The Securities and Exchange Commission (“SEC”) has adopted rule amendments that will require Form D to be filed electronically using the SEC’s EDGAR System beginning on March 16, 2009. The amendments also require new information to be included on the new Form D and clarify when amendments to a previously filed Form D are required.
A Form D is filed by issuers issuing securities relying on a Regulation D safe harbor exemption from the registration requirements of the Securities Act of 1933, as amended. A Form D must be filed within fifteen days after the first sale of securities in an unregistered offering under Regulation D.
Electronic Filing Requirement
Under the amended rules, issuers have had the option to voluntarily submit Form D electronically since September 15, 2008, and will be required to do so after March 16, 2009. In order to file electronically, issuers will need to obtain EDGAR access codes. For issuers that presently do not have EDGAR access codes and anticipate filing a Form D in the near future, it is advisable to apply for EDGAR access codes in advance to allow for sufficient processing time before the March 16th deadline. Electronically filed Form D’s will be searchable by the public on the SEC’s website in the same manner as other public filings, such as periodic reports.
Information Required on New Form D
A new Form D has also been adopted by the SEC and, after March 16, 2009, only the new Form D will be accepted. Much of the same information required on the current paper Form D is also required on the new Form D, but some information requirements have been added or modified. Some of the new or modified information requirements include:
- Reporting the date of first sale in the offering, which is defined as the date on which the first investor is irrevocably contractually committed to invest;
- Reporting whether the offering is expected to last more than a year;
- Deleting the current requirement to identify as “related persons” owners of 10 percent or more of a class of the issuer’s equity securities;
- Replacing the current requirement to provide a business description of the issuer with a requirement to classify the issuer by industry from a preestablished industry list;
- Reporting revenue range information for the issuer, or net asset value range information in the case of hedge funds (subject to an option to decline to disclose);
- Reporting more specific information on the registration exemption claimed by the issuer and information on any exclusion claimed under the Investment Company Act of 1940; and
- Requiring CRD (a broker/dealer Central Registration Depository) numbers for both individual recipients of sales compensation and associated broker/dealers.
The new Form D also permits filers to identify all issuers in a multiple-issuer offering on one Form D.
Mandatory Amendment of Previously Filed Form D
The amended rules set forth instructions about how and when amendments to a previously filed Form D must be filed, which were not addressed in the current form. After an initial Form D has been filed it should be updated annually, on or before the first anniversary of the initial filing, for offerings lasting more than one year. Additionally, amendments are required to (i) correct a material mistake of fact or error in a previously filed Form D (as soon as practicable after discovery of the mistake or error), and (ii) to reflect a change in the information provided in a previously filed Form D (as soon as practicable after the change), but an amendment is not necessary in connection with a change that occurs after the offering terminates or if the change relates to certain preestablished types of information.
After March 16, 2009, all amendments to a Form D will also need to be filed electronically, regardless of the method by which the original Form D was filed.
State Securities Laws
The SEC and the North American Securities Administrators Association are coordinating efforts to make the new electronically filed Form D a “one-stop filing” to satisfy both the federal and state requirements. However, until such a system is in place, issuers must continue to make manual filings in the states where they are required.