Rule: Electronic Filing and Revision of Form D

Wednesday,
February 27, 2008
Part IV
Securities and
Exchange
Commission
17 CFR Parts 230, 232, and 239
Electronic Filing and Revision of Form D;
Final Rule
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10592 Federal Register / Vol. 73, No. 39 / Wednesday, February 27, 2008 / Rules and Regulations
SECURITIES AND EXCHANGE D,9 and Form D 10 under the Securities will be permitted to file Form D
COMMISSION Act of 1933 (‘‘Securities Act’’).11 We information voluntarily through the
also are adding temporary Rule 503T Internet when our new Form D
17 CFR Parts 230, 232, and 239 and Temporary Form D under the electronic filing system becomes
Securities Act and temporary Rule available on September 15, 2008 and
[RELEASE NOS. 33–8891; 34–57280; 39–
2453; IC–28145; FILE NO. S7–12–07] 101(b)(10) of Regulation S–T. will be required to file electronically
through the Internet on and after March
RIN 3235–AJ87 Table of Contents 16, 2009.
I. Executive Summary and Background Form D serves as the official notice of
Electronic Filing and Revision of A. History and Purpose of Form D an offering of securities made without
Form D B. Need to Update Form D and Require registration under the Securities Act in
Electronic Filing reliance on an exemption provided by
AGENCY: Securities and Exchange 1. Easing Filing Burdens
Commission. Regulation D.13 Both public and
2. Better Public Availability of Form D
Information
nonpublic companies file information
ACTION: Final rule. using this form.
3. Federal and State Uniformity and
SUMMARY: The Securities and Exchange Coordination; One-Stop Filing Regulation D was part of a
4. Improved Collection of Data for Commission initiative in the early 1980s
Commission is adopting rule
Commission Enforcement and to provide a more coherent pattern of
amendments mandating the electronic
Rulemaking Efforts exemptive relief from the registration
filing of information required by
C. Summary of Adopted Amendments requirements of the Securities Act, and
Securities Act of 1933 Form D through II. Discussion of Amendments particularly to address the capital
the Internet. We also are adopting A. Amendments to Form D Content formation needs of small business.14 At
revisions to Form D and to Regulation Requirements the time, we intended the Form D filing
D in connection with the electronic 1. Basic Identifying and Contact
requirement in Rule 503 of Regulation D
filing requirement. The revisions Information
2. Additional Information About Issuer to serve an important data collection
simplify and restructure Form D and
3. Identification of Claimed Exemptions objective.15 We expected that the
update and revise its information
and Exclusions empirical data derived from the Form D
requirements. The information required
4. Indication of Type of Filing filings would enable us to better
by Form D will be filed with us
a. General Requirements evaluate the effectiveness of Regulation
electronically through a new online b. Amendment of Previously Filed Form D D as a capital raising device and
filing system that will be accessible 5. Information About Offering eventually to further tailor our rules to
from any computer with Internet access. 6. Signature and Submission provide appropriate support for both
The data filed will be available on our B. Electronic Filing of Form D capital formation, especially as it relates
Web site and will be interactive and C. General Solicitation and General
Advertising Issues Presented by
to small business, and investor
searchable.
Electronic Filing of Form D protection.16
DATES: Effective Date: September 15, III. Electronic Filing Procedure We modified the requirements
2008 except the amendments to A. Mechanics relating to Form D in 1986, making
§ 232.101(c)(6) and § 232.201(a) are B. Database Capabilities of Electronic Form Form D a uniform notification form that
effective March 28, 2008, D Repository could be filed with state securities
§ 232.101(a)(1)(xiii) is effective March C. System Implementation
16, 2009 and § 230.503T, IV. Paperwork Reduction Act Analysis 13 Regulation D contains separate exemptions for
§ 232.101(b)(10) and § 239.500T are V. Cost-Benefit Analysis limited offerings in Rules 504, 505 and 506. Form
VI. Consideration of Impact on Competition D also is to be used by issuers making offerings of
effective from September 15, 2008 to securities without registration in reliance on the
and Promotion of Efficiency,
March 16, 2009. Competition and Capital Formation exemption contained in Section 4(6) of the
FOR FURTHER INFORMATION CONTACT: VII. Final Regulatory Flexibility Act Analysis Securities Act [15 U.S.C. 77d(6)]. Although we
primarily discuss Regulation D in this release, the
Questions about this release should be VIII. Statutory Basis and Text of revised Form D also will continue to apply to
addressed to Gerald J. Laporte, Chief, or Amendments Section 4(6) offerings. Regardless of the type of
Corey A. Jennings, Attorney-Advisor, I. Executive Summary and Background offering to which revised Form D applies, it will be
Office of Small Business Policy, required to be filed electronically after a transition
A. History and Purpose of Form D period during which we will allow either paper or
Division of Corporation Finance, or electronic filing.
Mark W. Green, Senior Special Counsel On June 29, 2007, we issued a release 14 We adopted Form D and Regulation D in 1982.
(Regulatory Policy), Division of in which we proposed for public Release No. 33–6389 (Mar. 8, 1982) [47 FR 11251]
Corporation Finance, Securities and (adopting Form D as a replacement for Forms 4(6),
comment rule amendments mandating 146, 240 and 242). They had been proposed in the
Exchange Commission, 100 F Street, the electronic filing of Form D through previous year. Release No. 33–6339 (Aug. 7, 1981)
NE., Washington, DC 20549–3628, (202) the Internet and revisions to that form.12 [46 FR 41791] (proposing Regulation D and Form
551–3460. In this release, we are adopting the D).
15 We stated in the proposing release for the
SUPPLEMENTARY INFORMATION: We are amendments substantially as proposed.
original Rule 503:
adopting revisions to Rules 100,1 101,2 As further described below, companies ‘‘An important purpose of the notice * * * is to
104,3 201,4 and 202 5 of Regulation S– collect empirical data which will provide a basis for
T,6 Rules 502 7 and 503 8 of Regulation 9 17 CFR 230.501–508. further action by the Commission either in terms of
10 17 CFR 239.500. amending existing rules and regulations or
1 17 CFR 232.100.
11 15 U.S.C. 77a et seq. proposing new ones * * *. Further, the proposed
2 17 12 We proposed the amendments in Release No. Form would allow the Commission to elicit
CFR 232.101.
3 17 CFR 232.104. 33–8814 (June 29, 2007) [72 FR 37376]. The information necessary in assessing the effectiveness
comment letters we received in response to the of Regulation D as a capital raising device for small
4 17 CFR 232.201.
proposing release were filed in File Number S7–12– businesses.’’
5 17 CFR 232.202.
07 and are available at http://www.sec.gov/ Release No. 33–6339 (Aug. 7, 1981) [46 FR 41791,
6 17 CFR 232.10 et seq.
comments/s7–12–07/s71207.shtml or from our 41799].
7 17 CFR 230.502.
Public Reference Room at 100 F Street, NE., 16 Release No. 33–6339 (Aug. 7, 1981) [46 FR
8 17 CFR 230.503. Washington, DC 20549. 41791, 471799].
