NASAA Outlines Plan for Streamlined State Review of JOBS Act-related Multi-State Offerings

Download: NASAA Testimony to Senate Banking Securities Subcommittee

WASHINGTON (October 30, 2013) – The North American Securities Administrators Association (NASAA) today told a Senate panel that state securities regulators are developing a streamlined multi-state review system to ease regulatory compliance costs on small companies attempting to raise capital under a provision of the Jumpstart Our Business Startups (JOBS) Act.

“NASAA shares Congress’ desire to improve the United States economy by, in part, spurring private investment in small business.  However, we believe this goal is best achieved through restoring investor confidence, and it is our hope that the JOBS Act will be implemented with a balanced approach that reflects smarter regulation,” NASAA Deputy General Counsel Rick Fleming said in testimony before the Senate Banking Committee’s Securities, Insurance, and Investment Subcommittee.

Title IV of the JOBS Act requires the SEC to adopt a rule to provide an exemption for certain offerings up to $50 million. Because of its similarity to the current exemption under Regulation A, which is capped at $5 million, this new exemption is commonly referred to as Regulation A+.  These offerings will be exempt from SEC registration, but they will be subject to registration at the state level unless the securities are listed on a national securities exchange or sold to a qualified purchaser as defined by the SEC. 

“Given the inherently risky nature of these offerings, and the primacy of the states’ role in policing small size offerings, NASAA believes state oversight is critically important for investor protection and responsible capital formation,” Fleming said. ”However, we also recognize that in some instances this process can be costly and particularly burdensome upon small companies.”

To help small companies comply with the regulation, NASAA is developing a new filing and review process for multi-state securities offerings, including but not limited to, Regulation A+.

Fleming said NASAA’s proposed multi-state review program seeks to strike the best possible balance so that Regulation A+ will be an attractive option for both the small business that needs capital and the investor who is asked to provide it.

“If we are successful in striking such a balance, we believe that shrewd investors and securities professionals will soon see that state review of these offerings generally yields safer opportunities than are available in the ‘Wild West’ of Rule 506, and small businesses will find that smart, efficient, twenty-first century regulation can be beneficial for their capital formation efforts,” he said. 


For More Information:
Bob Webster | Director of Communications



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