For offerings that require state securities registration and review, clients often are concerned about the merit regulation standards. Certain of NASAA’s Statements of Policy, for example, may pose significant issues. From time to time, commentators have requested that a review be undertaken of the following six policies: the Statement of Policy Regarding Promoter’s Equity Investment, the Promotional Shares Statement of Policy (a/k/a the “cheap stock” rule), the Statement of Policy Regarding Options and Warrants, the Statement of Policy Regarding Unequal Voting Rights, the Statement of Policy Regarding Specificity in Use of Proceeds, and the Statement of Policy Regarding Loans and Other Material Transactions.

Recently, in connection with the NASAA Coordinated Review approach for Regulation A offerings, the Corporation Finance Section has published a request for comment on four of these statements of policy. The comment period closes quickly on May 1, 2016.

The proposed revisions to the statements of policy may be found here: http://business.cch.com/srd/SOP-Revisions-Request-for-Public-Coments.pdf.