Federal Register / Vol. 73, No. 39 / Wednesday, February 27, 2008 / Rules and Regulations 10593
regulators.17 This effort was undertaken In 1996, we proposed to eliminate the with the federal securities laws.’’ 27 In
with the cooperation of the North Form D filing requirement and replace addition, the information in Form D
American Securities Administrators it with an issuer obligation to complete filings serves as a source of business
Association (NASAA), the organization a Form D and retain it for a period of intelligence for commercial information
of state securities regulators, as part of time.22 At the time, our Task Force on vendors, as well as for participants in
the Commission’s efforts to reduce the Disclosure Simplification had suggested the venture capital, private equity, and
costs of capital formation for small that the Commission consider the other industries that rely on Regulation
business and to promote uniformity continued need for a Form D filing D offerings and for competitors of
between federal and state securities requirement.23 After reviewing companies that file Form D information.
regulation. At that time, we also comments on the proposal, we Academic researchers use Form D
eliminated the requirement to amend a determined that the information information to conduct empirical
Form D filing for an offering every six collected in Form D filings was still research aimed at improving the
months during the course of the offering useful to us ‘‘in conducting economic workings of these industries.28
and the requirement to make a final and other analyses of the private Journalists use Form D information to
Form D filing within 30 days of the final placement market’’ and retained the report on capital-raising in these
sale in the offering. We left intact the requirement.24 In 1998, we solicited industries.29
requirement in Rule 503 to file a Form public comment on, but did not
B. Need To Update Form D and Require
D notification within 15 days after the propose, requiring electronic filing of
Electronic Filing
first sale of securities in an offering, the Form D notice.25 The public
leaving that as the sole current explicit comments generally favored electronic Currently, much of the information
requirement for a Form D filing.18 filing in principle but expressed required by Form D appears to be useful
concern about Form D filers needing to and justified in the interests of investor
In 1989, we amended the Regulation protection and capital formation.30 It
follow the same procedures as then
D exemptions to eliminate the filing of also appears that some useful
were required generally for filings
Form D information as a condition to information that could be required by
through the Commission’s electronic
their availability.19 At that time, we also Form D is not required currently. On the
filing system, called the Electronic Data
added Rule 507 to Regulation D to other hand, Form D currently requires
Gathering, Analysis and Retrieval or
provide an incentive for issuers to make some information that may no longer be
‘‘EDGAR’’ system.
a Form D filing, even though it was no useful. Our staff receives many inquiries
In summary, our previous statements
longer a condition to the availability of from market participants suggesting that
on Form D have suggested that, at the
the Regulation D exemptions.20 Form D could be clarified and
federal regulatory level, the Form D
Specifically, Rule 507 disqualifies an simplified. Moreover, the absence of an
filing serves two primary purposes:
issuer from using a Regulation D
• Collection of data for use in the electronic system for filing Form D
exemption in the future if it has been information prevents issuers from filing
Commission’s rulemaking efforts; and
enjoined by a court for violating Rule
• Enforcement of the federal through efficient modern methods and
503 by failing to file the information limits the usefulness of the information
securities laws, including enforcement
required by Form D.21 Consequently, an collected on Form D. The rules we
of the exemptions in Regulation D.26
issuer has an incentive to make a Form adopt today address deficiencies in the
The information submitted in Form D
D filing to avoid the possibility that a Form D data collection requirements
filings also is useful for other purposes.
court will enjoin the issuer for violating and process.
The staffs of state securities regulators
Rule 503 and, as a result, disqualify the
and the Financial Industry Regulatory 1. Easing Filing Burdens
issuer from using a Regulation D
Authority (FINRA), the successor to the
exemption in the future. Our new Form D rules are intended to
member firm regulatory functions of the
National Association of Securities ease the costs and burdens of preparing
17 Release No. 33–6663 (Oct. 2, 1986) [51 FR
Dealers, Inc. and NYSE Regulation, Inc., and filing Form D information. The
36385].
18 17 CFR 230.503. also use Form D information to enforce informational requirements will be
19 Release No. 33–6825 (Mar. 15, 1989) [54 FR securities laws and the rules of streamlined and updated. The
11369]. securities self-regulatory organizations. instructions will be clarified and
20 Id.
Form D filings also have become a simplified. Issuers will file Form D
21 On August 3, 2007, we issued a release
source of information for investors. Our information electronically through a
proposing changes to Regulation D. See Release No. new online filing system that will be
33–8828 (Aug. 3, 2007) [72 FR 45116]. Among those
Web site advises potential investors in
changes were moving Regulation D’s exemption Regulation D offerings to check whether
27 See http://www.sec.gov/answers/formd.htm.
disqualification provisions to a new subparagraph the company making the offering has 28 For
(e) of Rule 502 and adopting a new exemption that a discussion of how academic researchers
filed a Form D notice and advises that are using available data on private investments to
would appear in a revised Rule 507 of Regulation
D. The Regulation D release also sought additional
‘‘[i]f the company has not filed a Form improve the workings of the venture capital
comment on the proposals we made in Release No. D, this should alert you that the industry, see A. Ginsberg, Truth, or Consequences:
33–8766 (Dec. 27, 2006) [72 FR 400] that concerned company might not be in compliance Academic Researchers are Helping Policy Makers
accredited investors in certain private pooled and Practitioners Understand the Problems Facing
investment vehicles. Since we have not adopted the Venture Capital Industry, Innovation Review 8
22 Release No. 33–7301 (May 31, 1996) [61 FR
and are still considering the changes proposed in (Berkley Center for Entrepreneurial Studies, Fall
30405]. 2002).
the Regulation D release and the accredited investor 23 SEC Task Force on Disclosure Simplification, 29 See, e.g., R.J. Terry and B. Hammer, NEA Closes
changes proposed in the private pooled investment
vehicle release, the new Form D and its Final Report 17 (Mar. 5, 1996), available at $2.5 Billion Fund, Baltimore Bus. Journal, July 10,
implementing rules do not reflect those changes, as http://www.sec.gov/news/studies/smpl.txt. 2006.
24 Release No. 33–7431, at 5 (July 18, 1997) [62

did the Form D in the Form D proposing release. 30 For example, information provided in response
We are still considering the proposed changes to FR 39755, 39756]. to the requirement to check the applicable specified
25 Release No. 33–7541 (May 21, 1998) [63 FR
Form D that would be necessary to reflect adoption exemptions from registration claimed by the issuer
of the Regulation D and private pooled investment 29168]. helps the Commission monitor and better evaluate
vehicle changes, and may adopt the Form D 26 Release No. 33–6389 (Mar. 8, 1982) [47 FR use of the claimed exemptions in order to protect
changes if we adopt the Regulation D and private 11251] and Release No. 33–7431 (July 18, 1997) [62 investors and facilitate the development of private
pooled investment vehicle changes. FR 39755]. and limited markets in which to raise capital.
accessible from any computer with information into an existing application, electronic system that would interface
Internet access. Issuers will provide data or create an application to use the with our system and would receive
by responding to discrete information information. filings and collect fees on behalf of
requests. Appropriate data entries will Unlike information filed with us participating state securities
be reviewed automatically for proper electronically, paper filings are available regulators.35 One-stop filing will reduce
characters and consistency with entries from us only in person in our Public significantly the costs and burdens of
in other fields. Data entry fields will be Reference Room or by means of a mail preparing and filing Form D information
accompanied by links to instructions request. We charge a nominal fee for with the Commission and with state
and other helpful information. We copies of Form D filings. Some Form D securities regulators. This could
believe these system features, among filings are available at higher cost from represent a substantial savings for small
others, will help facilitate a relatively private vendors through the Internet and businesses and others filing Form D
easy-to-use filing process that will telephone requests. information.
