and [the SEC] can enhance oversight of and transparency into issuers, thereby promoting investor protection.  And that in turn will increase investors’ willingness to participate in the primary issuance of securities, which enhances capital formation for these small companies that are the lifeblood of our economy.”  Many companies are choosing to remain private longer and, as a result, raising capital in private offerings.  Although several platforms have developed that provide a venue for transacting in sales/resales of restricted securities, a number of impediments remain that hamper further growth.  AnneMarie Tierney of SecondMarket provided an overview of a number of the most significant issues (see:  A codification of the Section 4(a)(1-1/2) exemption certainly would address many of the issues.

Both Commissioner Gallagher and Commissioner Aguilar addressed the potential benefits associated with the development of venture exchanges.  Commissioner Aguilar suggested that a venture exchange that is limited to smaller cap companies may provide a secondary market.  However, he cautioned that prior experiences with venture exchanges were not successful and therefore any initiative should take into account the difficulties encountered by these exchanges.

The Committee considered and discussed the Regulation A+ proposed rule and heard from a NASAA representative regarding the multi-state coordinated review for Regulation A offerings.

Finally, the Committee considered the “accredited investor” definition and, essentially, recommended a “do no harm” approach, including avoiding changes that would have the effect of excluding retirement assets or otherwise limiting the investor universe.