The Securities and Exchange Commission is rethinking "quiet period" rules that dictate what companies can say in the run-up to initial public offerings, according to a letter sent by Mary Shapiro, the agency's chairman, to Rep. Darrell Issa of the House Oversight and Government Reform Committee, the Wall Street Journal reports.

During Facebook's IPO, smaller investors lacked information and analysis regarding the company's prospects that were available to the large clients of certain banks. The SEC also has yet to make changes to its policies required by the JOBS Act, which aims to jumpstart capital-raising. 

The quiet period is designed to prevent company executives from over-hyping their stock. It allows communication with clients, but not publication of research. The House Oversight and Government Reform Committee has called for changes in IPO regulations. While companies would likely embrace a softening of quiet period rules, Shapiro has said that the quiet period does offer benefits and that publicly available documents provide adequate information for investors.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.