deliver accurate information quickly, The commenters that responded to
3. Federal and State Uniformity and
reliably, and securely.31 The Form D our Form D proposing release that
Coordination; One-Stop Filing
filing will continue to be required addressed one-stop filing supported it,36
within 15 days of an issuer’s first sale For over 20 years, Form D has served but some made suggestions and some
in an offering without Securities Act as a means to promote federal and state expressed concerns.37 NASAA stated
registration in reliance on one or more uniformity and coordination in that it envisions a system that would
of the exemptions provided in securities regulation by providing a direct issuers to a NASAA-hosted Web
Regulation D, and the rules will clarify uniform notification form that can be site that lists the fees for states a filer
when amendments are required. Paper filed with the Commission and with selects and enables the filer to make an
filing of Form D information will be state securities regulators.34 The electronic payment to those states that
eliminated after a transition period in contemplated electronic filing system would include a modest service charge
which the information may be filed for Form D information will continue to defray costs of the site and service.38
either electronically through the that tradition and can enhance the NASAA also stated that it envisions that
Internet or in paper.32 utility of Form D as a means to promote the electronic payment would be made
uniformity and coordination between by means of an electronic funds transfer
2. Better Public Availability of Form D federal and state securities regulation. or credit card transaction. NASAA
Information The availability of Form D further envisions that, after payment,
Requiring the electronic filing of Form information filed with us through a the system would allow a completed
D data through the Internet will make searchable electronic database will Form D to be filed with the Commission
the information filed more readily enable both federal and state securities and distributed by the NASAA-hosted
available to regulators and members of regulators to monitor the exempt site to the states selected by the filer.
the public.33 The information will be securities transaction markets more Finally, NASAA anticipates that the
available on our Web site and, because effectively. The system also will permit Commission would have no direct
the online filing system will improved coordination among federal involvement or responsibility for the
automatically capture and tag data and state regulators, which is essential state distribution and payment system.
items, the data will be interactive and to efficient and effective capital Two commenters expressed concerns
searchable. The Commission’s public formation through exempt transactions, about one-stop filing, relating primarily
Web site at http://www.sec.gov will especially by smaller companies, and to to the prospects for timely state
enable users to view the information in investor protection. State securities adoption 39 and, in one case, the use of
an easy-to-read format, download the regulators will be able to access the the electronic system as it relates to the
information on our Web site to learn if National Securities Markets
31 The new online filing system is discussed in new Form D information of interest to Improvement Act of 1996.40 Finally, one
further detail in Part III of this release. them has been filed.
32 Rule 101 of Regulation S–T, Rule 503 of
The system will enhance uniformity 35 The Commission’s electronic filing system will
Regulation D and the description of Form D will and coordination even more if it results not collect fees on behalf of any states.
mandate electronic filing of Form D information
subject to varied effective dates and temporary in ‘‘one-stop filing,’’ an approach we 36 One commenter, for example, stated that if one-
provisions, which together will permit the and NASAA are exploring. One-stop stop filing were implemented properly, it would
reduce significantly the costs and burdens of
information to be filed either electronically through filing will enable companies to file preparing and filing Form D with the Commission
the Internet or in paper during the transition period. Form D information both with us and
The transition period is discussed more fully in Part and the states. See letter from American Bar
III.C below. Currently, our rules require issuers to with the states they designate in one Association, Section of Business Law, Committees
file five paper copies of the Form D with us by mail electronic transaction. While that on Federal Regulation of Securities and State
or physical delivery to Commission headquarters. Regulation of Securities (ABA).
capability will not be available when 37 See letters from ABA, Coalition of Private
17 CFR 230.503(a). The Commission received Form D electronic filing with the
27,843 Form D filings in its most recently ended Investment Companies (CPIC), Connecticut
fiscal year, 2007. Commission begins, we have been Department of Banking (Connecticut), Managed
33 Most filings made with us currently are filed working actively with NASAA to Funds Association (MFA), Massachusetts Securities
electronically through our EDGAR system. We achieve that capability as soon as Division (Massachusetts), NASAA and
began to make EDGAR electronic filing mandatory Pennsylvania Securities Commission
practicable. We understand that NASAA (Pennsylvania).
in 1993. Initially, a number of forms—including
Form D—were excluded from mandated electronic is considering establishing its own new 38 See letter from NASAA.
39 See letters from ABA and MFA.
filing. Since the launch of the EDGAR system, we
have increased the number of forms that are 34 According to a unit of the American Bar 40 See letter from ABA (‘‘There are several aspects
required to be filed electronically, but Form D has Association, 48 states, the District of Columbia, of ‘one-stop’ filing about which we have particular
remained a paper-only filing. It will continue to Puerto Rico, and the U.S. Virgin Islands accept reservations emanating * * * partly from a desire
remain so until the September 15, 2008 effective filings on Form D. New York prescribes its own to delineate clear boundaries as a result of federal
date of voluntary electronic filing, when companies Form 99. Florida does not require any filing for the preemption under the National Securities Markets
will be able to file Form D information either in types of transactions other jurisdictions require to Improvement Act of 1996 * * * .’’). Section 102(a)
paper or electronically until the end of the phase- be reported on Form D. See Report on Blue Sky of the National Securities Markets Improvement Act
in period on March 16, 2009. Beginning on that Survey of the NSMIA Subcommittee, Committee on of 1996 (‘‘NSMIA’’) [Pub. L. No. 104–290 110 Stat.
date, Form D information will be required to be State Regulation of Securities, American Bar 3416 (Oct. 11, 1996)] enacted new Section 18 of the
filed electronically through the Internet. Association Business Law Section (Feb. 2006). Securities Act [15 U.S.C. 77r], which, in part, limits
commenter expressed hope that Æ Permitting filers to identify all Æ Permitting a limited amount of free
companies would continue to be able to issuers in a multiple-issuer offering in writing in ‘‘clarification’’ fields to the
file a Form D notice with a particular one Form D filing; extent necessary to clarify certain
state or states and not with the Æ Deleting the current requirement to information provided.
Commission where the company is identify as ‘‘related persons’’ owners of The principal changes from the
comfortable relying on the Section 4(2) 10 percent or more of a class of the proposing release include:
exemption from registration at the issuer’s equity securities;
federal level and no federal Form D Æ Replacing the current requirement • Permitting free writing to clarify
would be required.41 We have to provide a business description of the responses to a total of five requests for
considered these comments and will issuer with a requirement to classify the information;
continue to consider them as we work issuer by industry from a pre- • Specifying that amendments to a
with NASAA in an effort to establish established list of industries; previously filed Form D notice are
one-stop filing. Æ Requiring revenue range required only for material mistakes of
4. Improved Collection of Data for information for the issuer, or net asset fact or errors, and not for any mistake
Commission Enforcement and value range information in the case of of fact;
Rulemaking Efforts hedge funds (subject to an option to • Providing additional exceptions
decline to disclose);
The conversion to electronic filing of from changes that otherwise would
Æ Requiring more specific
Form D information through the Internet require amendments to a previously
information on the registration
in an interactive data format will result filed Form D notice;
exemption claimed by the issuer in the
in creation of a database of Form D Form D notice as well as information on • Requiring an annual amendment to
information and allow us and others to any exclusion claimed from the a Form D notice only if an entire
better aggregate data on the private and definition of ‘‘investment company’’ calendar year has passed since the last
limited offering securities markets and under the Investment Company Act of filing, and not every year between
the use of the various Regulation D 1940 (‘‘Investment Company Act); 42 January 1 and February 14; and
exemptions. Further, the software we
will use for the Form D electronic filings
Æ Requiring reporting of the date of • Requiring expense and use of
first sale in the offering; proceeds information on amounts paid
will require that filers address each Æ Specifying when amendments to a
required data field in the form, thus for sales commissions, finders’ fees, and
previously filed Form D notice are payments to executive officers, directors
reducing incomplete filings. Because of required by reason of mistakes of fact,
these and other features, our Form D and promoters, instead of eliminating
errors or changes to information in a those requirements.
