SEC Issues Compliance and Disclosure Interpretations regarding Regulation A Offerings
On March 31, 2017, the SEC Staff published six new Compliance and Disclosure Interpretations (C&DIs) addressing certain situations relating to offerings of securities under Regulation A.
Guidance for the Application of Regulation A
- Filing of Form 8-A. An issuer may use Form 8-A (a short-form registration statement) to register a class of securities under Section 12(g) of the Securities Exchange Act of 1934 (the “Exchange Act”) concurrent with the qualification of a Tier 2 (up to $50 million) offering statement under Regulation A. To do so, the issuer must file the Form 8-A within five calendar days after the qualification of the Tier 2 offering statement. If the fifth calendar day falls on a Saturday, Sunday, or federal holiday, the issuer may file the Form 8-A the next business day following the weekend day or federal holiday.
- Suspension of Tier 2 Reporting Obligation in Certain Circumstances. Upon withdrawal of its Tier 2 Regulation A offering statement pursuant to Rule 259, an issuer that is not subject to a Tier 2 reporting obligation before qualifying a Tier 2 offering statement and that has not made any sales under such offering statement may file a Form 1-Z to suspend its Tier 2 reporting obligation, provided the issuer has not filed an annual report pursuant to Regulation A or the Exchange Act for the fiscal year in which the issuer qualified that offering statement.
- Age of Financial Statements. Paragraph (c)(1)(i) of Part F/S of Form 1-A requires issuers to comply with Article 8 of Regulation S-X except as to the age of financial statements. For Tier 2 offerings, issuers may use paragraphs (b)(3)-(4) of Part F/S for the age of both interim period and fiscal year financial statements.
- Tax Opinion May be Filed as Exhibit. An issuer qualifying a Tier 1 or Tier 2 offering statement is not required to file a tax opinion as an exhibit to its Form 1-A, but it may elect to do so.
- Auditor’s Consent Not Required to Be Filed as Exhibit to Annual Report. An issuer with an ongoing Tier 1 or Tier 2 reporting obligation does not have to include as an exhibit to its Form 1-K (Annual Report) an auditor’s consent to the use of an audit report for the financial statements contained in the Form 1-K.
- No Requirement to Submit Sales Materials to SEC Staff Before Use. An issuer does not need to submit sales material for a Regulation A offering to the SEC Staff before using that material.
The C&DIs are available at: https://www.sec.gov/divisions/corpfin/guidance/securitiesactrules-interps.htm
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