SEC sketches VC details

New rules from the Securities and Exchange Commission give life sciences VCs some breathing room under last year's Dodd-Frank Wall Street Reform and Consumer Protection Act. However, VCs that invest in IPOs from their portfolios or have funds that invest in the public markets may not be exempt from the law's reporting requirements.

A goal of the legislation was to regulate investors, such as large hedge funds, that policy makers worry could undermine the U.S. economy through overly risky bets. Although the legislation explicitly excluded venture firms from regulation, the question was how the SEC would define venture capital...