electronic filing system should assist in previously filed notice or the passage of
our enforcement efforts and enhance our a calendar year; II. Discussion of Amendments
ability to use filed Form D information. Æ Requiring reporting of whether the
The Form D information database will As noted above, we believe the
offering is expected to last over a year;
allow us to better evaluate our revisions we adopt today will have a
Æ Limiting reporting of the minimum
exemptive schemes on a continuing positive effect in many areas of interest
investment amount accepted in the
basis in order to facilitate capital to the Commission, state securities
offering to the amount accepted from
formation in a manner consistent with regulators, investors, and companies
outside investors, so as not to affect
investor protection. The evaluation that rely on Regulation D exemptions.
employee stock ownership incentive
could lead to improvements that would The revisions generally involve
plans adversely;
result in significant benefits to simplifying Form D, easing the burdens
Æ Requiring CRD numbers for both
companies that rely on the Regulation D of complying with the requirements of
individual recipients of sales
exemptions, especially smaller the form, and modernizing the
compensation and associated broker-
companies, as well as benefits to information capture process.
dealers;
investors. For each offering of securities that is
Æ Replacing the current requirement
C. Summary of Adopted Amendments to disclose information on a wide made without Securities Act registration
In sum, the amendments will: variety of expenses and applications of in reliance on a claimed exemption
• Mandate electronic filing of Form D proceeds with a requirement to report under Regulation D, the issuer must file
information: expenses only as to amounts paid for the information required by Form D
Æ After a phase-in period during sales commissions and, separately with the Commission no later than 15
which electronic filing will be stated, finders’ fees, and report use of days after the first sale of securities. The
voluntary; and proceeds only as to the amount of form calls for issuers to provide basic
Æ Through an online filing system proceeds used to make payments to identifying information and
that will executive officers, directors and fundamental information about the
■ Be accessible from any computer with promoters; offering. Some of the requirements of
Internet access; and Æ Replacing the current federal and Form D have become outdated with the
■ Capture and tag data items, so that the state signature requirements with a passage of time since the Commission
data will be interactive and viewable in combined signature requirement that adopted them. Further, some of the
an easy-to-read format; and includes an undertaking to provide current form’s requirements and
• Revise Form D’s information offering documents to regulators on instructions could be clarified and made
requirements by: request (subject to applicable law), a less burdensome. The revisions we
consent to service of process and a
adopt today address these issues. In

the authority of the states to regulate offers and certification that the issuer is not addition, the move to electronic filing
sales of securities exempt under ‘‘rules or disqualified by rule from relying on an necessitates several modifications. We
regulations issued under section 4(2)’’ of the Act [15
U.S.C. 77d(2)], which includes Rule 506 but not
exemption claimed; and generally are adopting the amendments
Rules 504 or 505 of Regulation D. substantially as proposed. Where we are
41 See letter from ABA. 42 15 U.S.C. 80a–1 et seq. not, we so note below.
A. Amendments To Form D Content Although we proposed to add to the information. One commenter asked that
Requirements form a requirement to supply the an issuer be permitted to provide a
issuer’s Commission file number, if any, ‘‘care of’’ address because mail might
Currently, Form D requires we have decided not to adopt that not otherwise be delivered to the issuer
presentation of preliminary and other requirement. We believe requiring the where, for example, the issuer operates
information required by five sections Commission file number would add a out of another entity’s office and a
designated ‘‘A’’ through ‘‘E.’’ The burden but would provide limited separate address listing is precluded by
revisions organize the information benefits because most Form D filers are lease restrictions or practical
requirements around 16 numbered nonpublic companies and, as a result, concerns.53 We acknowledge the
‘‘items’’ or categories of information. would not have a Commission file concern, but reiterate our statement in
Instructions at the end of the form number. Furthermore, it is possible to the proposing release that this
explain the requirements for each item. use other required information to aid in information is not collected for mailing
On the online form, terms and items at identifying issuers. purposes. The purpose of this
the front of the form will be linked to With regard to identifying issuers, two information is to allow securities
the instructions at the back, which will commenters responded to our enforcement authorities to determine
be available immediately by clicking on solicitation of comment on whether the location of the issuer’s operations
a particular term or item. In this regard, Form D should require CUSIP numbers and personnel responsible for the
we are adding to the General and trading symbols. One commenter offering. Post office box numbers and
Instructions a sentence that provides favored adding such a requirement in ‘‘care of’’ addresses do not provide this
that terms used but not defined in the order to help parse information and information. In instances in which lease
form that are defined in Rule 405 43 or facilitate automating filing notices.48 restrictions or other practical concerns
Rule 501 44 have the meanings given to The other commenter, however, arise, the issuer must make
them in those rules. The sentence will opposed adding the requirement as arrangements to provide acceptable
clarify the application of Rule 501 and, burdensome to issuers and resulting in place of business and contact
to the extent it defines the term information that is not useful.49 We information.
‘‘promoter,’’ Rule 405.45 believe that the system’s data tagging The revised form will differ from the
1. Basic Identifying and Contact features will facilitate parsing proposed form as to place of business
Information information and obtaining filing notices and telephone contact information. The
to such an extent that the burden of proposed version would have required
New Form D generally carries over the requiring CUSIP numbers and trading place of business and telephone contact
requirements from current Form D for symbols would not be justified by the information in a multiple-issuer offering
basic identifying and contact benefits to be gained. only for the primary issuer and would
information and information about In response to a comment letter,50 we not have permitted such information for
related persons, but modifies or omits have provided a place to identify an the other issuers. In the proposing
some of these types of requirements. issuer as ‘‘yet to be formed’’ instead of release, we reasoned that issuers in
The requirements carried over, however, providing a year of organization. The multiple-issuer transactions typically
are restructured to reflect the electronic current Form D provides this have the same place of business, and we
character of the filing. alternative. generally do not need more than one
Item 1, similar to current Form D, Two commenters expressed concern address to contact the responsible
requires basic identifying information, as to whether a filer would be able to personnel for enforcement purposes. In
such as the name of the issuer of the specify its particular foreign place of this regard and upon further
securities, any previous names, the type incorporation or organization rather consideration after reviewing the public
of legal entity and the issuer’s year and than just be able to indicate that the comment letters, we have decided that
place of incorporation or organization.46 location is foreign.51 We confirm that the revised form will differ in one
We are revising the form to provide the online filing system will enable respect—it will permit, but not require,
specifically for the identification of issuers to specify particular foreign such information for issuers other than
multiple issuers in multiple-issuer jurisdictions. the primary issuer in a multiple-issuer
offerings. Form D currently does not Item 2, similar to current Form D, offering. In so revising the form, we
provide for this, sometimes raising requires filers to provide place of believe we address the concerns
questions as to how multiple-issuer business and telephone contact expressed by two commenters. One
offerings should be reported.47 information.52 commenter asked that we require such
The revised form will include information for all the issuers in
43 17 CFR 230.405. instructions to clarify that post office multiple-issuer offerings to
44 17 CFR 230.501. box numbers and ‘‘care of’’ addresses accommodate states that currently
45 One commenter expressly supported defining
are not acceptable as place of business require a separate Form D from every
the term ‘‘promoter’’ in the instructions. See letter issuer in a multi-issuer offering, or
from Connecticut.
46 Issuers will specify their legal entity type (e.g., support multiple-issuer filings. As a result, all alternatively, that we require a separate
issuers easily can be identified in a single filing. Form D from each of the issuers.54 The
corporation or limited partnership). 48 See letter from Pink Sheets LLC.
