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SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 230, 232 and 239
[Release No. 33-7373]
Revisions to Forms SB-1, SB-2, Regulation A and Regulation S-T
with regard to the appropriate place for filing for registrants
in the regions covered by the Northeast, Southeast, Midwest,
Central and Pacific Regional Offices.
AGENCY: Securities and Exchange Commission.
ACTION: Final Rules.
SUMMARY: The Securities and Exchange Commission ("Commission")
is amending Forms SB-1, SB-2, and Regulation A to provide that
registrants may no longer file their Forms SB-1 and SB-2
registration statements and Regulation A materials in the
Commission's Regional Offices given recently implemented changes
to its filing processing programs. All such documents must be
filed at the Commission's Headquarters in Washington, D.C.
Regulation S-T, the electronic filing regulation of the
Commission, also is being amended to reflect this change.
EFFECTIVE DATES: The rule revisions are effective [Insert date
30 days after publication in the Federal Register], except that
the amendment to 232.101(c) is effective May 5, 1997.
FOR FURTHER INFORMATION CONTACT: Barbara C. Jacobs or James R.
Budge, (202) 942-2950, Office of Small Business Review, Division
of Corporation Finance, Securities and Exchange Commission, 450
Fifth Street, N.W., Mail Stop 7-8, Washington, D.C. 20549.
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SUPPLEMENTARY INFORMATION: The Commission is adopting amendments
to the following forms and rules: Form SB-1-[1]-, Form SB-
2,-[2]- Rule 252,-[3]- Rule 254,-[4]- Rule
255,-[5]- Rule 256,-[6]- Rule 257,-[7]-, Rule
259,-[8]- Form 1-A,-[9]- and Form 2-A-[10]- under
Regulation A.-[11]- Rule 101(c) of Regulation S-
T-[12]- also is being amended to reflect these revisions.
The purpose of these amendments is to reflect the fact that the
Regional Offices of the Commission will no longer review small
business issuer registration forms and Regulation A material.
---------FOOTNOTES--------
-[1]- 17 CFR 239.9.
-[2]- 17 CFR 239.10.
-[3]- 17 CFR 230.252.
-[4]- 17 CFR 230.254.
-[5]- 17 CFR 230.255.
-[6]- 17 CFR 230.256.
-[7]- 17 CFR 230.257.
-[8]- 17 CFR 230.259.
-[9]- 17 CFR 239.90.
-[10]- 17 CFR 239.91.
-[11]- 17 CFR 230.251 et seq.
-[12]- 17 CFR 232.101(c).
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I. AMENDMENTS
Forms SB-1-[13]- and SB-2-[14]- are special
registration statement forms for the use of small business
issuers-[15]- to register their securities for sale under
the Securities Act of 1933.-[16]- Forms SB-1 and SB-2
provide that a registration statement on the Form relating to an
initial public offering may be filed either at the Commission's
Headquarters in Washington, D.C., or in certain Regional or
District Offices for the region closest to the registrant's
principal place of business. Regulation A provides an exemption
from the registration requirements of the Securities Act for any
offering made in accordance with the conditions of that
exemption.-[17]- Regulation A requires that an offering
---------FOOTNOTES----------
-[13]- This form is available to a small business issuer
to raise up to $10 million in a 12 month period,
under certain conditions.
-[14]- The form is available to any small business issuer
to raise any dollar amount of funds in cash. It
may be used for repeat offerings as long as the
definition of small business issuer is applicable.
-[15]- A small business issuer is a United States or
Canadian company that has not had more than $25
million in revenues during its most recent fiscal
year provided that the aggregate market value for
its outstanding securities held by non-
affiliates does not exceed $25 million. See
Securities Act Rule 405 [17 CFR 230.405] and Rule
12b-2 [17 CFR 240.12b-2] under the Securities
Exchange Act of 1934 ("Exchange Act") [15 U.S.C.
78a et seq.].
-[16]- 15 U.S.C. 77a et seq.
-[17]- 17 CFR 230.251-.263.
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statement, which contains specified information, be filed either
at the Commission's Headquarters in Washington, D.C. or with
certain Regional or District Offices for the region in which the
issuer's principal business operations are conducted or proposed
to be conducted.-[18]-
On October 9, 1996, the Commission announced that its
Regional Offices will no longer review small business issuer
registration forms and Regulation A filings made in those Offices
as of October 15, 1996.-[19]- Rather, filings made in the
Regional Offices would be accepted and forwarded promptly for
review to the special new Headquarters unit that specializes in
small company filings and the needs of small businesses.
II. PURPOSE OF CHANGES AND EFFECTIVE DATES
The purpose of today's amendments is to require Forms SB-1
and SB-2 relating to initial public offerings and Regulation A
material that previously could have been made at the Regional
Offices to be filed directly at the Commission's Headquarters in
Washington, D.C. On and after the effective date of the rule
revisions, new filings on Forms SB-1 and SB-2, as well as
Regulation A material, will not be accepted in any of the
Commission's Regional or District Offices. Filings pending in
the Northeast, Midwest, Central and Pacific Regional Offices, as
well as the Atlanta District Office, before the effective date of
---------FOOTNOTES----------
-[18]- Securities Act Rule 252.
