On October 2, the Securities and Exchange Commission’s Division of Corporation Finance issued a new Compliance and Disclosure Interpretation (C&DI) regarding whether an issuer of securities may use its own website or social media to offer securities in a manner consistent with Rule 147 under the Securities Act of 1933 (Securities Act). Rule 147 provides objective standards for satisfying the exemption from registration provided by Section 3(a)(11) under the Securities Act (which generally exempts from registration securities offered and sold by an issuer if the transaction is wholly intrastate, meaning the issuer and all the offerees/purchasers are residents of the same state).
C&DI 141.05 provides that issuers may use their websites or social media to offer securities in accordance with Rule 147 by taking specified precautions. For example, an issuer could “implement technological measures” such that communications that constitute offers are only made to those persons whose IP addresses originate from the issuer’s state of residence (and prevent offers to persons whose IP addresses originate in other states). C&DI 141.05 further clarifies that, in any event, any offer should include a disclaimer and restrictive legend “making it clear that the offering is limited to residents” of the same state as the issuer.