At the SEC Government-Business Forum on Small Business Capital Formation yesterday (November 17, 2016), David Feldman a securities attorney with Duane Morris, delivered a brief update on Regulation A+ as created by Title IV of the JOBS Act of 2012. This updated securities exemption became actionable in 2015. Since that time about $2 billion in filings have been accepted by the SEC and, correspondingly, 14 deals have closed raising $175 million.
Feldman, a staunch proponent of the exemption, described Reg A+ as “re-opening the door” for raising capital for smaller companies. Many industry participants have described Reg A+ as a “mini-IPO” type exemption. Feldman noted that the cost of doing a Reg A+ issuance is about half of a normal IPO.
Feldman also said that many issuers are looking towards listing shares on OTC Markets following an offer – Elio Motors being the first. He said that “FINRA was on board” and expects other exchanges will be participating in the emerging sector soon.
Regarding improvements for Reg A+, Feldman believes the following are on the top of his list:
- Allowing SEC reporting companies to utilize Reg A+
- Raising the amount of the exemption from $50 million to $100 million or more
- Blue sky preemption for resale of securities
- Shorter SEC review times for filings
- Allowing international companies (Canadian companies can use Reg A+)
Feldman’s presentation is below.