(Bloomberg News) The U.S. Securities and Exchange Commission is studying whether growth of closely held companies is being hindered by limits on the number of shareholders they can have, SEC Chairman Mary Schapiro said.

The agency's staff is reviewing a rule that requires firms with more than 499 shareholders to disclose financial information, as well as other restrictions on how private firms can solicit investors, Schapiro said today remarks prepared for a House Oversight and Government Reform Committee hearing on the future of capital formation. The SEC is forming a committee on small and emerging firms to contribute to the review, she said.

"Companies seeking access to capital should not be overburdened by unnecessary or superfluous regulations," Schapiro said in her statement. "At the same time, while we have an important responsibility to facilitate growing companies' access to America's investment capital, we must balance that responsibility with our obligation to protect investors and our markets."

The SEC sharpened its focus on how unlisted companies raise money after Goldman Sachs Group Inc. halted a planned offering of as much as $1.5 billion in Facebook Inc. to U.S. investors. Goldman Sachs said on Jan. 17 it pulled the offer because of concern that "immense media attention" could violate SEC rules limiting marketing of private securities.

Issa Statement

That decision showed that "private capital formation in the U.S. is increasingly difficult," Representative Darrell Issa, the California Republican who leads the House panel, said in a statement yesterday. "Reversing this trend and efficiently attracting capital to the best investment opportunities in the United States is critical to a widespread economic recovery and the long-term viability of our global market position."

The 500-owner limit, which applies to firms with more than $10 million in assets, was created to ensure that shareholders get sufficient information about their investments. While the law counts so-called owners of record toward that threshold, people who invest through a fund -- the so-called beneficial holders -- aren't included.

Schapiro has asked staff to review both the number of shareholders that should trigger registration as well as how those holders are counted, she said in her statement.

Barry Silbert, chief executive officer of SecondMarket Inc., urged that the limit be significantly increased or eliminated altogether.