-[19]- See SEC Press Release No. 96-123 (October 9,
1996).
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these rules will continue to be processed there until
effectiveness, withdrawal or abandonment unless staffing
requirements necessitate transfer to the Commission's
Headquarters. Post-effective and post-qualification amendments
relating to documents previously filed in the Regional or
District Offices should be filed at the Commission's Headquarters
in Washington, D.C.
Rule 101(c)(7) of Regulation S-T-[20]- is being
revised to reflect the elimination of filing with the Regional or
District Offices of the Commission. Consequently, all Forms SB-1
and SB-2 will be required to be filed via the Commission's
Electronic Data Gathering, Analysis and Retrieval system
("EDGAR") rather than in paper (as was previously allowed for
Regional Office filings).-[21]- In order to allow small
businesses time to prepare for this change, until May 5, 1997
filing via EDGAR of Forms SB-1 and SB-2 relating to initial
public offerings only may be made in paper at the Commission's
Headquarters. On or after May 5, 1997, these filings must be
made via EDGAR absent a hardship exemption.-[22]-
---------FOOTNOTES----------
-[20]- 17 CFR 232.101(c)(7).
-[21]- Since mandated electronic filing commenced in
April 1993, small business issuers have been
required to file small business registration
statement forms via EDGAR if the registrant was
subject to electronic filing and chose to file at
Headquarters.
-[22]- For further information regarding hardship
exemptions, see Rule 202 of Regulation S-T [17 CFR
(continued...)
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Regulation A filings will continue to be filed in paper pursuant
to Rule 101(c) of Regulation S-T.-[23]-
The action being taken today is an important feature of a
Commission initiative to improve generally the regulatory
conditions for small business. As noted, the Commission has
created a special new Headquarters unit that specializes in small
company filings and the needs of small businesses. The
Commission also has appointed a special ombudsman to serve as a
liaison and agency spokesman for the concerns of small business.
Regional liaisons for small companies have been appointed in each
of the Commission's Regional Offices so that a Commission staff
member is always available locally for entrepreneurs to contact.
Six small business town hall meetings between the Commission and
small businesses have been held across the country, and will
continue to be held, to convey basic information to small
businesses about some of the fundamental requirements that must
---------FOOTNOTES----------
-[22]-(...continued)
232.202].
Prior to May 5, 1997, registrants may file these
registration statements electronically. Reports filed with
the Commission pursuant to Section 13(a) or 15(d) of the
Exchange Act [15 U.S.C. 79m(a) and 79o(d)] must be filed
electronically. See Rule 101(a) of Regulation S-T [17 CFR
232.101(a)].
-[23]- Current Rule 101(c)(8) of Regulation S-T [17 CFR
232.101(c)(8)]. Under the amendments being
adopted today, (c)(7), which prohibits the filing
of Regional and District filings via EDGAR, will
be removed and the succeeding paragraphs will be
renumbered so that Rule 101(c)(8), which pertains
to Regulation A filings, will become Rule
101(c)(7) of Regulation S-T.
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be addressed when they wish to raise capital through the sale of
securities. In addition, the Commission is learning more about
the concerns and problems facing small businesses in raising
capital so that programs can be designed to meet their needs,
consistent with the protection of investors. The Commission also
maintains a special selection of relevant information on its
World Wide Web site targeted to the interests of and to assist
small businesses (http://www.sec.gov).
The rule changes are generally effective [Insert date 30
days after publication in the Federal Register]. The change to
Regulation S-T, however, is effective May 5, 1997.
The Commission finds in accordance with Section 553(b) of
the Administrative Procedure Act ("APA")-[24]- that this
action relates solely to agency organization, procedure or
practice and that such section makes unnecessary the notice and
prior publication required by that Act. It follows that the
Regulatory Flexibility Act is inapplicable. Under 5 U.S.C. 804,
this rule is exempt from the definition of the term "rule" for
purposes of Chapter 8, entitled "Congressional Review of Agency
Rulemaking," since the rule is a rule of "agency organization,
procedure, or practice that does not substantially affect the
rights or obligations of non-agency parties."
III. STATUTORY BASIS
The amendments to the Commission's rules and forms are being
made pursuant to Section 19(a) of the Securities Act.
---------FOOTNOTES----------
-[24]- 5 U.S.C. 553(b).
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List of Subjects in 17 CFR Parts 230, 232 and 239
Reporting and recordkeeping, Securities.
TEXT OF THE AMENDMENTS
In accordance with the foregoing, Title 17, Chapter II of
the Code of Federal Regulations is amended as follows:
PART 230 -- GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933
1. The authority citation for part 230 continues to read
in part as follows:
Authority: 15 U.S.C. 77b, 77f, 77g, 77h, 77j, 77s, 77sss,
78c, 78d, 78l, 78m, 78n, 78o, 78w, 78ll(d), 79t, 80a-8, 80a-29,
80a-30, and 80a-37, unless otherwise noted.
