SEC Proposes Rules to Relax Exempt Offerings and Integration of Offerings Rules

24th March 2020

On March 4, 2020, the SEC proposed a series of amendments to Securities Act of 1933, as amended. The proposed amendments include amendments to Regulation A+, Regulation Crowdfunding, Regulation S and Regulation D Rules 506(b), 506(c), and 504 and include several non-exclusive safe harbors from integration that would increase the ability of issuers to move from one exemption to another and would reduce the risk and uncertainty inherent with the integration of otherwise separate offerings. Currently, integration for securities offerings consists of both rules and guidance set forth by the SEC for determining whether multiple securities transactions should be considered part of the same offering. The proposed rules provide several generally-applicable safe harbors and include: (1) offerings separated by 30 days (reduced from six months) that satisfy general solicitation limitations would generally not be integrated with another offering; (2) registered offerings made pursuant to a registration statement filed after termination or completion of certain other offerings, including one terminated or completed more than 30 days before; and (3) exempt offerings using permitted general solicitation if made subsequent to any prior terminated or completed offering.

Click here for proposed Rule changes: https://www.sec.gov/rules/proposed/2020/33-10763.pdf