How Did the JOBS Act Change Form D? Going Public

Securities Lawyer 101 Blog

On July 10, 2013, the SEC adopted final rules as required by Title II of the JOBS Act, which directed the SEC to eliminate the ban on general solicitation and advertising for certain offerings conducted under Rule 506 of Regulation D, of the Securities Act of 1933, as amended (the “Securities Act”) provided the securities are sold only to accredited investors.

In connection with these amendments to Rule 506, the SEC approved amendments to Form D, adding a box check box requiring issuers to disclose if they are relying on Rule 506(c).  As discussed below, the SEC also proposed significant amendments to Form D’s requirements that include penalties for non-compliance.

Failure to Comply With Form D’s Filing Requirement 

In the past, issuers were strongly encouraged to file Forms D in connection with Regulation D offerings, but no penalties were prescribed for those that failed to do so.  The proposed rules would disqualify issuers that neglect to file the form from using Rule 506 exemption in any new offering for a period of one year after the date that the required Form D filings are omitted.

Prefiling of Form D

The SEC also proposes that issuers using general solicitation and advertising in Rule 506 offerings be required to file an advance notice of sale 15 days before the offering is opened, and a final notice within 30 days after completion of the offering. Presently, issuers relying upon Rule 506 offerings are required to file a notice of sales on Form D no later than 15 calendar days after the first sale of securities.

Informational Proposals

The SEC’s proposals require issuers to provide additional information in their Form D filing than before, including:

● identification of issuer’s website;
● expanded information about the issuer;
● securities offered;
● types of investors in the offering;
● use of proceeds from the offering;
● information on types of general solicitation used; and
● methods used to verify accredited investor status of investors.

For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com.   This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. For more information about going public and the rules and regulations affecting the use of Rule 144, Form 8K, crowdfunding, FINRA Rule 6490, Rule 506 private placement offerings and memorandums, Regulation A, Rule 504 offerings, SEC reporting requirements, SEC registration statements on Form S-1 , IPO’s, OTC Pink Sheet listings, Form 10 OTCBB and OTC Markets disclosure requirements, DTC Chills, Global Locks, reverse mergers, public shells, direct public offerings and direct public offerings please contact Hamilton and Associates at (561) 416-8956 or [email protected]. Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com