* * * * *
2. By amending 230.252 by revising paragraph (e) and the
second sentence of paragraph (h)(1) to read as follows:
230.252 Offering statement.
* * * * *
(e) Number of copies and where to file. Seven copies of
the offering statement, at least one of which is manually signed,
shall be filed with the Commission's main office in Washington,
D.C.
* * * * *
(h) Amendments.
(1) * * * Seven copies of every amendment shall be filed
with the Commission's main office in Washington, D.C. * * *
* * * * *
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3. By amending 230.254 by revising the first sentence of
paragraph (b)(1) to read as follows:
230.254 Solicitation of interest document for use prior to an
offering statement.
* * * * *
(b) * * *
(1) On or before the date of its first use, the issuer
shall submit a copy of any written document or the script of any
broadcast with the Commission's main office in Washington, D.C.
(Attention: Office of Small Business Review). * * *
* * * * *
4. By amending 230.255 by revising the first sentence
after paragraph (a)(1) to read as follows:
230.255 Preliminary offering circulars.
(a) * * *
(1) * * *
An offering statement pursuant to Regulation A relating to
these securities has been filed with the Securities and Exchange
Commission. * * *
* * * * *
5. By amending 230.256 by revising the introductory text
to read as follows:
230.256 Filing of sales material.
While not a condition to an exemption pursuant to this
provision, seven copies of any advertisement or written
communication, or the script of any radio or television
broadcast, shall be filed with the main office of the Commission
in Washington, D.C.
* * * * *
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6. By amending 230.257 by revising the first sentence of
the introductory text to read as follows:
230.257 Report of sales and use of proceeds.
While not a condition to an exemption pursuant to this
provision, the issuer and/or each selling security holder shall
file seven copies of a report concerning sales and use of
proceeds on Form 2-A [239.91 of this chapter], or other
prescribed form with the main office of the Commission in
Washington, D.C. ***
* * * * *
7. By amending 230.259 by revising the last sentence of
paragraph (a) to read as follows:
230.259 Withdrawal or abandonment of offering statements.
(a) * * * The application for withdrawal shall state the
reason the offering statement is to be withdrawn, shall be signed
by an authorized representative of the issuer and shall be
provided to the main office of the Commission in Washington, D.C.
* * * * *
PART 232 -- REGULATION S-T -- GENERAL RULES AND REGULATIONS
FOR ELECTRONIC FILINGS
8. The authority citation for Part 232 continues to read
as follows:
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 77sss(a),
78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll(d), 79t(a), 80a-8,
80a-29, 80a-30 and 80a-37.
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9. By amending 232.101 by removing paragraph (c)(7) and
by redesignating paragraphs (c)(8) through (c)(20) as paragraphs
(c)(7) through (c)(19).
PART 239 -- FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933
10. The authority citation for Part 239 continues to read
in part as follows:
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77sss, 78c,
78l, 78m, 78n, 78o(d), 78w(a), 78ll(d), 79e, 79f, 79g, 79j, 79l,
79m, 79n, 79q, 79t, 80a-8, 80a-29, 80a-30 and 80a-37, unless
otherwise noted.
* * * * *
11. By amending Form SB-1 (referenced in 239.9) by
revising General Instruction A.2. and removing General
Instruction A.4. and A.5. to read as follows:
Note: The text of Form SB-1 does not and the amendments
will not appear in the Code of Federal Regulations.
FORM SB-1
* * * * *
General Instructions
A. Use of Form and Place of Filing
* * * * *
2. The small business issuer shall file the registration
statement in the Washington, D.C. office.
* * * * *
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12. By amending Form SB-2 (referenced in 239.10) by
revising General Instruction A.2. and removing General
Instruction A.4. to read as follows:
Note: The text of Form SB-2 does not and the amendments
will not appear in the Code of Federal Regulations.
FORM SB-2
* * * * *
General Instructions
A. Use of Form and Place of Filing
* * * * *
2. Offerings on Form SB-2 shall be filed in the
Washington, D. C. office. * * * *
*
13. By amending Form 1-A (referenced in 239.90) by
removing the last two sentences of General Instruction II.
Note: The text of Form 1-A does not and the amendments
will not appear in the Code of Federal Regulations.
14. By amending Form 2-A (239.91) by revising General
Instructions to read as follows:
Note: The text of Form 2-A does not and the amendments
will not appear in the Code of Federal Regulations.
FORM 2-A
* * * * *
General Instructions
The report shall be filed in accordance with the provisions
of Rule 257 of Regulation A.
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Answer each item in the box(es) or spaces provided. If
additional space is required for any response, continue the
response on an attached sheet.
If the issuer is required to file any report(s) on this form
subsequent to its initial filing, each subsequent filing shall be
deemed an amendment to the initial filing. Do not report in any
amendment responses to Items 3-11 unless the information has
changed.
No fee is required to accompany this filing.
Seven copies of the form shall be filed with the main office
of the Commission in Washington, D.C. At least one copy of the
form shall be manually signed; other copies may bear typed or
printed signatures.
* * * * *
By the Commission.
Jonathan G. Katz
Secretary
December 16, 1996