By: Cydney Posner

The SEC has posted two of its recent rule proposals. Termination of a Foreign Private Issuer's Registration of a Class of Securities Under Section 12(G) and Duty to File Reports Under Section 13(A) or 15(D) of the Securities Exchange Act of 1934,  is a reproposal of amendments to the rules related to termination of registration of a class of equity securities under the Exchange Act. Under the current rules, a foreign private issuer may find it difficult to terminate its Exchange Act registration and reporting obligations and may only suspend, not terminate, a duty to report under section 15(d) of the Exchange Act. Reproposed Exchange Act Rule 12h-6 would permit a foreign private issuer to terminate Exchange Act reporting for a class of equity securities under either section 12(g) or section 15(d) if the issuer were to meet a quantitative benchmark requiring the comparison of the average daily trading volume of the issuer's securities in the United States with that in its primary trading market. The rule amendments would also require internet posting of material information that is required by a foreign private issuer's home country after the company has exited the Exchange Act reporting system

The SEC has also posted the release relating to Prohibition of Fraud by Advisers to Certain Pooled Investment Vehicles; Accredited Investors in Certain Private Investment Vehicles This proposal is designed to provide additional investor protections that would affect pooled investment vehicles, including hedge funds. The first proposal would prohibit advisers to pooled investment vehicles from making false or misleading statements or otherwise defrauding investors or prospective investors in those pooled investment vehicles. The second proposal would revise the definition of accredited investor as it relates to natural persons. The latter rules would apply solely to the offer and sale of interests in certain privately offered investment pools specified in the rules.

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