SEC allows use of Reg. A+ for public companies

Category: Reg. A+, Exchange Act, SEC, Regulation A

SEC allows use of Reg. A+ for public companies


On December 19, 2018, the Securities and Exchange Commission (SEC) adopted final rules to allow companies that are subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”) to rely on the Regulation A exemption from registration for their securities offerings. The rule amendments also permit such reporting companies to meet their Regulation A on-going reporting obligations through their Exchange Act reports.

"Regulation A provides an exemption from registration under the Securities Act for offerings of securities up to $50 million in a 12-month period," said SEC Chairman Jay Clayton. "The amended rules will provide reporting companies additional flexibility when raising capital."

Some of the Exchange Act reporting companies that may use this new tool to raise capital would be companies that are not eligible (or have lost their eligibility) to use Form S-3 for securities offerings, or smaller reporting companies that aim to raise less than $50 million in a 12 month period that desire to save money on legal fees (as Form 1-A is generally less time-consuming to complete than Form S-1). Our previous blog post delves more deeply into the kinds of public companies that may use this new rule.

The SEC’s adopting release announcement can be found here, and the text of the rule amendments can be found here.

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