The North American Securities Administrators Association (NASAA) recently announced the launch of the online Electronic Filing Depository (EFD). The EFD is an online system that creates a streamlined process to enhance the efficiency of paying the filing fee and submitting a Form D filing for a Regulation D, Rule 506 offering to multiple state securities regulators at once.
To the extent that EFD filing is available and an issuer makes its own state blue-sky filings, the EFD is an effective and useful tool. It should be noted, however, that the EFD only allows for the filing of certain materials and paying the filing fee. Therefore, to the extent that specific states require additional information, an issuer will be required to provide that information to the state regulator outside of the EFD. Additionally, states must opt in to make an EFD filing permissible and currently it is not available in twelve states (Arizona, California, Connecticut, Delaware, Florida, Louisiana, Massachusetts, Michigan, Minnesota, New York, North Carolina and Oregon). Four states (New Jersey, New Mexico, Texas and Utah) are now mandating the use of EFD to submit Form D filings and other states have expressed their intentions to do the same.
Unless and until all states agree to permit the use of the EFD to submit a complete Form D filing, issuers may be forced to use two different methods to make Rule 506 notice filings.
Additionally, issuers should be aware that to utilize the EFD, the only way to pay the filing fee is via direct debit by EFD from the filer’s account. The NASAA is exploring allowing payment by credit card, but has not publicly announced an expected timeframe for that implementation.
For more information and a link to the EFD website please click here. For a link to the New Jersey orders or rules requiring the use of EFD, click here; for New Mexico click here; for Texas click here; and for Utah click here.