Rules previously adopted by the Securities and Exchange Commission to facilitate intrastate and regional securities offerings went into effect on April 20th. Specifically, revised Rule 147 and new Rule 147A became effective on this date.
The aforementioned rule changes were adopted to increase the utility of the existing rules and encourage capital formation by smaller companies with respect to Regulation Crowdfunding. For a complete list of the changes to Rule 147, see this previous blog post.
New Rule 147A, which was adopted under Section 28 of the Securities Act, provides an exemption to the stipulations in Rule 147 such that the definitions of an issuer’s place of business and rules governing their offerings across state lines are more relaxed. Issuers can make offers to out-of-state residents (via an unrestricted, publicly-available website) so long as the sales are limited to in-state residents. In addition, Rule 147A relies solely on an issuer’s principal place of business to determine an issuer’s residency. The adoption of Rule 147A is the biggest change concerning intrastate offerings as regulated by Rule 147.
Other rules with regard to intrastate offerings have already been implemented by the SEC, but some have yet to become effective. Novaworks will continue to keep you updated about the latest rule changes from the SEC and when they go into effect.
Sources
SEC Release No. 33-10238: Exemptions to Facilitate Intrastate and Regional Securities Offerings (www.sec.gov)
