States Call on SEC to Allow Small Businesses to Benefit from the Program by Removing Preemptive Language from Regulation A Proposed Rule

WASHINGTON, D.C. (March 11, 2014) – The North American Securities Administrators Association (NASAA) today announced that its members have voted to approve a streamlined multi-state review protocol to ease regulatory compliance costs on small companies attempting to raise capital under a provision of the Jumpstart Our Business Startups (JOBS) Act.

“This approval is an important first step toward creating a state-level filing and review program that eases regulatory hurdles for filers without sacrificing important investor protections,” said Andrea Seidt, NASAA President and Ohio Securities Commissioner. “We look forward to implementing this program so that Regulation A will be an attractive and efficient option both for small businesses that need capital and the investors asked to provide it.”

Under the new program, Regulation A filings would be made in one place and distributed electronically to all states. Lead examiners would be appointed 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.

The new program was initiated in response to Title IV of the JOBS Act, which raised to $50 million from $5 million the amount of money 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, seeks to transform Regulation A offerings into covered securities, which by law are not subject to state review. By doing so, the rule would eliminate state authority to review Regulation A offerings before they are sold to the public.

“State securities regulators have two core missions: protecting investors and helping small businesses access the capital they need to start their companies and grow much-needed jobs for the economy,” Seidt said. “We can’t fulfill either if the Commission prohibits our review as it proposes to do.”

For more information about NASAA’s coordinated review program and concerns about the SEC’s proposed Regulation A rule, visit NASAA’s Regulation A Resource Center.

NASAA is the oldest international organization devoted to investor protection. Its membership consists of the securities administrators in the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Canada and Mexico.


For More Information:
Bob Webster | Director of Communications


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