Intrastate Offering Exemptions: Guidance for Issuers

Oct. 16, 2024

This resource represents the views of the staff of the Division of Corporation Finance. It is not a rule, regulation, or statement of the Securities and Exchange Commission (“Commission”). The Commission has neither approved nor disapproved its content. This resource, like all staff statements, 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. This resource does not provide legal advice.

On October 26, 2016, the Commission adopted final rules that modernize how issuers can raise money to fund their businesses through intrastate offerings while maintaining investor protections. The final rules amended Securities Act Rule 147 to modernize the safe harbor under Section 3(a)(11)[1] so issuers may continue to use state law exemptions that are conditioned upon compliance with both Section 3(a)(11) and Rule 147. The final rules also established a new intrastate offering exemption, Securities Act Rule 147A, that further facilitates intrastate offerings by allowing offers to be accessible to out-of-state residents and making the exemption available to issuers that are incorporated or organized out-of-state.[2]

1. Requirements of Securities Act Rules 147 and 147A

In order to conduct offerings pursuant to Rule 147 or Rule 147A, issuers[3] must meet certain requirements. The table below broadly summarizes the Commission requirements for each rule. We refer to “in-state” as the state or territory in which the issuer is resident and doing business at the time of the sale of the security.

Description Requirements of
Rule 147
(safe harbor under
Section 3(a)(11))
Requirements of
Rule 147A
The issuer is organized in-state.
The officers, partners, or managers of the issuer primarily direct, control and coordinate the issuer’s activities (“principal place of business”) in-state.
The issuer satisfies at least one of the “doing business” requirements described below.
Offers are limited to in-state residents[4] or persons who the issuer reasonably believes are in-state residents.
Sales are limited to in-state residents or persons who the issuer reasonably believes are in-state residents.
The issuer obtains a written representation from each purchaser as to residency.

2. “Doing Business” In-State

Issuers conducting an offering pursuant to Rule 147 or Rule 147A must satisfy at least one of the following requirements in order to be considered “doing business” in-state:

  • the issuer derived at least 80% of its consolidated gross revenues from the operation of a business or of real property located in-state or from the rendering of services in-state;
  • the issuer had at least 80% of its consolidated assets located in-state;[5]
  • the issuer intends to use and uses at least 80% of the net proceeds from the offering towards the operation of a business or of real property in-state, the purchase of real property located in-state, or the rendering of services in-state; or
  • a majority of the issuer’s employees are based in-state.

3. Restrictions on Resales

Securities purchased in an offering pursuant to Rule 147 or Rule 147A can only be resold to persons residing in-state for a period of six months from the date of the sale by the issuer to the purchaser. Issuers must disclose these limitations on resale to offerees and purchasers and include appropriate legends on the certificate or document evidencing the security. Although securities purchased in an offering pursuant to Rule 147 or Rule 147A are not considered “restricted securities,” persons reselling the securities will nonetheless need to register the transaction with the Commission or have an exemption from registration under federal law.[6]

4. Filing Requirements and Relationship with State Securities Laws

Issuers conducting an offering pursuant to Rule 147 or Rule 147A are not required to file any information with or pay any fees to the Commission. Issuers, however, must comply with state securities laws and regulations in the state in which securities are offered or sold. Each state’s securities laws have their own registration requirements and exemptions to registration requirements. Issuers wishing to obtain information should contact the state securities regulator in the state in which they intend to offer or sell securities for further guidance on compliance with state law requirements. Issuers may also obtain useful information on state securities law registration requirements and exemptions to registration requirements by visiting the website of the North American Securities Administrators Association (NASAA).

5. Integration – Securities Act Rule 152

The integration doctrine provides an analytical framework for determining whether multiple securities transactions should be considered part of the same offering. This analysis helps to determine whether registration under Section 5 of the Securities Act is required or if the transactions can be conducted pursuant to an exemption from registration. Securities Act Rule 152 provides a general principle of integration and four non-exclusive safe harbors from integration. 

