Not unexpectedly, on February 19, 2014, the North American Securities Administrators Association sent a letter to the SEC objecting to the preemption of state authority over small corporate offerings by the SEC in its Regulation A+ Proposal and requesting a meeting with Chair White and the Corporate Finance leadership. The Proposal preempts state securities law review for Tier 2 Regulation A offerings (those up to $50 million) by defining a "qualified purchaser" as any offeree or purchaser in a Tier 2 offering. In the letter, NASAA stated:
We cannot do our job – protect investors or help small businesses access capital and grow their companies – where the Commission attempts to prohibit our review as contemplated in the Regulation A+ Proposal.
The letter highlighted NASAA's new coordinated, streamlined multi-state review program that appoints lead examiners to review Regulation A+ filings and that it believes will ease regulatory burdens for filers without sacrificing investor protection. NASAA also questioned whether the SEC's proposal to define "qualified purchaser" to include purchasers in a Regulation A+ offering is consistent with the public interest and the protection of investors standards of the National Securities Markets Improvements Act of 1996. NASAA also said:
There is no doubt in our minds that the Commission and the states, standing together, will be much more effective in protecting our citizens and making Regulation A+ a success for small business filers than we could ever hope to be standing apart.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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