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How to Use Regulation A+ to Your Advantage While Ensuring Compliance with the New Rules

July 22, 2015
Image from flickr.com; some rights reserved. Click for attribution.

Image from flickr.com; some rights reserved. Click for attribution.

On June 19, 2015, Regulation A+ became effective, expanding Regulation A securities registration exemptions for many issuers. Regulation A+ was enacted as part of the JOBS Act of 2012 to create even more opportunities for small businesses to raise capital without having to comply with some of the more onerous features of the traditional registration process. Regulation A+ creates two Tiers of offerings that are exempt from registration under the Securities Act. Each tier has different offering caps, disclosure requirements, and ongoing reporting obligations, all of which enable issuers to have increased flexibility depending on their financing needs.

Tier 1 has offerings of securities of up to $20 million in a 12-month period, and Tier 2 has offerings of securities of up to $50 million in a 12-month period. Both Tiers are subject to certain basic requirements, while Tier 2 offerings are also subject to additional disclosure and ongoing reporting requirements.

Sifting through, keeping up with, and satisfying all of the new rules and requirements certainly can be overwhelming.

How can Lexis® Securities Mosaic help?

Use Lexis® Securities Mosaic to find recent disclosure; rulemaking and administrative guidance; and news and commentary related to Regulation A+, the registration process, and the new rule’s real-world applicability to small businesses.

Disclosure

  • Monitor Regulation A+’s new EDGAR forms. Accompanying the implementation of Regulation A+ is a host of new EDGAR forms, including 1-K (annual report), 1-U (current report), and 1-Z (exit report). By setting up alerts through the Securities Mosaic® SEC Filings page, you will be among the first to know when any of these new forms are filed with the SEC and see what they look like in action.
  • Track changes to Form 1-A. The amendments to Regulation A also include changes to its primary offering document, Form 1-A. Previously available only in hard copy, the new Form 1-A must now be submitted electronically.  Part II of the form has been revised to eliminate the Q&A disclosure format option and include additional disclosure requirements for Tier 2 issuers regarding executive compensation and related party transactions.  Search the Securities Mosaic® SEC Filings page for examples of Form 1-A to compare the old Form 1-A to the newly revised version and keep track of which companies are utilizing Regulation A+ offerings.
  • Look for an uptick in Form 8-A filings. Among the potential benefits of Regulation A+ is a streamlined process for Exchange Act registration under Section 12(b). Tier 2 issuers interested in listing their securities on a national securities exchange may use the Form 8-A short form registration statement, rather than Form 10, provided they follow the S-1 disclosure model on Part II of the offering document. The SEC has revised Form 8-A for use by Regulation A+ issuers; browse the Securities Mosaic® SEC Filings page to see Form 8-As submitted in connection with Regulation A+ offerings.

Guidance

  • View the full text of the SEC adopting release and other federal agency materials. Search the Securities Mosaic® SEC Materials page to read the complete text of Regulation A+ as adopted by the SEC. Our Laws, Rules, and Agency Materials page can yield relevant materials from other agencies as well, including the GAO federal agency major rule report on Regulation A+.
  • Search and sign up for alerts on rulemaking related to the JOBS Act and other new laws affecting capital markets. Set up real-time alerts on Securities Mosaic® to help you track changes as they’re occurring and stay on top of your compliance and disclosure obligations.
  • Pull SEC guidance materials related to Regulation A+. Wondering if Regulation A+ issuers can use Twitter to “test the waters” without violating Rule 255 communication requirements? Curious how SEC staff will treat non-public correspondence submitted with the Regulation A+ offering circular for review prior to filing? Get the answers by visiting our SEC Materials search page and searching for “Regulation A+” within Compliance & Disclosure Interpretations and Other Guidance.

News and Commentary

  • Stay well-informed on everything related to securities. Subscribe to our Daily Securities News in your inbox each morning. This comprehensive newsletter includes SEC updates, corporate and securities news stories from an assortment of notable world news sources, recent law firm memos, market regulation updates, pending securities legislation, SEC enforcement, and an SEC Final Rules effective date calendar.
  • Check out what the top U.S. law firms are saying. Go to our database of over 100,000 Law Firm Memos and type in relevant keywords (e.g., “JOBS Act,” “Regulation A+,” “Form 8-A,” “Form 1-A”). Set up a daily alert to automatically receive the results of your personalized search in your inbox.
  • See what other influential analysts are saying. Sign up for our daily Securities Mosaic Blogwatch email, which includes opinion and analysis from well-respected sources such as CorporateCounsel.net and the Harvard Law School Forum on Corporate Governance and Financial Regulation. You can also text-search the past six months of content in our Blogwatch archive.

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