47 Currently, the Form D instructions do not other commenter asked that we permit
49 See letter from ABA.
specify whether all issuers in a multiple-issuer
50 See id.
multiple issuers to provide separate
offering can be listed in the same Form D notice or addresses to avoid the implication that
51 See letters from ABA and Connecticut.
whether each issuer must submit essentially the
same notice. In this situation, the staff currently 52 Some information of the type that Items 2 and issuers are affiliated when they are
advises each issuer to submit a separate Form D 3 require will automatically appear in appropriate not.55 We believe these concerns are
notice because the filings are retrievable in our places when the filer accesses the new online filing adequately addressed by permitting all
filing system only by reference to the name of one system. The system will replicate information issuers to provide the information
issuer. The changes clarify the requirements of this provided by the filer in the course of obtaining the
item and eliminate the burden on issuers to file identifying information needed to access the new
what are essentially duplicate notices in order to online filing system or in updating such
54 See letter from Pennsylvania.
comply with the requirement to file Form D information. The filer will be able to make changes
information. The new online filing system will to such information. 55 See letter from ABA.
because that enables issuers that are additional privacy concerns for these and directors based on the functions
filing with states that otherwise would companies as they seek to raise capital people perform rather than their titles.
require separate Forms D to include the through a private offering.60 Issuers are required to report the names
information if they wish to avoid filing Two commenters explicitly supported and addresses of promoters whether
the separate forms, if permitted by state the proposal to delete the requirement they act directly or indirectly.67 We
law. to report publicly the names and have modified the instructions to Item
One commenter asked that Form D addresses of 10 percent or greater equity 3 slightly from the language proposed to
require the name of a contact person for holders.61 Both commenters cited clarify these requirements. As a result,
the primary issuer and any other issuers privacy concerns. One of the the requirements should result in public
in a multiple-issuer offering.56 The commenters also stated that individual reporting of all of a company’s principal
commenter stated that contact might be investors would have access to the policymakers.
necessary in connection with the filing information to the extent relevant and As proposed, we are deleting the
itself or in regard to litigation or omitting the information would save requirement that issuers provide the
enforcement or for other purposes. We time and eliminate filing burdens.62 name of the offering in Form D if the
believe, however, that address and Four commenters objected to the offering has a name. In so proposing, we
telephone number information would be proposal to delete the requirement to stated that naming offerings reported on
sufficient to make an initial contact and disclose 10 percent or greater holders, Form D is not as common today as it
that it should be possible to proceed citing the usefulness of the information was before the 1986 tax reforms,68 when
from that point to locate the most and, in some cases, questioning the the current Form D requirement was
appropriate person based on the nature validity of privacy concerns.63 These adopted. We understand that some
of the contact. commenters asserted, in essence, that issuers have found this requirement to
Item 3, similar to current Form D, the information is useful to: be unclear. For these reasons, we are
requires information about related • State regulators because, for deleting the requirement.
persons (executive officers, directors, example, it enables them to determine 2. Additional Information About Issuer
and promoters).57 As proposed, whether the specified persons are
however, we are deleting the current disqualified from conducting an offering Item 4 of the new Form D requires
requirement that issuers identify as or have an enforcement history that issuers to identify their industry group
‘‘related persons’’ owners of 10 percent warrants additional information and from a specified list. The requirement to
or more of a class of their equity disclosure; 64 provide industry group information
securities.58 In so proposing, we • The general public because it replaces the current requirement in
reasoned that reveals the investment activity of public Form D to provide a description of the
• Investors should continue to have sector entities; 65 and issuer’s business.69 We believe simply
access to this information, if it is • Investors because this degree of selecting an industry group
material, in the private placement ownership control is material and it classification from a pre-established list
memorandum customarily supplied to cannot be assumed this information will is less burdensome for issuers and more
them or in other information made useful for the regulatory purposes
be provided even if material, especially
available through the issuer; 59 underlying the Form D filing
where disclosure or fraud may be an
• We believe we can collect sufficient requirement. The industry group
issue.66
information to satisfy the regulatory classifications will provide us better,
We have considered the differing
objectives of Form D by requiring only and more easily retrievable, information
views on whether to retain the
the identification of executive officers, about industries and offerings where we
requirement to report publicly the
directors, and promoters; and may have identified policy issues.70 As
names and addresses of 10 percent or
• Issuers that are not reporting proposed, if a company selects the
greater equity holders. We still believe
companies have raised privacy concerns ‘‘Pooled Investment Fund’’ option, pop-
it is appropriate to delete the
with respect to the requirement to up or other data fields will require the
requirement for the reasons discussed
identify 10 percent equity owners who issuer also to select from among lower
above and in the proposing release. In
are not executive officers, directors, or level options designating a specific type
this regard, we note that Item 3 will
promoters because they do not already continue the current Form D 67 The words ‘‘directly or indirectly’’ are used in
have to disclose this information, and requirement to report executive officers the applicable definition of the term ‘‘promoter’’ in
the widespread availability of the Rule 405.
information on our Web site may raise 60 As we stated in the proposing release, from 68 Tax Reform Act of 1986, Pub. L. 99–514, 100
time to time issuers have asked us to grant Stat. 2085 (Oct. 22, 1986).
69 The industry group list in the new form differs
56 See letter from NASAA. confidential treatment to this information under
57 The Securities Act Rule 406 [17 CFR 230.406], but we from the one in the proposing release primarily in
instructions to Item 3 clarify that two ways. First, the new form’s list provides for
have denied such requests consistently because the
disclosure will be required of each person who has additional choices under the heading ‘‘Energy’’ in
information currently is required by Form D. We
functioned as a promoter of the issuer within the order to reduce the number of issuers that would
estimated in the proposing release that about 95
past five years of the later of the first sale of need to choose the less helpful alternative of ‘‘Other
percent of the companies filing Form D notices in
securities or the date upon which the Form D filing Energy.’’ Second, the new form’s list omits the
2006 were private companies, which frequently are
was required to be made. specific choices that had been under the heading
58 We also are revising Item 3 to enable an issuer
not required to make public the names of their
equity owners in accordance with the laws of the ‘‘Business Services’’ because we believe greater
to clarify its response. This change is discussed state or other jurisdiction of their organization. specificity is not necessary for issuers in that
more fully in Part II.C below. 61 See letters from ABA and MFA. industry group.
59 Under some circumstances, an issuer must 70 The instruction to Item 4 provides that an
provide, rather than merely make available, 63 See letters from Chris Evans (claiming to
issuer or issuers that can be categorized in more
beneficial holder information. For example, an than one industry group should be categorized
issuer that offers securities to non-accredited represent the views of the vast majority of news
based on the industry group that most accurately
investors without registration under the Securities organizations), Massachusetts, NASAA and
reflects the use of the bulk of the offering proceeds.
