Staff Guidance on EDGAR Filing of Form C Updated
May 13, 2021
In connection with the effectiveness of certain rule changes as set forth in Release No. 33-10884, the Division of Corporation Finance provides the following guidance with respect to the filing of Form C with the SEC.
The statements in this guidance represent the views of the Division of Corporation Finance. This guidance is not a rule, regulation or statement of the Securities and Exchange Commission. Further, the Commission has neither approved nor disapproved its content. This guidance, like all staff guidance, has no legal force or effect: it does not alter or amend applicable law, and it creates no new or additional obligations for any person.
EDGAR Filing of Form C for Regulation Crowdfunding Offerings Exceeding $1,070,000
Effective March 15, 2021, a company issuing securities in reliance on Regulation Crowdfunding is permitted under Rule 100(a)(1) to raise a maximum aggregate amount of $5 million in a 12-month period. Before the amendments, the limit was $1.07 million. As of the effective date of the amendments, the changes to the “Offering Information” section of the Cover Page of Form C to permit issuers to indicate an offering amount over $1.07 million had not yet been implemented on the eXtensible Markup Language (XML)-based fillable form available on EDGAR.
Effective May 10, 2021, the changes to the XML-based fillable form have been implemented and issuers are now able to, and must, provide accurate offering amounts in the XML-based fillable form and in the offering document attached as an exhibit to the Form C. An issuer that previously completed the offering amount fields by including $1,070,000 in the XML-based fillable form in reliance on prior staff guidance must update its Cover Page to provide the actual offering amounts if it files an amendment to the Form C after May 10, 2021.
EDGAR Filing of Form C by Crowdfunding Issuers and Crowdfunding Vehicles Jointly Filing a Form C
Beginning March 15, 2021, the use of certain special purpose vehicles (“crowdfunding vehicles”) is permitted in Regulation Crowdfunding. Investment Company Act Rule 3a-9 includes conditions for crowdfunding vehicles that are designed to ensure that the vehicle acts solely as a conduit for investments in a crowdfunding issuer. When a crowdfunding vehicle is used, the crowdfunding issuer and the crowdfunding vehicle are co-issuers under the Securities Act and both are required to comply with the requirements of Regulation Crowdfunding and other applicable securities laws.
For background on the use of crowdfunding vehicles, consult the adopting release at https://www.sec.gov/rules/final/2020/33-10884.pdf.
- Is a crowdfunding vehicle required to file its own Form C, separate from the Form C filed by the crowdfunding issuer?
Response: No. Under Regulation Crowdfunding Rule 203(a)(1), the crowdfunding issuer and crowdfunding vehicle are required to jointly file one Form C, providing all of the required Form C disclosure with respect to the offer and sale of the crowdfunding issuer’s securities to the crowdfunding vehicle and the offer and sale of the crowdfunding vehicle’s securities to investors.
However, if the crowdfunding issuer is offering securities both through a crowdfunding vehicle and directly to investors, Rule 203(a)(1) requires the crowdfunding issuer to file two Forms C: its own Form C covering the securities offered directly to investors, and a second Form C jointly with the crowdfunding vehicle for the securities offered through such vehicle.
- Does the crowdfunding vehicle need to have its own filer identification number (called a “Central Index Key” or “CIK” number) and EDGAR access codes?
Response: No. The jointly filed Form C will be filed under the crowdfunding issuer’s CIK. However, if the crowdfunding vehicle does have a CIK based on some other filing obligation, the crowdfunding vehicle should disclose the CIK as part of its co-issuer disclosure.
- What information about the crowdfunding vehicle is required to be provided in the XML-based portion of the Form C?
Response: The XML-based fillable portion of Form C includes the following fields to provide identifying information for the crowdfunding vehicle: name; legal status; jurisdiction of incorporation/organization; date of organization; physical address; and website. All other fields in the XML-based fillable portion of the form should be completed only with information about the crowdfunding issuer and the crowdfunding issuer’s securities.
The information required by Form C with respect to the crowdfunding vehicle and its securities should be provided in an exhibit to the Form C. Consistent with the information required with respect to the crowdfunding issuer and its securities, such information may be provided in the optional Question and Answer format included in Form C or in any other format included on the intermediary’s platform, including copies of screen shots of the relevant information, as appropriate and necessary. Information about both the crowdfunding issuer and the crowdfunding vehicle may be included in the same exhibit to the Form C.
- The crowdfunding vehicle and its principal executive officer or officers, its principal financial officer, its controller or principal accounting officer and at least a majority of the board of directors or persons performing similar functions are required to sign the Form C. How should those signatures be provided?
Response: The XML-based fillable portion of Form C only includes fields to provide certain identifying information for the crowdfunding vehicle. Therefore, the crowdfunding vehicle, as co-issuer, should provide the signatures required by Form C in a document filed as an exhibit to the Form C. The signatures should be conformed to the signature requirements of Rule 302 of Regulation S-T.
Examples of conformed signatures:
CHIEF FINANCIAL OFFICER