Reg A and Reg D: Evolving Securities Exemptions for Private Offerings, New Accredited Investor Definition

Navigating Regulation A+, the FAST ACT, Rule 506 (c): Recent SEC Guidance

Recording of a 90-minute premium CLE webinar with Q&A

Conducted on Wednesday, December 2, 2020

Recorded event now available

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Program Materials

This CLE webinar will provide private equity and securities counsel with an update on the current status of Reg A and Reg D, the JOBS Act, the FAST Act, and accompanying SEC rules, including the most recent amendments to the definition of "accredited investor" and offering limits.

Description

Over the last several years, Congress and the SEC created or expanded several exemptions from federal registrations of securities offerings. Most recently, on November 2, 2020 the SEC voted to adopt revisions which establish a framework for issuers to move from one exemption to another and increase current offering and investment limits for certain private offerings. These changes provide new opportunities for capital raising for private equity funds and their portfolio companies, without the expense of federal, and in some cases state, registration of securities offerings.

Regulation A+ exempts from registration a securities offering of up to $75 million to a broad base of accredited and unaccredited investors alike. It provides for two tiers of offerings: Tier 1 for offerings up to $20 million and Tier 2 for up to $75 million. Counsel should understand the reporting requirements and state law preemption associated with each.

The FAST Act codified the current practice of private resales by affiliates of issuers without registration, giving greater certainty of exemption to specific sellers. But the issuer must comply with several conditions on accredited investors, the issuer, and class of securities sold to qualify for the exemption.

Rule 506(c) under Regulation D permits general solicitations to accredited investors, however, issuers must confirm accredited investor status. The SEC recently adopted amendments to the definition of "accredited investor," which expand the category of investors eligible to participate in private offerings to include those that qualify based on certain professional certifications or credentials, irrespective of wealth.

Listen as our authoritative panel analyzes the current exemptions available under Regulations A and D and the conditions attached to each. The panel will also discuss recent SEC expansion of "accredited investor" and its impact on private offerings, as well as proposed rules and legislation which are likely to affect these offering exemptions going forward.

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Outline

  1. Introduction to Reg A and Reg D exemptions
  2. Regulation A+
    1. Tier 1 and Tier 2
    2. State law preemption
  3. FAST Act and the private resale of securities: exemption requirements
  4. Rule 506(b) and 506 (c): different approaches to verifying "accredited investors"
  5. Recent SEC compliance and disclosure interpretations
    1. Regulation A: post-qualification amendments, calculation of the change in price in an offering, required financial statements
    2. Regulation D: integration of 506(b) into 506(c) offering for purposes of accredited investor verification

Benefits

The panel will review these and other key issues:

  • What are the different reporting obligations in Tier 1 and Tier 2 offerings under Reg A+?
  • What are the conditions imposed under the FAST Act rules to allow for private resales without registration?
  • How will the recent revisions to the accredited investor definition impact Reg D offerings?

Faculty

Flint, Hannah
Hannah Flint
Attorney
Hunton Andrews Kurth

Ms. Flint’s practice focuses on securities law compliance, corporate governance, securities offerings and mergers...  |  Read More

Kimpel, Scott
Scott H. Kimpel
Partner
Hunton Andrews Kurth

Mr. Kimpel regularly advises clients across a broad sector of the economy facing sensitive reporting, compliance and...  |  Read More

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