SEC Flash Report - January 2014
On December 18th, the SEC proposed rule amendments required by Title IV of the JOBS Act. The proposed rules are intended to increase access to capital for smaller companies. The SEC proposed amendments to Regulation A to establish a streamlined process by which a private company could offer and sell up to $50 million of securities in a twelve-month period if it complies with certain reporting requirements. Currently, Regulation A permits an exemption from the registration process for public offerings by private companies of up to $5 million of securities in a twelve-month period. The offering document need not include audited financial statements but is subject to SEC staff review, as well as state-level registration and qualification requirements. Very few offerings have been made pursuant to Regulation A. A U.S. Government Accountability Office study identifies the costs and complexity of state law compliance as one of the reasons for this.