June 29 (Bloomberg) -- The U.S. Securities and Exchange Commission scrapped the so-called quiet period rule, allowing companies poised to sell stock or bonds to promote the securities to investors.

SEC commissioners voted 5-0 today to let companies distribute written material, in addition to the prospectus, about securities for sale and to sponsor presentations to the public. The Depression-era rule almost derailed Google Inc.'s $3.47 billion initial public offering in August after Playboy published an interview with the company's founders.

``The package that we consider today will modernize the securities offering and communication process while maintaining investor protection,'' SEC Chairman William Donaldson said at a meeting in Washington. ``Investors are entitled to information at the point they commit to purchase a security.''

Any public statement permitted under the new rule must be accurate and not misleading, matching the legal standard that applies to a company's prospectus. Executives may speak to the media, as in Google's Playboy interview, provided they file a copy of the remarks with the SEC.

The rule ``will create a quiet revolution and make capital formation in the United States far more efficient,'' said Commissioner Harvey Goldschmid.

Under the rule, electronic roadshows for IPOs would have to make the material available to an unrestricted audience to avoid filing with the agency. Other roadshows aren't subject to filing, the SEC said.

The rule doesn't apply to blank check and shell companies and penny stock issuers, the agency said.

`Pay as You Go'

The SEC also streamlined the process for issuing securities by creating a separate class for large companies, which would get access to the market with ``pay-as-you-go'' programs for filing fees and registrations that become effective immediately once they're submitted.

The automatic registration is available to about 2,500 companies with a market capitalization of $700 million or new debt of about $1 billion. These companies must have been registered with the SEC for at least a year to qualify.

Underwriters sold more than $2.8 trillion in offerings registered with the SEC last year.

The Sarbanes-Oxley corporate governance law already requires SEC inspections of these companies at least once every three years. The additional reviews of offering registrations were redundant, the SEC said.

Companies would be ineligible for the fast-track registration if they face enforcement actions for violating securities laws, bankruptcy or have recently received an unsatisfactory audit report.

To contact the reporter on this story: Judy Mathewson in Washington at jmathewson@bloomberg.net.

Last Updated: June 29, 2005 11:27 EDT