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U.S. Securities and Exchange Commission

SEC Facilitates Smaller Company Access to Capital Markets

Also Approves Electronic Filing and Changes to Form D


Washington, D.C., Dec. 11, 2007 - The Securities and Exchange Commission today unanimously approved changes that will give smaller companies faster and easier access to capital when they need it or market conditions are favorable.

Specifically, the Commission adopted amendments to the eligibility requirements of Form S-3 and Form F-3 of the Securities Act to allow companies that do not meet the current public float requirements of the forms to nevertheless register primary offerings of their securities, subject to certain restrictions, including the amount of securities those companies may sell pursuant to the expanded eligibility standard in any one-year period.

These changes to Forms S-3 and F-3 are intended to allow a larger number of public companies to benefit from the greater flexibility and efficiency in accessing the public securities markets afforded by Forms S-3 and F-3 in a manner that is consistent with investor protection.

"By extending the benefits of the Form S-3 and F-3 streamlined registration statements to approximately 1,400 smaller reporting companies, the Commission has significantly enhanced the ease and efficiency with which these companies can access the public securities markets," said John White, Director of the SEC's Division of Corporation Finance.

The amendments to Forms S-3 and F-3 will allow companies with less than $75 million in public float to register primary offerings of their securities on these forms, provided they

  • meet the other registrant eligibility conditions for the use of the respective form;
  • are not shell companies and have not been shell companies for at least 12 calendar months before filing the registration statement;
  • have a class of common equity securities listed and registered on a national securities exchange; and
  • do not sell more than the equivalent of one-third of their public float in primary offerings pursuant to the new instructions in any period of 12 calendar months.

The effective date for these amendments will be 30 days after their publication in the Federal Register.

In a separate action the Commission voted unanimously to adopt provisions that will mandate electronic filing of Form D information after a phase-in period during which electronic filing will be voluntary.

"The Commission's launch of online filing of Form D is a very positive development," said John White, Director of the SEC's Division of Corporation Finance. "We hope that this will eventually facilitate one-stop filing of both federal and state Form D notices and substantially reduce filing burdens of smaller companies."

The phase-in period for Form D electronic filing will begin on Sept. 15, 2008. Electronic filing will become mandatory on March 16, 2009. The information will be filed through an online filing system that would be accessible from any computer with Internet access, will capture and tag data items and will make the filed information available on the Commission's Web site in a format that can be viewed in an easy-to-read format.

The Commission also voted to adopt amendments to revise and update the information requirements of Form D. Specific revisions will include, among other changes,

  • requiring filers to identify all issuers in a multiple-issuer offering;
  • deleting the current requirement to identify as "related persons" owners of 10 percent or more of a class of equity securities;
  • replacing the current requirement to provide a business description with a requirement to provide industry group information from a pre-established list;
  • requiring revenue range information for operating companies and net asset value information for hedge funds (subject to an option to decline to disclose);
  • requiring reporting the date of first sale;
  • specifying that material mistakes of fact or errors in a previously filed Form D require an amendment and when changes in a previously filed Form D or the passage of time require amendments;
  • requiring that amendments contain current information in response to all information requirements;
  • revising the minimum investment amount disclosure requirement to specify that it relates to outside investors only;
  • replacing the current requirement to disclose information on a wide variety of expense and use of proceeds items with a requirement to disclose expenses only as to amounts paid for sales commissions and, separately stated, finders' fees and disclose use of proceeds only as to the amount of gross proceeds used or proposed to be used for payments to related persons; and
  • permitting a limited amount of free writing to the extent necessary to clarify responses.

The changes in information requirements will become effective on Sept. 15, 2008.

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The full text of the detailed releases concerning these amendments will be posted to the SEC Web site as soon as possible.



Modified: 12/11/2007