There has been somewhat of a controversy surrounding the SEC’s rulemaking in connection with Regulation A+ under the JOBS Act. Should larger Tier 2 offerings preempt state blue sky regulation (my preference) or be subject to state blue sky regulation (the state regulators’ preference)? To make state regulation an easier pill to swallow, the North American Securities Administrators Association, or NASAA, previously announced that it adopted a streamlined multi-state review protocol to ease regulatory compliance costs on small companies attempting to raise capital under the JOBS Act.
The first and only issuer has apparently completed a NASAA Coordinated Review in connection with an existing offering under the existing, but rarely used, Regulation A. Following completion of the review, the issuer filed a comment letter with respect to the Regulation A+ rulemaking with the SEC.
Among other things, the issuer noted “the Coordinated Review program has created value by defining concrete service standards. For us, the value of receiving comments in a timely fashion outweighs the marginal costs of filing in multiple states. The legal certainty this affords is substantial, and does not exist in federal review. The uniform application of NASAA’s Statements of Policy has been very helpful, and we have been able to comply with these policies despite the presence of certain conditions within our company which pertain to these policies.”
Upon learning about the comment letter, members of the House Financial Services Committee, Maxine Waters (D-CA) and Stephen Lynch (D-MA), sent SEC Chair Mary Jo White a letter. The letter asks the SEC to study NASAA’s Coordinated Review program, and not undermine crucial investor protections by preempting the states’ regulators.
You can find the issuer’s comment letter and the letter to Chair White here.