Today, Corp Fin posted a number of new CDIs that reflect updates for the amendments to Rule 147 (intrastate offers and sales) and Reg D Rules 503 and 504, and withdrew some CDIs in light of the repeal of Rule 505. There are also a number of changes throughout the CDIs interpreting Rule 147 and Reg D that Corp Fin describes as non-substantive based on current rules, such as changes to correct outdated references. The CDIs with these non-substantive changes are identified in the CDIs only by an asterisk and have not been updated to reflect a September 2017 date. Corp Fin has also removed the Reg D CDIs “that do not directly relate to the Commission’s current rules.” The CDIs identified as having substantive changes are summarized below, along with three new CDIs related to Reg A that were posted last week.

Rule 147 — Intrastate offers and sales

541.03 Where a family trust that is not deemed to be a separate legal entity has two trustees, but only one of the trustees resides in the state of the Rule 147 offering, the issuer may offer and sell securities to the trust in the offering under Rule 147 so long as one of the trustees resides in the state of the Rule 147 offering. See Securities Act Release No. 33-10238.

Rules 503 and 503T– Filing of Notice of Sales

257.08 In a Rule 506 offering, failure to file a Form D with the SEC does not preclude status as a “covered security” under Section 18 because filing of a Form D is not a condition of qualification for the Rule 506 exemption. Among the types of securities that fall within the definition of “covered security” under Section 18 are securities with respect to transactions exempt under rules promulgated under Section 4(a)(2) of the Securities Act, including Rule 506(b). In addition, Congress determined in the JOBS Act that Rule 506(c) would be treated as a regulation issued under Section 4(a)(2).

Rule 504 — Exemption for Limited Offerings and Sales of Securities Not Exceeding $5,000,000

258.03 Offerings under Rule 504 may be public or non-public depending on the provision of the Rule that is relied upon for the offering. A private fund that is excluded from the definition of “investment company” under Section 3(c)(1) or (7) of the Investment Company Act can rely on Rule 504 to make an exempt non-public offering; however, a private fund that makes a “public offering” of its securities would no longer be able to rely on the Section 3(c)(1) or (7) exclusions from the definition of “investment company” and, therefore, would be required to register as an “investment company” under Section 3 of the Investment Company Act (unless another exclusion or exemption were available). As an “investment company” under Section 3, the fund would be precluded from using the Rule 504 exemption. See e.g., footnote 241 in Securities Act Release No. 33-10238 Note that, in contrast, Section 201(b)(2) of the JOBS Act provides that offerings exempt under Rule 506(c) are not deemed to be “public offerings.”

258.05 The example of the calculation of the aggregate offering price set forth in the Instruction to paragraph (b)(2) of Rule 504 is intended to demonstrate the operation of the limitation on the aggregate offering price, but does not contemplate integration of the offerings described.

258.06 Beginning on January 20, 2017, Rule 504 is not available to any issuer that is subject to “bad actor” disqualification under Rule 506(d). As a result, on and after that date, issuers are required to determine if they are subject to bad actor disqualification any time they are offering or selling securities in reliance on Rule 504. See Rule 504(b)(3), Rule 506(d) and the additional CDIs interpreting Rule 506(d).

Recently, Corp Fin also issued a few new CDIs in connection with Reg A.

Rules 251 to 263

182.21 When a Reg A issuer registers a class of its securities under the Exchange Act on a Form 8‑A (which must be concurrent–or within 5 days after–the qualification of a Form 1-A Offering Statement or the qualification of a post-qualification amendment to a Form 1-A), the financial statements in the Form 1-A or post-qualification amendment must be current at the time it is qualified. As stated in the Reg A adopting release, the purpose of the time limitation on Form 8-A in this circumstance was to help ensure that the disclosures in the Form 1‑A, including financial statements, were generally current at the time of effectiveness of the Exchange Act registration.

182.22 When a Reg A issuer registers on Form 8-A concurrently with the qualification of a Form 1-A, and the qualified Form 1‑A did not contain financial statements for the last full fiscal year preceding the fiscal year of effectiveness of the Form 8-A, the staff will allow the issuer to file its first Form 10‑K for the preceding fiscal year within 90 calendar days after the effectiveness of the Form 8‑A: “For example, the staff would not object if a calendar year‑end issuer that qualifies a Form 1‑A on March 30, 2018 and registers a class of securities pursuant to the Exchange Act on April 4, 2018 files its first annual report on Form 10-K within 90 calendar days after effectiveness of the Form 8‑A.”

182.23 Rule 13a-13 provides that an issuer’s first Form 10-Q must be filed either by its regular due date or, if later, within 45 days after the effective date of the registration statement. Where a Reg A issuer registers on Form 8-A concurrently with the qualification of a Form 1-A, and the qualified Form 1‑A did not contain financial statements for one or more quarterly periods (after the most recent annual or semiannual period for which financial statements were included in the Form 1-A ) that were completed prior to effectiveness of the Form 8-A, the staff will not object if the issuer files one or more Forms 10-Q for the completed quarterly periods that were not included in the Form 1‑A within 45 days after effectiveness of the Form 8-A. The CDI includes the following example:

“a calendar year-end issuer registers a class of securities pursuant to the Exchange Act on August 10, 2018, concurrent with the qualification of a Form 1‑A that includes financial statements for the fiscal year ended December 31, 2017, but no financial statements for the two most recently completed quarterly periods in 2018. The staff would not object if that issuer files its Forms 10‑Q for the first and second fiscal quarters of 2018 on or before September 24, 2018. Unlike the Regulation A issuer, a calendar year‑end issuer that registers a class of securities pursuant to the Exchange Act on August 10, 2018, concurrent with the effectiveness of a Form S‑1, would have been required to include financial statements for the first fiscal quarter of 2018 in its registration statement and would be required to file its Form 10‑Q for its second fiscal quarter on or before September 24, 2018.”