Senate Financial Reform Bill Could Affect Regulation D Offerings
By David Feldman at 15 March, 2010, 2:57 pm
Sen. Chris Dodd (D-CT) has just today introduced a version of his “Restoring American Financial Stability Act of 2010,” which now includes “Authority of State Regulators over Regulation D Offerings,” which would diminish the “covered security” preemption of 1933 Act Sec. 18(b)(4)(D). That preemption made many Reg. D offerings much easier. Some points of interest at Section 926 include:
- the SEC may designate certain Rule 506 offerings as not qualifying as “covered securities,” considering the size of the offering, the number of States in which the security is being offered, and the nature of the offerees;
- the SEC then needs to review filings made under Rule 506 within 120 days
- any filing which is not reviewed within the 120 day period would not be a covered security unless a state securities commissioner determines that (a) there’s been a good faith and reasonable attempt by the issuer to comply with all applicable terms, conditions and requirements of the filing, and (b) any failure to comply with such terms, conditions and requirements “are insignificant to the offering as a whole”;
- states may impose notice filing requirements “substantially similar to filing requirements required by rule or regulation under section 4(4) [citation is probably incorrect] that were in effect on September 1, 1996″
- the SEC is to notify States upon completion of its review of Rule 506 filings.
Following is a link to a PDF of Dodd’s new bill:
We’ll see where this thing goes. By the way I also don’t see any mention of the provision that was in the version that the House passed which permanently exempted smaller reporting companies from auditor attestation of the adequacy of internal finanical controls in Sarbanes-Oxley Section 404(b). It might be hidden in there somewhere, but a search for “404″ came up basically empty.
No comments yet.