Here’s an easy one. If you happened to notice the splash of news just before Christmas about the SEC’s proposed amendments to Regulation A (known as Regulation A+) and wondered whether any of it is relevant to mid-size public companies, the answer is no.
The proposed rules are mandated by the JOBS Act (see this Doug’s Note) and are designed to jump start the small company IPO market. Current Regulation A permits unregistered public offerings of up to $5 million of securities within a 12-month period, subject to SEC review and state-level registration, and requires burdensome formatting and content. As a result, it is rarely used.
The proposed souped-up Regulation A+ adds a second tier for offerings up to $50 million in a 12-month period, permits nonpublic prior submission of the offering statement to the SEC, permits pre-filing “testing the waters” and modernizes many of current Regulation A’s obsolete provisions. The SEC also proposed, to much rejoicing in the small company investment community, that Tier 2 offerings under Regulation A+ would be exempt from state blue sky laws.
From the perspective of mid-size public companies, this is a non-event since the Regulation A+ exemption is not available to companies that are already SEC reporting companies. Therefore, while this might make for interesting cocktail party conversation (depending on the type of parties you attend), it has no bearing on companies that are already public. You can cross it off your list of things to think about.