The new Regulation A+ that became effective this summer represents an important and innovative SEC rule promoting hybrid private and public offerings that permit the flexibility of far less disclosure than was mandated before. Companies willing to cap their offerings at $50 million now need not undertake or be subject to the type of extensive public disclosure that previously was required for such offerings. In addition, many such offerings no longer need to navigate the labyrinth of state Blue Sky laws of multiple jurisdictions.
The incentive for access to capital for these types of offerings was established pursuant to Section 3(b) of the Securities Act of 1933. Regulation A+ implements Title IV of the Jumpstart Our Business Startups (JOBS) Act authorized on Dec. 18, 2013. According to Securities and Exchange Commission Chairperson Mary Jo White, “[T]hese new rules provide an effective, workable path to raising capital that also provides strong investor protections.”
