For those of you who read my article on March 11, entitled:
JOBS Act State of the Union: What’s Become of Regulation A+ and Crowdfunding?
I provided my prognosis on what to expect as far as the SEC completing final rulemaking on Title IV of the JOBS Act of 2012 (a/k/a Regulation A+):
“So Where Are We Today On Regulation A+?
According to a variety of informed sources, I am pleased to report that the Commission is in the final stages of its deliberative rulemaking process. Many, including myself, are hopeful that we will see final rules approved before the 2015 summer solstice. And though no one outside the Commission is privy to the precise details of the final rules, there is strong expectation that the final rules will be workable (as in broad blue sky pre-emption) and are not expected to stray far from the rules as proposed.”
Well, it seems that even a blind squirrel gets a nut once in a while.
In a Notice issued by the SEC today it announced that the Commission will be voting on Final Rules to implement Regulation A+ next Wednesday, March 25. As the Final Rules will become effective 60 days after publication in the Federal Register, a process that usually takes between 5-15 days, we can expect these Final Rules to become effective by mid-June 2015.
Though we do not yet know the details of the Final Rules, I expect that the most contentious issue, whether state regulators will have the right to review Regulation A+ filings, in addition to the SEC review (Blue Sky review), it is a fairly safe bet that the Commissioners will follow the path set out in the proposed rules – which pre-empted the states from any authority to review these new offerings.
So finally SME’s will have the opportunity to raise up to $50 million per year, in a “Mini-IPO, at a lower cost than a traditional IPO, and with lighter, less expensive ongoing reporting requirements. And unlike securities issued in a Regulation D private placement (SEC Rule 506), the securities will not be restricted, and thus may trade immediately in all 50 states.
Though the Final Rules on March 25 will tell the tale, they are expected to allow all investors, both accredited and unaccredited, to purchase shares in the Regulation A+ offering.
So this is an important step in democratizing access to investments and enhancing the ability of SME’s to access growth capital.
For further information on Regulation A+, please read my Blog, www.corporatesecuritieslawyerblog.com or contact me at sguzik@guziklaw.com.
