Final Rules
Filing Requirements
We are adopting provisions for electronic filing and delivery requirements in the final rules for Regulation A substantially as proposed.231 We agree with commenters that support requiring electronic filing of offering and related materials and believe that this requirement will ultimately benefit issuers and investors by streamlining the offering process. As adopted, issuers must file their Regulation A offering statements with the Commission electronically on EDGAR.232 Further, as proposed, we are amending Form 1-A to consist of the following three parts:
Part I: an eXtensible Markup Language (XML) based fillable form, which
captures key information about the issuer and its offering using an easy to complete online form, similar to Form D, with drop-down menus, indicator boxes or buttons, and text boxes, and assists issuers in determining their ability to rely on the exemption. The XML-based fillable form will provide a convenient means of assembling and transmitting information to EDGAR,
230 Frutkin Law Letter; Heritage Letter (suggesting that the review time needs to be reduced by two- thirds); Letter from Gregory S. Fryer, Esq., Partner, Verrill Dana LLP, February 28, 2014 (“Verrill Dana Letter 1”) (recommending providing guidance to issuers, staff training, and more discretion to the staff to make materiality determinations and to work informally with issuers); Letter from Ted J. Coombs, Chief Technology Officer, Workers On Call, March 24, 2014 (“WOC Letter”).
231 In conjunction with the adoption of final rules for electronic filing and delivery, we are making clarifying revisions to the proposed rules that renumber some of the proposed provisions in the final rules. See, e.g., Rule 251(e), (f) (originally proposed Rules 252(c), (e), respectively).
232 See Rule 101(a)(vii), (xvii) of Regulation S-T, 17 CFR 232.101(a)(xvii); see also Rule 251(f). As proposed, and in conjunction with this change, Item 101(c)(6) of Regulation S-T (17 CFR 232.101(c)(6)) is revised so that it no longer prohibits electronic submission of filings related to Regulation A offerings.
without requiring the issuer to purchase or maintain additional software or technology;233
Part II: a text file attachment containing the body of the disclosure document
and financial statements, formatted in HyperText Markup Language (HTML) or American Standard Code for Information Interchange (ASCII) to be compatible with the EDGAR filing system;234 and
Part III: text file attachments, containing the signatures, exhibits index, and
the exhibits to the offering statement, formatted in HTML or ASCII to be compatible with the EDGAR filing system.235
As proposed and adopted, all other documents required to be submitted or filed with the Commission in conjunction with a Regulation A offering, such as ongoing reports, must generally be submitted or filed electronically on EDGAR.236 As materials will be available on EDGAR, we do not see a need to separately require issuers to maintain a corporate website where the public may access all non-confidential filings. Issuers may, however, elect to provide the filings on their website or to their EDGAR filing page.
Consistent with current Regulation A, there are no filing fees associated with the Regulation A filing and qualification process.
We believe the approach to electronic filing adopted today will be both practical and useful for issuers of Regulation A securities, investors in such securities, and other
233 Part I (Notification) of Form 1-A. As discussed more fully in Section II.C.3.a. below, the cover page and Part I of current Form 1-A would be converted into, and form the basis of, the
XML-based fillable form.
234 Part II (Offering Circular) of Form 1-A. See discussion in Section II.C.3.b. below.
235 Part III (Exhibits) of Form 1-A. See discussion in Section II.C.3.c. below.
236 For a discussion on the ongoing reporting requirements, see Section II.E. below.
market participants. Issuers will be able to maintain better control over their filing process, reduce the printing costs associated with filings, obtain immediate confirmation of acceptance of an offering statement, and ultimately save time in the qualification process. Investors will gain real-time access to the information contained in
Regulation A filings.237 We anticipate that the efficiency of the Regulation A market
should improve with the increased accessibility of information about Regulation A issuers and offerings. Additionally, as with registered offerings, electronic filing on EDGAR will allow for more efficient storing, processing, and disseminating of Regulation A filings than paper filings, which should improve the efficiency of the staff review and qualification processes.
Electronic filing also will facilitate the capture of important financial and other information about Regulation A issuers and offerings that will enable the Commission and market participants to analyze any market that develops in Regulation A securities, including, for example, information about issuer size, issuer location, key financial metrics, summary information about securities offered and offering amounts, the jurisdictions in which offerings take place, and expenses associated with Regulation A
offerings.238