On September 5, 2017, the U.S. House of Representatives approved H.R. 2864 (Improving Access to Capital Act) by a vote of 403-3. The bill, which was sponsored by Rep. Krysten Sinema and previously amended by the Committee on House Financial Services on September 5, 2017, directs the SEC to amend Regulation A to permit Exchange Act reporting companies who otherwise meet all of the requirements under Regulation A to issue securities under Regulation A. Currently, Regulation A only applies to non-reporting companies. Allowing reporting companies to use Regulation A would provide them with a cheaper and faster way to raise capital due to the shorter SEC review process, and in the case of Tier 2 offerings, exemption from state blue sky review. The expansion of Regulation A to include reporting companies might also increase the quality of future Regulation A issuers, broaden the investor base for Regulation A offerings and ultimately enhance liquidity in the secondary market. In addition, the ability to use Regulation A could prove useful to reporting companies that do not qualify to use Form S-3 for primary offerings.
The full text of the bill can be found here.
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