(Bloomberg News) The U.S. Securities and Exchange Commission is in the "very early stages" of reviewing rules on trading of shares in closely held firms such as Facebook Inc. and Twitter Inc., SEC Chairman Mary Schapiro said.
"What we have to balance at the end of this process is capital formation and its importance to companies with investor protection and the need for investors to have the information that's important for them to make informed business decisions," Schapiro told reporters at the Society of American Business Editors and Writers conference in Dallas on Friday.
Regulators focused on markets for trading private shares after Goldman Sachs Group Inc. announced and then dropped a plan to offer as much as $1.5 billion in Facebook shares to U.S. investors. Lawmakers and small businesses have questioned whether current rules make it too difficult for companies to raise money from investors.
Among the rules under consideration is one that would require companies with 500 or more shareholders to file public financial statements, Schapiro said in an April 6 letter to Representative Darrell Issa, a California Republican. Issa, who leads the House Oversight and Government Reform Committee, asked Schapiro last month to clarify the SEC's position on the rules, saying some of them might be hindering firms' ability to grow.