Program Eases Regulatory Hurdles to Benefit Small Businesses Without Sacrificing Investor Protection

WASHINGTON, D.C. (May 12, 2014) – The North American Securities Administrators Association (NASAA) today announced the launch of a coordinated multi-state review program to ease regulatory compliance costs on small businesses attempting to raise capital under Regulation A.

“Our modernized system is designed to review Regulation A filings in a timely and efficient manner in order to reduce regulatory hurdles and compliance costs for filers without sacrificing investor safeguards,” said Andrea Seidt, NASAA President and Ohio Securities Commissioner.

Interested applicants can find more information about the program on the NASAA website here.

Under the new program, Regulation A filings can be made in one place and distributed electronically to all states. Lead examiners will serve as the primary point of contact for a filer and each state will be given 10 business days for review. Lead examiners alone will interact with issuers to resolve any deficiencies. If there are no deficiencies in the application, no comments will be necessary and the registration will be cleared by the lead examiners within 21 business days after it is filed, Seidt said.

The program was initiated in response to Title IV of the JOBS Act, which raised to $50 million from $5 million the amount that can be raised through offerings exempt from registration under Regulation A.

Congress directed the Securities and Exchange Commission (SEC) to adopt a rule implementing this JOBS Act provision. The SEC’s proposed rule, contrary to Congressional intent, would broadly preempt state authority to review Regulation A offerings before they are sold to the public.

“While filers will not be able to take advantage of the increased $50 million offering amount until SEC rules are finalized, the states are ready to put our new review system to work under existing Regulation A to help small businesses access the capital they need to help provide jobs and grow our economy,” Seidt said. “It would be a shame if the SEC denied small businesses the opportunity to take advantage of a streamlined and efficient state process to raise capital at the higher threshold.”

For details about NASAA’s concerns regarding the SEC’s proposed Regulation A rule, visit NASAA’s Regulation A Resource Center.

–NASAA–

For More Information:
Bob Webster | Director of Communications
202-737-0900





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