[Federal Register Volume 61, Number 246 (Friday, December 20, 1996)]
[Rules and Regulations]
[Pages 67200-67203]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32336]
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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.
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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 January 21, 1997,
except that the amendment to Sec. 232.101(c) is effective May 5, 1997.
FOR FURTHER INFORMATION CONTACT: Barbara C. Jacobs or James R. Budge,
[[Page 67201]]
(202) 942-2950, Office of Small Business Review, Division of
Corporation Finance, Securities and Exchange Commission, 450 Fifth
Street, NW., Mail Stop 7-8, Washington, DC 20549.
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.
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\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-113 and SB-214 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 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
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\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.
\18\ Securities Act Rule 252.
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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.
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\19\ See SEC Press Release No. 96-123 (October 9, 1996).
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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 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 Regulation A filings will continue to be
filed in paper pursuant to Rule 101(c) of Regulation S-T.23
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\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 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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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 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 January 21, 1997. The
change to Regulation S-T, however, is effective May 5, 1997.
[[Page 67202]]
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.''
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\24\ 5 U.S.C. 553(b).
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III. Statutory Basis
The amendments to the Commission's rules and forms are being made
pursuant to Section 19(a) of the Securities Act.
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 Sec. 230.252 by revising paragraph (e) and the
second sentence of paragraph (h)(1) to read as follows:
Sec. 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. * * *
* * * * *
3. By amending Sec. 230.254 by revising the first sentence of
paragraph (b)(1) to read as follows:
Sec. 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 Sec. 230.255 by revising the first sentence after
paragraph (a)(1) to read as follows:
Sec. 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 Sec. 230.256 by revising the introductory text to
read as follows:
Sec. 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.
* * * * *
6. By amending Sec. 230.257 by revising the first sentence of the
introductory text to read as follows:
Sec. 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
(Sec. 239.91 of this chapter), or other prescribed form with the main
office of the Commission in Washington, D.C. * * *
* * * * *
7. By amending Sec. 230.259 by revising the last sentence of
paragraph (a) to read as follows:
Sec. 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.
Sec. 232.101 [Amended]
9. By amending Sec. 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.
* * * * *
Sec. 239.9 [Form SB-1--Amended]
11. By amending Form SB-1 (referenced in Sec. 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.
* * * * *
Sec. 239.10 [Form SB-2 amended]
12. By amending Form SB-2 (referenced in Sec. 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.
* * * * *
[[Page 67203]]
Sec. 239.90 [Form 1-A Amended]
13. By amending Form 1-A (referenced in Sec. 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.
Sec. 239.91 [Form 2-A amended]
14. By amending Form 2-A (Sec. 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.
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.
* * * * *
Dated: December 16, 1996.
By the Commission.
Jonathan G. Katz,
Secretary.
[FR Doc. 96-32336 Filed 12-19-96; 8:45 am]
BILLING CODE 8010-01-P
