One of the principal goals of the Jumpstart Our Business Startups Act of 2012 (the JOBS Act) was to increase access to capital for smaller companies. To that end, the JOBS Act mandated the adoption of several measures for improving access to capital. These measures included the creation of a new initial public offering process for “emerging growth companies,” the removal of the prohibition against general solicitation for private placements under Regulation D, an exemption for crowdfunding transactions and an increase in the size of exempt offerings under Regulation A. The U.S. Securities and Exchange Commission previously adopted rules implementing the “emerging growth company” requirements of the JOBS Act and providing for the removal of the ban on general solicitation under Regulation D of the Securities Act of 1933, as amended. The SEC has also issued proposed rules to implement an exemption for crowdfunding transactions. Most recently, on March 25, the SEC adopted final rules amending Regulation A of the Securities Act.

The amendments to Regulation A, informally referred to as Regulation A+, expand the exemption from registration under Regulation A to cover larger offerings. Prior to the amendment, Regulation A only exempted offerings of up to $5 million by private, nonreporting companies. As a result of the low maximum offering amount, Regulation A offerings have been rare. Regulation A+ attempts to remedy Regulation A’s prior unattractiveness by increasing the maximum offering amount. This article summarizes the provisions of Regulation A+ and the framework for the new exemptions.

Expanded Offerings under Regulation A+

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