President Trump signed the Economic Growth, Regulatory Relief and Consumer Protection Act into law on May 24, 2018. He remarked that this bill had reforms that “are critical to helping all Americans thrive and to prosper.” The bill was first introduced by Senator Mike Crapo (R-ID). The bill contains six titles relating to: consumer access to mortgage credit, regulatory relief, protections for veterans, consumers and homeowners, regulations affecting certain bank holding companies, capital formation, and student borrower protections. The SEC will now add amendments to the existing Regulation A+ rules.
Section 508 of the act had several provisions specifically affecting Regulation A+. Under the new regulations, issuers who are subject to section 13 or 15(d) of the Securities Exchange Actbefore the offering (15 U.S.C. 78a et seq.) are still able to use Reg A+. Previously the SEC required that issuers not be subject these requirements in order to rely on Reg A+, which now enables fully reporting companies to use Reg A+ to raise capital.
What is a reporting company?
A reporting company is any issuer or public company with a class of securities that has been registered under Section 12 or is subject to Section 13 or 15(d) of the Exchange Act. Issuers become subject to the Exchange Act if:
They list securities on any national securities exchange (NASDAQ, NYSE, etc.). When issuers complete IPO’s they typically will list their securities on a national securities exchange
Issuers are required to register under Section 12(g) if their assets exceed $10 million and their securities are held by either 2,000 persons or 500 persons who are not accredited investors
If an issuer completes an IPO and files a registration statement, even without a national securities exchange listing
Previously Reg A+ was beneficial to smaller companies as it helped them gain larger access to capital, and offerings under Tier II were largely exempt from state security regulations. However, with the passage of the Economic Growth Act, public companies are able to rely on the regulation to raise capital as well.
Issuers conducting Tier II offerings under Reg A+ must use a transfer agent, pursuant to SEC regulations. As a registered SEC transfer agent who has been in business for over 30 years, Colonial can help with any of your Reg A+ transfer agent needs.