SEC adopts final rules to facilitate capital-raising by smaller companies

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The SEC approved the Final Rule, Amendments to Regulation A, mandated by Title IV of the JOBS Act, to exempt from registration under the Securities Act of 1933 offerings of securities of up to $50 million in a 12-month period. The exemption is limited to non-SEC reporting U.S. and Canadian companies that meet the required eligibility, disclosure and reporting requirements.

The Final Rule, often referred to as “Regulation A+,” provides for two tiers of offerings. Tier 1 includes offerings of up to $20 million, and Tier 2 includes offerings of up to $50 million, in a 12-month period. Offerings under new Regulation A will continue to require issuers under both tiers to file an offering statement with the SEC. Tier 2 issuers will also be subject to certain additional disclosure requirements, as well as continuing reporting obligations.

The Final Rule will become effective 60 days after publication in the Federal Register.