For those of you who haven't seen it, the SEC has issued its rules proposal for so-called Regulation A+. It's available here.

Section 401 of the JOBS Act required the SEC to exempt from registration public offerings of securities with an aggregate offering amount of up to $50 million per 12-month period. The Act does not go into much detail, but it does impose some conditions on the exemption the SEC is supposed to adopt:

  • the securities may be offered and sold publicly
  • the securities are not "restricted securities," meaning they may be resold freely
  • the issuer must file an offering statement with the SEC and distribute that offering statement to prospective investors
  • the issuer may solicit interest in the offering prior to filing an offering statement with the SEC
  • the issuer must file audited financial statements annually
  • certain issuers are disqualified
  • the SEC may require the issuer to file periodic disclosures.

Section 401 does not mention Regulation A, but the statutory requirements are similar to the requirements in Regulation A, so everyone has been referring to it as Regulation A+. The SEC could have chosen to issue a new exemption completely separate from Regulation A, but it has not done so. The proposed rules create a two-tiered exemption within Regulation A: what was the old Regulation A exemption, with some updates; and the new exemption.

 

 

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Photo of Colleen Baker Colleen Baker

PhD (Wharton) Professor Baker is an expert in banking and financial institutions law and regulation, with extensive knowledge of over-the-counter derivatives, clearing, the Dodd-Frank Act, and bankruptcy, in addition to being a mediator and arbitrator.

Previously, she spent time at the U. of…

PhD (Wharton) Professor Baker is an expert in banking and financial institutions law and regulation, with extensive knowledge of over-the-counter derivatives, clearing, the Dodd-Frank Act, and bankruptcy, in addition to being a mediator and arbitrator.

Previously, she spent time at the U. of Illinois Urbana-Champaign College of Business, the U. of Notre Dame Law School, and Villanova University Law School. She has consulted for the Federal Reserve Bank of Chicago, and for The Volcker Alliance.  Prior to academia, Professor Baker worked as a legal professional and as an information technology associate. She is a member of the State Bars of NY and TX. Read More

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