Corporate Law Bulletin, June 29, 2007

On May 23, 2007, the Securities and Exchange Commission (the “SEC”) voted to propose several modifications to its existing rules governing capital formation and reporting requirements for smaller public companies. Last week, the SEC published the full text of these much-anticipated proposed rules in two releases. Release 33-8813 proposes amending Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), to, among other things, shorten the holding period required before restricted securities held by “affiliates” (e.g., directors, executive officers and shareholders with control positions) and non-affiliates may be resold under the Rule, and amending Securities Act Rule 145 to eliminate the “presumptive underwriter” provisions for companies other than shell companies and to make it otherwise consistent with revised Rule 144.[1] Release 33-8812 proposes broadening the eligibility requirements for “short form” registration of public offerings on Forms S-3 and F-3 so that companies with a public float below $75 million can have easier access

to the public securities markets.[2] If adopted, these proposals have the potential to reduce the regulatory

burden imposed upon and facilitate capital formation by smaller companies.