Elisse Walter, the newest head of the Securities and Exchange Commission, is likely to successfully push through a deal to ease rules which have been in place for decades restricting hedge funds, buyout shops and small businesses from marketing their wares in public.
Walter, a Democrat who took over the reins of the SEC last week, recently expressed her concern about the proposal. She has fears that loosening the restrictions on public advertising could result in instances of fraud or the sales of securities whose risks investors do not completely understand. Walter pointed out that although the regulators stand to benefit from the change in rules it is still the responsibility of the SEC to insure that investors are protected from risks and oversee hedge fund compliance.
Walter is the head of a commission split between two Republican members and two Democrats, one of them her. This make-up of the commission makes it appear like a compromise proposal will be hard, if not impossible, to achieve.
Analysts contend, however, that Walter will be able to persuade at least one of the Republicans to come to her side and adopt the new rule. It is believed that she will find common interests with the Republican members of the commission who want to allow advertising in this industry. The JOBS act mandated the provision for solicitation of investors by legislation which was approved in April by Congress.
“I am optimistic that Walter and the two Republicans can reach a deal,” said Brian Lane, a former director of the corporation finance division at the SEC while Arthur Levitt was chairman during the Clinton administration.