Depending on the particular facts and circumstances, an issuer may consider claiming reliance on any of the Rule 152(b) safe harbors from integration described below:

Safe Harbor 1

Rule 152(b)(1)
Any offering made more than 30 calendar days before the commencement of any other offering, or more than 30 calendar days after the termination or completion of any other offering, will not be integrated with such other offering; provided that, for an exempt offering for which general solicitation is not permitted that follows by 30 calendar days or more an offering that allows general solicitation, the provisions of Rule 152(a)(1) shall apply.

Safe Harbor 2

Rule 152(b)(2)
Offers and sales made in compliance with Rule 701, pursuant to an employee benefit plan, or in compliance with Regulation S will not be integrated with other offerings.

Safe Harbor 3

Rule 152(b)(3)
An offering for which a Securities Act registration statement has been filed will not be integrated if it is made subsequent to: (i) a terminated or completed offering for which general solicitation is not permitted; (ii) a terminated or completed offering for which general solicitation is permitted that was made only to qualified institutional buyers and institutional accredited investors; or (iii) an offering for which general solicitation is permitted that terminated or completed more than 30 calendar days prior to the commencement of the registered offering.

Safe Harbor 4

Rule 152(b)(4)
Offers and sales made in reliance on an exemption for which general solicitation is permitted will not be integrated if made subsequent to any terminated or completed offering.

Rules 152(c) and (d) provide guidance on when an exempt offering is deemed to commence and terminate.  For more information about Rule 152, see the Compliance Guide: Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in Private Markets.

6. Other Resources

Rule 147 and Rule 147A adopting releases can be found at the following links:

Rules 147 and 147A can be accessed on the electronic Code of Federal Regulations website.

Additional information regarding the requirements of Section 3(a)(11) and Rules 147 and 147A is available in the Division of Corporation Finance’s Compliance & Disclosure Interpretations.

You can also submit complaints or tips about possible securities laws violations on the SEC's tip or complaint page.

7. Contacting the SEC Staff

The SEC staff is happy to assist with questions regarding Section 3(a)(11) and Rules 147 and 147A. You may contact the Division of Corporation Finance’s Office of Small Business Policy online or by telephone at (202) 551-3460.


[1] Section 3(a)(11) of the Securities Act is generally known as the “intrastate offering exemption.” To qualify for the exemption, an issuer must be organized in the state where it is offering the securities; carry out a significant amount of its business in that state; and make offers and sales only to residents of that state. As Rule 147 is a safe harbor to the Section 3(a)(11) exemption, its requirements track those of Section 3(a)(11).

[2] Amended Rule 147 and new Rule 147A became effective on April 20, 2017.

[3] Issuers registered or required to be registered under the Investment Company Act of 1940 are not eligible to conduct offerings pursuant to Section 3(a)(11), Rule 147 or Rule 147A.

[4] The residence of an offeree or purchaser that is a legal entity (e.g. corporation, partnership or trust) is the location where, at the time of the sale, the entity has its principal place of business. However, if a legal entity was organized for the specific purpose of acquiring securities pursuant to Rule 147 or Rule 147A, all beneficial owners must be in-state residents for the entity to be considered an in-state resident. In addition, a trust that is not deemed to be a separate legal entity is a resident of each state or territory in which its trustee is, or trustees are, resident.

[5] This is measured at the end of its most recent semi-annual fiscal period prior to the first offer of securities pursuant to the exemption.

[6] An exemption commonly relied upon for the resale of the securities is Section 4(a)(1) of the Securities Act, which is available to any person other than an issuer, underwriter or dealer. Rule 144 is a “safe harbor” under Section 4(a)(1), providing objective standards that a security holder can rely on to meet the requirements of that exemption. Several exemptions, including the exemptions under Regulation D and Rules 147 and 147A are only available for offers and sales by an issuer of securities to initial purchasers and are not available to any affiliate of the issuer or to any person for resales of the securities.

Last Reviewed or Updated: Nov. 14, 2024