On May 24, President Trump signed into law the Economic Growth, Regulatory Relief and Consumer Protection Act. While the Act primarily serves to relieve smaller financial institutions from the burden of complying with certain requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Act also directs the Securities and Exchange Commission to adopt amendments to Rule 701 under the Securities Act of 1933 (Securities Act) and so-called “Regulation A+,” as summarized below.  
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The Securities and Exchange Commission’s Division of Corporation Finance recently issued new compliance and disclosure interpretations (C&DIs) related to so-called “Regulation A+” and Regulation Crowdfunding promulgated under the Jumpstart Our Business Startups (JOBS) Act. The C&DIs pertaining to Regulation Crowdfunding were issued on the same day as the SEC’s announcement of the adoption of technical amendments to the JOBS Act Rules, including amendments to increase the amount of money companies can raise through crowdfunding (as discussed in the April 7 edition of Corporate & Financial Weekly Digest).
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On June 23, the Securities and Exchange Commission’s Division of Corporation Finance issued new Compliance and Disclosure Interpretations (C&DIs) relating to the recently expanded Regulation A, commonly referred to as “Regulation A+”. Regulation A+, which was promulgated under the Jumpstart Our Business Startups Act (JOBS Act), permits eligible issuers to offer up to $50 million of their securities within any 12-month period in quasi-public offerings. As noted in the June 19 edition of the Corporate & Financial Weekly Digest, Regulation A+ became effective on June 19.
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On June 16, the Securities and Exchange Commission denied a motion, filed by Monica J. Lindeen, Montana State Auditor, ex officio Commissioner of Securities and Insurance, which sought to stay the effectiveness of new “Regulation A+” (which became effective today, June 19). As noted in the June 5 edition of Corporate & Financial Weekly Digest, Ms. Lindeen, in her capacity as the Montana State Auditor and Commissioner of Securities and Insurance, previously filed a lawsuit with the Federal Court of Appeals for the District of Columbia (DC Circuit), which seeks to enjoin the effectiveness of Regulation A+ on the basis that Regulation A+ exceeded the SEC’s congressional mandate by pre-empting state “blue sky” review of Tier 2 offerings under Regulation A+. The lawsuit is currently pending.
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On May 27, the Federal Court of Appeals for the District of Columbia combined lawsuits filed by the commonwealth of Massachusetts and the state of Montana against the Securities and Exchange Commission. The lawsuits seek to enjoin the implementation of new Regulation A+ prior to its June 19 effective date. Both Montana and Massachusetts contend that Regulation A+ exceeded the SEC’s congressional mandate by pre-empting state “blue sky” review of Tier 2 offerings under Regulation A+.
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On March 25, the Securities and Exchange Commission adopted final rules that will expand the exemption from registration under the Securities Act of 1933 provided by Regulation A to include an exemption for up to $50 million of securities sold during a 12-month period in accordance with the new rules. This new exemption, which is often referred to as Regulation A+, implements Section 401 of The Jumpstart Our Business Startups Act (JOBS Act) (adding Section 3(b)(2) of the Securities Act), which required the SEC to adopt rules that would have the effect of updating and expanding Regulation A. The final rules address a number of comments received by the SEC in response to its December 2013 proposal, which was discussed in a prior edition of Corporate and Financial Weekly Digest.
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