Intrastate Crowdfunding Legislation Has Passed in Florida
Florida Has Passed Intrastate Crowdfunding Legislation
As the country waits for the SEC to publish final Title III crowdfunding rules as required by the JOBS Act, states continue to enact and introduce state-specific crowdfunding legislation. As of today, it is unclear when the final federal rules will be released and passed into law though SEC Chair Mary Jo White has publicly stated on several occasions that it will be this year. Upon passage of the final rules, there will be a period of ramping up time in which crowdfunding portals complete the process of registering with the SEC, becoming members of FINRA and completing the necessary steps to ensure that their portal operates in compliance with the final rules. Federal crowdfunding is coming, but it is a slow process.
Florida is the newest state to pass intrastate crowdfunding legislation. The new Florida Intrastate Crowdfunding Exemption takes effect October 1, 2015. As a Florida resident, I have a personal
SEC Issues Guidance On “Voting Power” For Purposes Of Bad Actor Rules
The SEC has published clarifying guidance and information on defining “voting equity securities” for purposes of the application of the bad actor rules under Rule 506 of Regulation D of the Securities Act of 1933, as amended (“Securities Act”). The clarifying language was contained within the SEC’s March 25, 2015 release of the final rules amending and adopting Regulation A+.
Rules 262 and 505 of the Securities Act disqualify the use of offerings under Regulation A and Rule 505 of Regulation D if an issuer, its predecessor, or an affiliate of the issuer is considered a “bad actor” as defined by such rules. In particular, the rules disqualify the issuer if the specified covered person is subject to certain administrative orders, industry bars, an injunction involving certain securities law violations or certain specified criminal convictions. “Covered persons” under the rules extends to the issuer, predecessor, affiliate, directors, officers, general partners, 20% or greater beneficial owners, promoters, underwriters, persons
More On Regulation A/A+; Thoughts On The Practical Effects And New SEC Guidance
On March 25, 2015, the SEC released final rules amending Regulation A. The new rules are commonly referred to as Regulation A+. The existing Tier I Regulation A, which does not preempt state law, has been increased to $20 million and the new Tier 2, which does preempt state law, allows a raise of up to $50 million. Issuers may elect to proceed under either Tier I or Tier 2 for offerings up to $20 million. The new rules went into effect on June 19, 2015.
On June 23, 2015, the SEC updated its Division of Corporation Finance Compliance and Disclosure Interpretations (C&DI) to provide guidance related to Regulation A/A+. The SEC published 11 new C&DI’s and deleted 2 related to forms and in particular, related to paper filings and annotations which are no longer relevant or applicable.
Practical Effects of New Regulation A/A+
I believe, and the feedback I hear supports, that new Regulation A+ will be widely
OTC Markets Amends Listing Standards For OTCQB To Include Regulation A+ Issuers
OTC Markets has unveiled changes to the quotations rule and standards for the OTCQB, which changes become effective July 10, 2015. The OTC Markets rule amendments will allow a company to use its required Regulation A+ ongoing reporting requirements to satisfy the initial and ongoing OTCQB disclosure requirements.
Concurrently with this substantive amendment, OTCQB has made clarifying general amendments to its listing standards for all listed and prospective OTCQB companies. OTC Markets has invited comments on the proposed changes.
To summarize, the Regulation A related amendment to the OTCQB rules and regulations includes:
- The addition of definitions for “Regulation A” and “Regulation A Reporting Company”
- Initial Disclosure Obligations – a Regulation A Reporting Company can meet the OTCQB initial disclosure obligations by having filed all required reports on EDGAR, including annual audited financial statements;
- OTCQB Certification – clarifying amendment to the OTCQB Certification including that a Regulation A Reporting Company is required to file periodic reports with the SEC under
