Reg A and Reg D: Evolving Securities Exemptions for Private Offerings
Navigating Regulation A+, the FAST ACT, Rule 506 (c): Recent SEC Guidance
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Banking and Finance
- event Date
Tuesday, October 4, 2022
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE course will provide private equity and securities counsel with an update on the current status of Reg A and Reg D, the JOBS Act, the FAST Act, and accompanying SEC rules, including the most recent amendments to the definition of "accredited investor" and offering limits.
Mr. Ross focuses his practice on securities law, venture capital and private equity, and corporate governance. He has extensive experience advising as to SEC-registered and exempt capital markets transactions. Before founding Ross Law Group in 2013, he worked at Sidley Austin and Alston & Bird, as well as the Department of the Treasury, where he was part of the Troubled Asset Relief Program. Mr. Ross is the host of the American Bar Association podcast VC Law, and has served as an adjunct professor at Brooklyn Law School for the past five years.
Mr. Fallon, a former Senior Special Counsel at the SEC, represents clients navigating the intersection of federal securities laws and innovative financial technologies. He draws on extensive practical legal and regulatory experience to guide companies, investors, intermediaries, and other market participants on securities law compliance obligations and strategic considerations; cryptocurrency-related matters; financings, including smaller public offerings (e.g., Regulation A) and private venture capital and angel rounds; securities law defense in SEC and state agency investigations; emerging company issues; and general corporate matters. While at the SEC, Mr. Fallon served as Special Advisor to the SEC’s General Counsel, Attorney Advisor in the Office of the General Counsel’s General Litigation and Administrative Practice’s group, Senior Counsel in the Office of Small Business Policy in the Division of Corporation Finance, and later Senior Special Counsel to the Director of the Division of Corporation Finance. A recognized leader of the securities law bar, Mr. Fallon routinely works with and advises market participants on the implications of ongoing legislative and regulatory efforts in the financial technology sector. As part of these efforts, he frequently helps formulate policy and engages with policymakers on legislative and regulatory efforts, as well as presents as a thought leader on issues related securities laws and digital assets.
Over the last several years, Congress and the SEC created or expanded several exemptions from federal registrations of securities offerings. In November 2020 the SEC adopted revisions that establish a framework for issuers to move from one exemption to another and increase current offering and investment limits for certain private offerings. These changes provide new opportunities for capital raising for startups and small companies, without the expense of federal, and in some cases state, registration of securities offerings.
Regulation A+ exempts from registration a securities offering of up to $75 million to a broad base of accredited and unaccredited investors alike. It provides for two tiers of offerings: Tier 1 for offerings up to $20 million and Tier 2 for up to $75 million. Counsel should understand the reporting requirements and state law preemption associated with each.
The FAST Act codified the current practice of private resales of restricted securities, giving greater certainty of exemption to specific sellers under certain circumstances. But the issuer must comply with several conditions on accredited investors, the issuer, and class of securities sold to qualify for the exemption.
Rule 506(c) under Regulation D permits general solicitations to accredited investors, however, issuers must take reasonable steps to verify the accredited investor status of purchasers. The SEC's 2020 amendments to the definition of "accredited investor," which expand the category of investors eligible to participate in private offerings to include those that qualify based on certain professional certifications or credentials, irrespective of wealth.
Listen as our authoritative panel analyzes the current exemptions available under Regulations A and D and the conditions attached to each. The panel will also discuss SEC expansion of "accredited investor" and its impact on private offerings. Lastly, given increased interest in digital assets and cryptocurrencies, the panel will provide a high level overview of the state of regulation under the securities laws relating to such assets.
- Introduction to Reg A and Reg D exemptions
- Regulation A+
- Tier 1 and Tier 2
- State law preemption
- FAST Act and the private resale of securities: exemption requirements
- Rule 506(b) and 506(c): verifying "accredited investors"
- Recent SEC guidance
- Regulation A filing process and related guidance
- Integration of offerings with other exempt offerings
- Digital assets under securities laws
The panel will review these and other key issues:
- What are the different reporting obligations in Tier 1 and Tier 2 offerings under Reg A+?
- What are the conditions imposed under the FAST Act rules to allow for private resales without registration?
- How will the recent revisions to the accredited investor definition impact Reg D offerings?
- What are the latest digital asset and cryptocurrency-related developments?
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