Act in reliance on an exemption provided by Rule Pennsylvania. The instruction also provides that, for purposes of
64 See letters citing one or more of these examples
505 [17 CFR 230.505] or 506 [17 CFR 230.506] must responding to Item 4, the issuer should ‘‘use the
provide beneficial holder information under the from Massachusetts, NASAA and Pennsylvania. ordinary dictionary and commonly understood
65 See letter from Chris Evans.
circumstances specified by Rule 502(b) [17 CFR meanings of the terms identifying the industry
230.502(b)]. 66 See letters from Massachusetts and NASAA. groups.’’
of pooled investment fund and to select and some other types of pooled Section 4(6), as applicable. This
between ‘‘yes’’ and ‘‘no’’ as to whether investment funds. requirement, in general, is carried over
the issuer is registered as an investment One commenter suggested that we from the current Form D requirement
company under the Investment eliminate the ‘‘Decline to Disclose’’ with added specificity, requiring the
Company Act. option from the proposed revenue range issuer to identify the specific paragraph
We proposed that Item 5 would requirement 74 and another suggested or subparagraph of any Rule 504
require all issuers, regardless of industry that we eliminate the revenue range exemption being claimed as well as any
group, to either include revenue range requirement entirely.75 The commenter specific paragraph of Investment
information in the Form D filing or that suggested we eliminate the Company Act Section 3(c) 78 that the
choose the ‘‘Decline to Disclose’’ option, ‘‘Decline to Disclose’’ option reasoned issuer claims for an exclusion from the
which might be used if a private that elimination would be necessary to definition of ‘‘investment company’’
company considered its revenue range make the requirement effective as an under the Investment Company Act.79
to be confidential information.71 We information collection tool. The We are requiring this increased level of
further proposed that, if the business commenter that suggested that we specificity and additional type of
were not intended to produce revenue, eliminate the requirement entirely information in order to assist our
such as a fund that seeks asset reasoned that many companies will opt policymaking and rulemaking efforts in
appreciation, it could select the ‘‘Not out, reducing the integrity of the various areas. Identification of a claimed
Applicable’’ option. We continue to information collected and possibly exemption or exclusion often is key to
believe that this information will help causing people to draw negative analysis of the appropriateness of the
us to determine the types and sizes of inferences about the company. The claim. State securities regulators also
most issuers that rely on the Regulation commenter went on to state that use this information to determine the
D and Section 4(6) exemptions. For revenue information is not necessary for extent of their jurisdiction over the
instance, as noted in the proposing a notice filing, and requiring it is offering under NSMIA. Unlike the
release, this information will increase inconsistent with the prohibition on requirement in current Form D,
significantly the effectiveness of the general solicitation and general however, Item 6 does not enable the
data collected as a tool for assessing the advertising that applies to many issuer to check a box to indicate a claim
use of the Regulation D exemptions for offerings required to be reported on to the Uniform Limited Offering
small businesses and other different Form D.76 We recognize that adopting Exemption (ULOE) from state securities
sizes of issuers. the ‘‘Decline to Disclose’’ option will law requirements. We believe that the
We are adopting Item 5, as proposed, reduce the amount of information that ULOE box causes confusion and
except as it will apply to issuers that we receive. We also recognize, however, burdens for companies completing Form
classify themselves in Item 4 in the that some companies may regard this Ds without resulting in a significant
industry group ‘‘hedge funds’’ or as type of information as confidential. amount of useful information. Most, if
pooled investment funds other than Weighing these countervailing not all, companies claiming a ULOE
venture capital and private equity considerations in light of the exemption also will check the Rule 505
funds. In order to obtain information on importance of the information, we box, because Rule 505 is the
the size of these issuers, Item 5 will believe that, on balance, it is best to Commission’s companion exemption to
request them to provide aggregate net provide filing companies the option to the ULOE exemption.80 Similarly,
asset value range information.72 decline to disclose their revenue range. revised Form D omits all other
Consistent with the revenue range Commenters did not specify any references to ULOE and the provisions
requirement applicable to other issuers, negative consequences that a company that, in general, require specified
however, these issuers will be given the may suffer if it chooses to decline to information on a state-by-state basis in
option to ‘‘Decline to Disclose’’ that disclose its revenue range. We believe an appendix to the form and require
information or to specify that such the information will be useful for the specified representations and
information is ‘‘Not Applicable.’’ This reasons described above. Finally, we undertakings. We believe that this
addition responds to a comment letter believe that revenue information in information is burdensome to provide
stating that ‘‘assets under management’’ range form would not likely itself, or in without sufficient benefits in terms of
is a more meaningful measure of the combination with the other information furthering the purposes of Form D.81
size of such issuers than revenues.73 We the new form requires, raise general One commenter supported our
believe we can obtain adequate size solicitation or general advertising proposal to delete the appendix portion
information about venture capital and issues. of current Form D, asserting that it is
private equity funds from the burdensome and without sufficient
3. Identification of Claimed Exemptions
information on the total offering amount benefits, but two other commenters
and Exclusions
supplied in response to Item 13, because objected.82 Another commenter, without
these types of funds typically do not Item 6 requires the issuer to identify
engage in continuous offerings of the exemption or exemptions being 78 15 U.S.C. 80a–3(c).
indefinite amount, unlike hedge funds claimed for the offering, from among 79 The issuer will be able to select all the
Rule 504’s 77 paragraphs and exclusions on which it relies. Regulation D provides
an exemption from the Securities Act and not an
71 The revenue range will be for the most recently subparagraphs, Rule 505, Rule 506, and exclusion from the definition of the term
completed fiscal year. Where an issuer has been in ‘‘investment company’’ under the Investment
existence for less than a year, it will identify its 74 See letter from NASAA. Company Act. Some companies that use a
revenues to date. 75 See letter from ABA. Regulation D exemption, however, also are
72 The aggregate net asset value will be requested 76 See id. The ABA also stated that the form excluded from the definition of investment
as of the most recent practicable date. should not require asset value information for company under the Investment Company Act.
73 See letter from MFA. Similarly, in commenting 80 See Release No. 33–7644 (Feb. 25, 1999) [64 FR
essentially the same reasons. A third commenter
on Rel. No. 33–8766 (Dec. 27, 2006) [72 FR 399], asked whether most private companies would 11090].
another commenter stated that it believed it would decline to disclose, ‘‘thus calling into question the 81 One commenter expressed general agreement
be useful to the Commission and investors if Form purpose of [the item].’’ The commenter did not with our views regarding ULOE. See letter from
D would require information on pooled investment suggest deleting the option to decline or deleting ABA.
funds’ assets under management. See letter from the entire requirement. See letter from Connecticut. 82 See letters from ABA, Chris Evans and
CPIC. 77 17 CFR 230.504. Connecticut, respectively.
expressly addressing the appendix, 4. Indication of Type of Filing date itself in relation to the date of
suggested that the form require related a. General Requirements filing.
information.83 One commenter objected Two commenters objected to using
to deleting any part of the appendix, New Item 7 carries over the current the date of first sale as the trigger for the
claiming that the information required Form D requirement to indicate whether Form D filing deadline.90 Both
provides macro-level ownership the filing is a new filing or an commenters based their objection on the
information valuable to the Commission amendment. Including identification of Commission staff’s previously stated
and other regulators in analyzing fund a filing as new or an amendment is view that, solely for purposes of
appropriate because the form permits triggering the Form D filing
flows and capital sources in an
amendments and issuers may have valid requirement, in a minimum-maximum
otherwise opaque area.84 One
reasons to wish to update or correct offering where the subscription funds
commenter stated that it did not are held in escrow pending receipt of
information previously provided in a
advocate retaining the appendix in its minimum subscriptions, the date of first
Form D filing. In addition, as discussed
current form but that the appendix sale occurs when the first subscription
in the section immediately below, we
requires information such as the amount intend to clarify the circumstances agreement is received and first funds are
of securities sold by state and the where amendments are required. As deposited into escrow.91
number and type of investors proposed, Item 7 requires that a new We believe that the cited
(accredited/non-accredited) that is filing specify the date of first sale or interpretation of the date of first sale is
useful to state regulators for indicate that the first sale has yet to correct for purposes of triggering the
enforcement purposes.85 Finally, one occur. We believe that this information Form D filing requirement. We believe
commenter offered the related will be useful to regulators because it the interpretation appropriately focuses
suggestion that the form should require relates to the timeliness of the filing and on when the purchaser makes an
issuers to specify the states in which helps to establish a context in which to investment decision and commits to
they propose to offer or sell securities evaluate other information provided. purchase the securities offered. We also
because that would provide useful Item 7 will differ from what we believe that it can be useful for
information to state regulators in their regulatory purposes if an issuer files a
proposed in that it will not permit an
efforts to uncover notice filing Form D before an offering closes to
issuer to designate the states to which
violations and other problems.86 enable regulators to consider the
the Form D is directed. As more fully
information provided before the offering
We believe the burden that would be discussed above, our system will not be
process ends. If regulatory action is
imposed by a requirement to provide all capable of receiving filings directed to
appropriate, earlier consideration
information called for by the appendix specific states when new Form D
potentially could cause it to be more
or similar information is not justified by becomes effective for federal purposes,
timely and effective.92 We have added
although we have been working actively
the value of the information in language to the instructions to Form D
with NASAA in an effort to achieve that
furthering the purposes of Form D. In clarifying this meaning of date of first
capability.88 In the interim, we expect
this regard, under appropriate sale in accordance with this
that filers will direct filings to the states
circumstances, state regulators still interpretation. Specifically, the
by mail, overnight delivery, fax or
would be able to require this type of instructions will state that the date of
whatever means are permitted or
information.87 At present, the first sale is the date on which the first
required by the respective states. We
Commission does not require filing of investor is irrevocably contractually
expect that some states may permit
information called for by the appendix, committed to invest, which, depending
issuers to file a printed copy of a new
and most Form D filers do not file the on the terms and conditions of the
Form D filed with us.
