March 4, 2008
New Form D Requirements
The SEC continues to tinker with private equity offerings by proposing changes to Form D, the disclosure document for Reg D offerings. All companies must file Form D electronically by March 16, 2009 (or voluntarily after September of this year). The electronic filings will be easy for the public to access (the old ones required a trip to Washington). The public nature of the filings has caused the SEC to eliminate the requirement that 10% or larger shareholder must be disclosed (venture capital funds will retain anonymity). Moreover, there is no longer a requirement that the identity of limited partners be disclosed (encouraging start-ups to use partnership forms of financing once again). Once again the SEC has not gone far enough. The Form was designed to notifiy the SEC of Reg D offerings (to stop fraud) not the public. Now that the filings are on line they will become public disclosure documents more than SEC notices. Why should the public know at all how a private company is financing itself?
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