SEC Adopts Regulation A Amendments

April 10, 2015

As mandated by the JOBS Act, the SEC adopted rules to amend Regulation A to facilitate smaller companies’ access to capital. The amended rules, referred to as Regulation A+, enable smaller companies to offer and sell up to $50 million of securities in a 12-month period without going through a full-blown registration process, subject to eligibility, disclosure and reporting requirements. The rules provide for two tiers of offerings: Tier 1, for offerings of securities of up to $20 million in a 12-month period, with not more than $6 million in offers by affiliates; and Tier 2, for offerings of securities of up to $50 million in a 12-month period, with not more than $15 million in offers by affiliates. Tier 2 offerings are subject to certain ongoing reporting requirements, including a requirement to provide audited financial statements. Importantly, however, state law registration requirements will be preempted in Tier 2 offerings, making Regulation A+ a much more viable alternative than under the prior regulation. Read the SEC press release.

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