Regulation A expanded to reporting companies
Filed under: SEC matters
The SEC’s final rule allows Exchange Act reporting companies to use the Regulation A exemption from registration for their securities offerings. The amendments provide reporting companies additional flexibility when raising capital.
Applicability
Release No. 33-10591; File No. S7-29-18
- Domestic and Canadian public companies subject to Exchange Act reporting requirements
Relevant dates
Effective January 31, 2019
Key impacts
The Economic Growth, Regulatory Relief, and Consumer Protection Act mandated the SEC to revise Regulation A (Reg A) to allow Exchange Act reporting companies to use the exemption.
The amendments:
- Allow Exchange Act reporting companies to use the exemption from registering up to $50 million of securities in a 12-month period
- Permit Exchange Act reporting companies to meet their Reg A reporting obligations through their Exchange Act reporting
- Eliminate the automatic suspension provision within Reg A when a company subsequently becomes subject to Exchange Act reporting requirements
- Clarify what happens if a company’s Exchange Act reporting obligation is terminated or suspended
- Make conforming changes to Reg A and Form 1-A
Implementation guidance is provided for:
- Financial statements provided in Form 1-A
- New or revised accounting standards
- Canadian issuers
- Securities ‘held of record’ for Exchange Act Section 12(g)