Monday, July 13, 2015

Washington Proposes Regulation A Tier 2 Notice Filing

By Jay Fishman, J.D.

Washington is the first state to propose a notice filing for Regulation A Tier 2 offerings, following the SEC’s adoption of Regulation A amendments on June 19, 2015.

Initial offering. Issuers would send the Securities Division the following items before making an initial offer in Washington: (1) a complete Regulation A – Tier 2 Offering Notice Filing Form or other document identifying the filing; (2) a Form U-2, Uniform Consent to Service of Process (if not provided on the notice filing form); and (3) a fee of $100 for the first $100,000 of initial issue (or portion of in Washington) based on the offering price, plus one-fortieth of 1 percent for any excess over $100,000 for the first 12-month period. The initial filing is effective for 12 months.

Renewal offering. Issuers continuing the same offering for an additional 12-month period could renew the unsold portion of their notice filing by submitting the following items on or before the current notice filing’s expiration: (1) a Regulation A – Tier 2 Offering Notice Filing Form marked “renewal” and/or a cover letter (or other document) requesting renewal; and (2) a fee of $100 for each additional 12 months in which the same offering is continued. Issuers increasing the amount of securities subject to the renewal notice filing would pay a fee to cover the increased amount of securities being offered.

Amended offering. Issuers could increase the amount of securities offered in Washington by submitting before the securities sale covered by the below fee: (1) a Regulation A – Tier 2 Offering Notice Filing Form or other document describing the transaction; and (2) a fee of one-fortieth of 1 percent of the desired increase based on the offering price.

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