The Securities and Exchange Commission has adopted rules to allow reporting companies to use the Regulation A exemption from registration. Regulation A provides an exemption from registration under the Securities Act of 1933 for offerings of securities up to $50 million in a 12-month period and was previously not available to companies that are Exchange Act reporting companies. The Economic Growth, Regulatory Relief, and Consumer Protection Act that was enacted earlier this year requires the SEC to adopt this change and allow reporting companies to use Regulation A.
Regulation A provides an exemption from Securities Act registration requirements for offers and sales of securities up to $20 million (Tier 1 offerings) or up to $50 million (Tier 2 offerings).
The final rules amend Securities Act Rule 251 to permit companies subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act to use Regulation A. The final rules also revise Securities Act Rule 257 with respect to Tier 2 offerings. The amendment to Rule 257 states that companies that meet the reporting requirements of Section 13 of the Exchange Act will be deemed to have met the periodic and current reporting requirements of Rule Regulation A. So long as the reporting company is current in its Exchange Act reporting as of the due dates for periodic reports on Form 1-K and Form 1-SA required under Rule 257(b) (including, as applicable, the due dates for any special financial reports on such forms), its Rule 257 reporting obligation will be deemed to be met. However, if at the relevant Form 1-K or Form 1-SA due date the issuer is not current in its Exchange Act reporting, the issuer will be required to file Regulation A reports.
Other conforming changes to Regulation A and Form 1-A were also made. Implementation guidance is available in the SEC’s release.
The amendments to Regulation A will become effective upon publication in the Federal Register. Any comments are due 30 days after publication in the Federal Register. Comments can be submitted electronically using the SEC’s Internet comment form (http://www.sec.gov/rules/final.shtml); or by sending an e-mail to rule-comments@sec.gov. Send paper comments in triplicate to Brent J. Fields, Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090. All submissions should refer to File Number S7-29-28 (include this number in the subject line if sending a comment via e-mail).
Sources:
SEC Release No. 33-10591: Amendments to Regulation A (www.sec.gov)
SEC Adopts Final Rules to Allow Exchange Act Reporting Companies to Use Regulation A (www.sec.gov)
