SEC's Regulation A+ Amendments Published in Federal Register

The SEC's final rules to expand the scope of Regulation A were published in the Federal Register.

The final rules, which are intended to expand the scope of Regulation A in order to facilitate smaller companies' access to capital – referred to as "Regulation A+" – are mandated by Title IV of the JOBS Act. The final rules update Regulation A's existing exemption to enable smaller companies to offer and sell up to $50 million in securities within a 12-month period, subject to eligibility, disclosure and reporting requirements.

The final rules provide for two tiers of offerings: (i) Tier 1, for offerings of up to $20 million in securities within a 12-month period that do not include more than $6 million in offers by selling security holders that are affiliates of the issuer, and (ii) Tier 2, for offerings of up to $50 million in securities within a 12-month period that do not include more than $15 million in offers by selling security holders that are affiliates of the issuer. Both Tiers are subject to certain basic requirements, but Tier 2 offerings are subject to additional disclosures and ongoing reporting requirements.

The final rules also provide for the preemption of state securities law registration and qualification requirements for securities offered or sold to "qualified purchasers" in Tier 2 offerings. Tier 1 offerings will be subject to federal and state registration and qualification requirements, and issuers may take advantage of the coordinated review program developed by the North American Securities Administrators Association.

The final rules will become effective on June 19, 2015.

See: 80 FR 21806.Related news: SEC Adopts Regulation A+ (with Delta Strategy Group Summary) (March 25, 2015); Washington State Securities Division Issues Preproposal Statement of Inquiry (March 30, 2015).