NASAA Submits Letter to SEC Objecting to State Preemption of Reg A+ Offerings (with Lofchie Comment)

Leaders of the North American Securities Administrators Association ("NASAA") from 18 states submitted a letter to SEC Chair White in response to the SEC's "attempt to preempt state authority over small corporate offerings" through its Proposed Rule Amendments and Additional Issues Exemptions under Securities Act Section 3(b) ("Regulation A+").

According to the letter, the NASAA leaders cannot fulfill their obligations to protect investors or help small businesses grow their companies when the SEC "attempts to prohibit our review as contemplated in the Regulation A+ Proposal." The letter stated that NASAA already has developed a new coordinated, streamlined, multi-state review program that will allow Regulation A+ filings to be made in one place and be distributed electronically to all states, easing "regulatory burdens for filers without sacrificing investor protection."

Additionally, the letter stated that the leaders question the legal sufficiency of the Regulation A+ Proposal, as well as the "logical and legally sound path" for the SEC is to work with the states in revitalizing the filing process. &

Lofchie Comment: The adoption of the JOBS Act and related rulemakings has created a level of ongoing public discord between the SEC, which is moving to implement the deregulatory direction of the JOBS Act, and the various States, which are seeking to retain or increase their control over State offerings.

See: NASAA Letter to SEC; NASAA Press Release.See generally: Current Version of Reg. A and Proposed Version of Reg. A (available to Cabinet subscribers only). Related news: SEC Issues Proposed Rule Amendments for Exemptions under Securities Act Section 3(b) (Fed. Reg.) (January 23, 2014); SEC Proposes Rules and Forms Amending Regulation A (with Delta Strategy Group Summary) (December 19, 2013); SEC Proposes Amendments to Reg. A to Increase Access to Capital for Smaller Companies (December 18, 2013).