New Law Allows SEC Reporting Companies to use Regulation A+


New Law Allows SEC Reporting Companies to use Regulation A+

Last week, President Trump signed the Economic Growth, Regulatory Relief and Consumer Protection Act which orders the SEC to allow reporting companies to use Regulation A+ (among other things).

Previously, companies that were subject to SEC reporting requirements could not use Regulation A to raise capital.  That means all companies on the Nasdaq and NYSE, and SEC reporting companies on the OTC Markets could not use Regulation A.

In reaction to the news, David Feldman said, “Allowing already public and reporting companies to use Reg A+ will provide them access to the unique benefits of this streamlined public offering process. Over-the-counter companies can conduct a Tier 2 public offering free of state blue sky merit review. All companies can use broad “testing the waters” with online or broadcast promotion of their public offering to anyone – this is limited to institutional investors otherwise. The SEC also has been giving much more limited review to these filings, which are completed quickly.

Feldman points out that, this is a very positive change but it is somewhat limited because many SEC reporting companies can already use short registration Form S-3. Form S-3 is generally much quicker, cheaper and simpler than a Reg A+ offering. Feldman predicts that, as a practical matter, the new law will likely only help over-the-counter companies with market caps below $75 million.


Learn more HERE.




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