appendix with us. They file appendix contract, could be the date on which the
One commenter objected to adding issuer receives the investor’s
information only with those states that the requirement to report date of first
require it. We assume that states that subscription agreement or check.
sale information.89 The commenter
require filing of appendix information asserted that the definition of ‘‘first b. Amendment of Previously Filed Form
that they are entitled to require may sale’’ is unclear and a failure to file in D
continue to do so. We also assume that the timeframe Form D requires may be As proposed, we are clarifying Form
the one-stop filing system that we are used by states to extract late filing D to address when, how, and why an
exploring with NASAA may facilitate penalties or attempt to circumvent the amendment to a Form D may or must be
the filing of this information with state limits NSMIA imposes by claiming that filed. Those issues are not addressed
regulators. an exemption under Rule 506 is expressly in the current form. While
unavailable due to non-compliance with both Rule 503 and the instructions to
83 See letter from Massachusetts. the filing requirement of Rule 503(a), the current Form D discuss the
84 See letters from Chris Evans. even though filing a Form D is not a information that is required when an
85 See letter from Connecticut.
condition to an exemption under amendment is filed,93 neither explicitly
86 See letter from Massachusetts.
87 We note that, even where NSMIA applies,
Regulation D. We believe, however, that
Section 18(c)(2)(A) of the Securities Act [15 U.S.C.
providing the date of first sale involves 90 See letters from ABA and Society of Corporate
77r(c)(2)(A)] generally provides as to the offer and little burden and that it is not the Secretaries and Governance Professionals (SCSGP).
91 See Release No. 33–6455, at Question 82 (Mar.
sale of non-exchange-listed securities that nothing reporting of the date that underlies the
under Section 18 prohibits ‘‘any State from 4, 1983) [48 FR 10045].
state-related concerns but rather the 92 For example, one commenter noted that state
requiring the filing of any document filed with the
Commission [under the Securities Act], together regulators use Form D information for screening
88 We had proposed to permit issuers to designate purposes to help prevent offerings by those subject
with annual or periodic reports of the value of
securities sold or offered to be sold to persons the states to which the Form D is directed, on the to disqualification and aid enforcement efforts. See
located in the State (if such sales data is not assumption that some states would adopt one-stop letter from NASAA.
included in documents filed with the Commission), filing and allow filings that specify that they are 93 Current Rule 503(d) states that amendments to
solely for notice purposes and the assessment of directed to those states to constitute filings with Form D ‘‘need only report the issuer’s name and the
any fee, together with a consent to service of those states. information required by Part C and any material
process and any required fee.’’ 89 See letter from ABA. Continued
requires the filing of an amendment. In change, together with all other changes Æ The minimum investment amount,
certain offerings and situations, in that amount since the previously if the change is an increase, or if the
however, an issuer may have made a filed notice, does not result in a change, together with all other changes
material mistake of fact or committed decrease of more than 10%; in that amount since the previously
another material error in the filed Form Æ Any address or state(s) of filed notice, does not result in a
D. Situations also arise where changes solicitation shown in response to Item decrease of more than 10%;
occur and the initially filed Form D may 12 of Form D; Æ Any address or state(s) of
not be an accurate expression of the Æ The total offering amount, if the solicitation shown in response to Item
current facts in an ongoing offering. Our change is a decrease, or if the change, 12 of Form D;
staff currently interprets Rule 503 and together with all other changes in that Æ The total offering amount, if the
the Form D instructions to require amount since the previously filed change is a decrease; 96
amendments in ongoing offerings where notice, does not result in an increase of Æ The amount of securities in the
there has been a material change in more than 10%; offering that remain to be sold; 97
information filed about the offering and Æ The amount of securities sold in the Æ The total number of investors who
where basic information previously offering or the amount remaining to be have invested in the offering; 98
submitted about the issuer has Æ The amount of sales commissions,
sold;
materially changed. finders’ fees or use of proceeds for
Æ The number of non-accredited
The staff has received questions payments to executive officers, directors
investors who have invested in the
regarding offerings of extended or promoters, if the change is a decrease,
offering, as long as the change does not
duration, and how to determine whether or if the change, together with all other
increase the number to more than 35;
and how to file Form D amendments. changes in that amount since the
Æ The total number of investors who
For example, when offerings are previously filed notice, does not result
have invested in the offering;
expected to continue for an extended in an increase of more than 10%; 99
Æ The amount of sales commissions, • Require amendments to report the
period, the Commission’s staff often is finders’ fees or use of proceeds for
asked to assist issuers in determining addition of executive officers, directors
payments to executive officers, directors and promoters in all offerings, and not
how to calculate an offering’s aggregate or promoters, if the change is a decrease,
offering price and when an amendment provide an exception from this
or if the change, together with all other requirement for offerings that last more
to the Form D should be filed. The changes in that amount since the
staff’s practice in this regard has been to than a year in some circumstances; and
previously filed notice, does not result • Prescribe that annual amendments
advise issuers to use a good faith and in an increase of more than 10%; and
reasonable belief standard to calculate are due on or before the first anniversary
• Annually, on or before the first of the most recently filed Form D filing
the aggregate offering price and to anniversary of the filing of the Form D
amend the Form D annually. or amendment, if the offering is
or the filing of the most recent continuing at that time, rather than each
We are revising Rule 503 and the amendment, if the offering is continuing
instructions to and description of Form year between January 1 and February
at that time. 14.
D to require amendments to the Form D Rule 503 also will require an issuer
notice in the following three instances that files an amendment to provide for changes in issuer size that relates to both
only: current information in response to all revenue and aggregate net asset value to conform
• To correct a material mistake of fact the exception to new Item 5. As previously
requirements of Form D regardless of
or error in the previously filed notice (as discussed, new Item 5, as adopted, requests that
why the amendment is filed. We believe issuers provide either their revenue range or
soon as practicable after discovery of the
it will be relatively easy to provide such aggregate net asset value, depending on their
mistake or error);
• To reflect a change in the current information in most instances industry group.
