United States

SEC issues Small Entity Compliance Guide for Regulation A

FINANCIAL REPORTING INSIGHTS  | 

In March 2015, the SEC issued Amendments to Regulation A to update and expand the Regulation A exemption by creating two tiers of Regulation A offerings:

  • Tier 1, which consists of securities offerings of up to $20 million in a 12-month period, including no more than $6 million on behalf of selling security-holders that are affiliates of the issuer
  • Tier 2, which consists of securities offerings of up to $50 million in a 12-month period, including no more than $15 million on behalf of selling security-holders that are affiliates of the issuer

Recently, the SEC staff issued Amendments to Regulation A: A Small Entity Compliance Guide to summarize and explain the amendments to Regulation A. The Guide discusses the following, among other matters:

  • The scope of the exemption, such as eligible issuers and securities, offering limitations, investment limitations, etc.
  • Offering statement disclosure requirements, including financial statement requirements
  • Ongoing annual and semiannual reporting, as well as current event updates, for Tier 2 issuers
  • The “bad actor” disqualification rule
  • Relationship with state securities law