The North American Securities Administrators Association announced Monday that it has launched an online Electronic Filing Depository (EFD) to enhance filings of Reg D offerings under Rule 506.
NASAA says that its online EFD system allows an issuer to submit a Form D for a Regulation D Rule 506 offering to state securities regulators and to pay related fees. The EFD website also enables the public to search and view, free of charge, Form D filings made with state securities regulators through EFD.
“We are very pleased to provide the EFD system to create an efficient, streamlined system for state Form D filing requirements,” said William Beatty, NASAA president and Washington Securities Director, in a statement. “Issuers will benefit from this uniform and effective regulatory tool, which also strengthens investor protection by improving the transparency of Form D filings.”
The EFD system initially will be limited to Form D filings for Regulation D Rule 506 offerings, but Beatty said that NASAA expects the filing system will be expanded to include additional state securities registration and notice filing materials.
As NASAA explains, Rule 506 of Regulation D is a “safe harbor” for the private offering exemption of Section 4(a)(2) of the Securities Act and also provides an exemption for public offerings to verified accredited investors. Issuers relying on the Rule 506 exemption do not have to register their offerings of securities with the SEC or state securities regulators, but they must file what is known as a “Form D” with the SEC and state securities regulators. Form D contains limited information about the securities being offered and the issuer offering them.
Beatty said the EFD system initially will be limited to Form D filings for Regulation D Rule 506 offerings, but added that NASAA expects the filing system will be expanded to include additional state securities registration and notice filing materials.
NASAA’s EFD website offers a suite of tools to filers and regulators and will be available 24 hours a day, seven days a week, unless the website is undergoing maintenance. In addition to the filing fees required by the states, there is a one-time $150 system use fee for each offering making its filings through EFD, which covers initial, amendment and renewal filings made through EFD.
Beatty noted that the filing of a Form D with the Securities and Exchange Commission and with a state securities regulator does not mean that the SEC or any state securities regulator has approved the securities or passed any judgment on the soundness of the securities as an investment. “If you have questions about a particular offering, you should contact the securities regulator in your state,” he said.