Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Friday, November 22, 2013

NASAA: President's Message on Regulation A+

North American Securities Administrators Association President, Andrea Seidt, has issued a statement on Regulation A+.  Seidt states:

Title IV of the JOBS Act requires the SEC to adopt a rule to provide an exemption for certain offerings up to $50 million. Because of its similarity to the current exemption under Regulation A, which is capped at only $5 million, this new exemption is commonly referred to as Regulation A+.

These offerings will be exempt from SEC registration under the new Section 3(b)(2) of the Securities Act of 1933, but they will be subject to registration at the state level unless the securities are listed on a national securities exchange or sold to a qualified purchaser as defined by the SEC.

Given the risky nature of investments in startups, and the fact that the states have traditionally been the primary regulator of small offerings, NASAA believes state oversight of these offerings is essential. However, we recognize the need to change some of our longstanding policies to make Reg A+ successful.

Toward that end, NASAA has consulted with a task force of the American Bar Association to develop a proposal that peels back some of our normal guidelines to accommodate this new type of offering.

As part of the proposal, we have designed a multistate review process in which one or two states will take a lead role in reviewing a registration application and working through any deficiencies with the company issuing the securities in a set timeframe.

In addition, we are developing a multistate electronic filing platform that will allow one-stop filing with all states, and we intend to build out that system to accommodate Reg A+ filings. Think of it as the equivalent of a CRD/IARD system for multistate offerings for the corporation finance world.

NASAA recently released for public comment a proposal to establish this new multistate review program.

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