United States

Exchange Act reporting companies may use 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

Originally, this exemption from registration was not available to companies that are subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934. Recently, the SEC adopted Final Rule 33-10591, Amendments to Regulation A, to permit Exchange Act reporting companies to rely on the Regulation A exemption for their securities offerings. The amendments also permit such reporting companies to meet their Regulation A ongoing reporting obligations through their Exchange Act reports.