New Regulation A - Effective June 19, 2015
The SEC has approved a new version of Regulation A, called Regulation A+, which goes into effect on June 19, 2015. The new Regulation A+ is intended to make it much simpler for "start-up" companies to raise smaller amounts of capital. The original Regulation A limit of $5 million has been raised to $20 million (called Tier 1 - basically the same as the old Regulation A limit adjusted for inflation); and a new Tier 2 has been added that allows companies to raise up to $50 million within 1 year under the rule. Tier 1 offerings do not require audited financial statements, while Tier 2 offerings require audited financial statements. These are registered offerings requiring a registration statement (Form S-1A) filed with the SEC. The issue goes through a 20 day "review period," however Regulation A does not impose "quiet period" requirements that other registered offerings have. The offering can be promoted and advertised before, during, and after the 20-day review period, allowing issuers to "test the waters" for investor demand.
We have updated our courses for new Regulation A. We do not expect it to show on the exams until September 2015. For a rule change such as this one, the questions covering the "old" rule are typically deleted from the test banks as of the effective date of the rule change and then revised questions covering the new rule are introduced at a later date.