Yesterday the SEC adopted rules intended to facilitate intrastate and regional securities offerings. The SEC made general updates and modernized old Rule 147, the safe harbor exemption for intrastate securities offerings under Section 3(a)(11) of the Securities Act. The SEC also adopted a new exemption in Rule 147A, which differs from Rule 147 primarily in that it expressly permits general solicitation and does not require the issuer to be formed in the same state as its principal place of business and investors. This should allow Rule 147A to work more effectively with state-level crowdfunding exemptions. (We have previously blogged about the challenges of crowdfunding under Rule 147.)
The SEC also revised Rule 504 to increase the aggregate offering amount limitation from $1m to $5m and to add “bad actor” disqualifications (aligning it with recent updates to Rule 506). In addition, the SEC repealed the little used and now largely redundant to Rule 505.
These rules have various effective dates tied to publication of the rules in the Federal Register, which will likely occur next week:
- Revised Rule 147 – 150 days after publication in the Federal Register
- New Rule 147A – 150 days after publication in the Federal Register
- Revised Rule 504 – 60 days after publication in the Federal Register
- Repeal of Rule 505 – 180 days after publication in the Federal Register