96 We had proposed an exception for a change in
information provided in a previously due to the form’s streamlined
the total offering amount, if the change, together
filed notice (as soon as practicable after information requirements, the with all other changes in that amount since the
the change), except that no amendment likelihood that much of the information previously filed notice of sales on Form D, would
is required to reflect a change that would not require change, and the fact not result in an increase of more than 10%. We
believe that decreases in the total offering amount
occurs after the offering terminates or a that the new online filing system will need not trigger an amendment requirement.
change that occurs solely in the make available to the issuer the version 97 We had proposed an exception for a change in
following information: 94 of the Form D to be amended to enable the amount of securities sold in the offering. An
Æ The address or relationship to the the issuer to respond only to the exception is similarly appropriate for the amount of
changed items. securities that remain to be sold because that
issuer of a related person identified in amount varies inversely with changes in the
response to Item 3 of Form D; The amendment requirements differ amount of securities sold.
Æ An issuer’s revenues or aggregate from what we proposed in that they 98 We had proposed an exception for changes in
net asset value; will: the number of accredited investors who have
Æ The minimum investment amount, • Provide expressly that a mistake of invested in the offering consistent with proposed
Item 14’s requiring a report of the number of
if the change is an increase, or if the fact or error in the information provided accredited investors who have invested in the
in a previously filed notice only offering. We are adopting the exception relating to
change in the facts from those set forth in Parts A requires an amendment when material; the total number of investors rather than the
and B.’’ The current instructions to Form D set forth • Provide exceptions for changes in: number of accredited investors to conform the
the information required in an amendment as only exception to new Item 14. New Item 14, as adopted,
‘‘the name of the issuer and offering, any changes Æ The address or relationship to the requires disclosure of the total number of investors
thereto, the information requested in Part C, and issuer of a related person identified in rather than the number of accredited investors who
any material changes from the information response to Item 3 of Form D; have invested in the offering.
previously supplied in Parts A and B.’’ Æ An issuer’s aggregate net asset 99 We believe that the additional specified
94 We believe the specified changes should not exceptions should not require an amendment
require an amendment because the burden would value; 95 because, similar to the other exceptions proposed
not justify the resulting benefits in terms of and adopted, the burden would not justify the
furthering the purposes of the form. Consequently, 95 We had proposed an exception for changes in resulting benefits in terms of furthering the
it is not necessary to report them for Form D to issuer size as measured by revenue consistent with purposes of the form. Consequently, it is not
serve its primary function as a notice of an exempt proposed Item 5’s requesting that issuers provide necessary to report them for Form D to serve its
offering. their revenue range. We are adopting an exception primary function as a notice of an exempt offering.
We have expressly subjected the most instances due to the form’s Upon further consideration, we believe
mistake of fact or error in information streamlined information requirements, the exception for offerings that last more
amendment requirements to a the likelihood that much of the than a year may permit easy
materiality standard in response to information would not require change, circumvention of the intent of the
comments received to make explicit and the fact that the new online filing requirement. As adopted, the rule
what we intended.100 We have required system will make available to the issuer amendments will require a Form D
amendments upon the addition of the version of the Form D to be amendment upon the addition of any
related persons (executive officers, amended to enable the issuer to respond related person, but will not require
directors and promoters) without only to the changed items. We also amendments to report changes of
exception in order to limit the ability to believe that it will be relatively easy to addresses of related persons.
circumvent the purpose of the Form D determine what has changed due to the The same commenter stated that an
notice. We have adopted the one limited amount of information required amendment should not be needed for an
calendar year amendment requirement by the form and the ability to use the issuer to file with an additional state or
to clarify the due date in response to a data tagging features to help determine states during an ongoing offering.111 The
comment 101 and provide flexibility.102 changes. We believe that presentation amendment provisions would not
One commenter supported the only of those items that have changed require an amendment solely because an
amendment provisions as proposed,103 materially would result in information issuer wished to file with an additional
one commenter objected to the being presented out of context and state or states.
requirement that every amendment might transform a relatively light
contain current information,104 one burden on the issuer to a relatively Finally, one commenter suggested
commenter both objected to the annual heavier burden on each user who that the new annual and other
amendment requirement and suggested accesses the information. amendment rules not apply to paper
changes in the other amendment The commenter that objected to the Form D filings, asserting that, as to such
requirements 105 and one commenter annual amendment requirement did so filings, filing amendments would be
said that it would be helpful to state primarily based on the commenter’s overly burdensome because there would
regulators to add a requirement to file assertions that it would be inconsistent be no existing electronic version on the
an amendment to report termination of with efforts to ease burdens and system to use as a starting point.112 As
offerings that last over a year.106 simplify. We believe the annual further discussed below, there will be a
The commenter that objected to the amendment requirement viewed in the period during which the amendments
requirement to provide current context of the online filing system we adopt in this release would be
information in every amendment stated generally is consistent with efforts to effective except that electronic filing
that the requirement seems unnecessary, ease burdens and simplify. We believe would be optional rather than
might cause inadvertent errors in re- it will be relatively easy to file annual mandatory for a period of time after the
entering unchanged information and amendments in most instances for the electronic system becomes available.
make it difficult to determine what had reasons discussed above. We also During that time, in general, an issuer
changed.107 The commenter suggested believe that the express annual will be able to file new Form D in either
that, instead, amendments only should amendment requirement is clear and, to paper or electronic format or file current
require information that has changed that extent, will serve to simplify the Form D in paper format. Also during
materially. As discussed above, we form. that time, the new annual and other
believe it will be relatively easy to The commenter that objected to the amendment rules will apply to all new
provide such current information in annual amendment requirement also Form D filings regardless of format and
stated that amendments should not be the current amendment requirements
100 Three commenters suggested that we clarify
required when an issuer adds recipients will apply to all current Form D filings
that only a material mistake of fact or change can of sales compensation or related in paper format. We believe that during
trigger an amendment requirement. See letters from the transition period this approach will
ABA, MFA and SCSGP. We did not add a persons.108 Consistent with the
materiality reference to the amendment provision requirements of the current form, we provide adequate flexibility to issuers
regarding changes in the information reported. We believe that requiring the names of and consistency between the current
believe that such a reference would be additional recipients of sales and new versions of Form D and their
inappropriate because any changes other than those respective amendment requirements.
specified as not requiring an amendment would be compensation and related persons is
information regulators need to perform their appropriate for a notice form and Once the transition period ends, all
regulatory functions. provides important information about federal filings will be required to be on
101 One commenter stated that the due date for
the offering for regulatory purposes. new Form D in electronic format and,
the proposed annual amendment was unclear. See The same commenter essentially accordingly, the new amendment rules
letter from ABA. will apply. We believe that applying the
102 The omission of a January/February filing asked that that the proposed exception
window from the adopted annual amendment from the amendment requirements for new amendment rules at that time even
requirement will provide flexibility by, for example, additions of related persons be as to prior filings of current Form D in
permitting a series of issuers to be placed on the broadened.109 As proposed, in offerings paper format would not create a
same administratively convenient annual significant additional burden due to the
amendment schedule in which they file outside of
that last more than a year, a change in
the January/February window proposed to be information on related persons would lack of a previous electronic version on
mandated. not trigger an amendment, if the change the system and that confusion likely
103 The commenter stated that the amendment
was due solely to the filling of a vacant would result from the lack of a uniform
requirements would ensure that available position upon the death or departure in approach to post-transition period
information would be relatively current and enable amendments that itself could impose a
state regulators to screen, and provide responses to the ordinary course of business of the
the public regarding, offerings conducted in their previous occupant of the position.110 burden.
states more effectively. See letter from NASAA.
104 See letter from SCSGP. 108 See letter from ABA. with a change in control would not be in the
105 See letter from ABA. 109 See ordinary course of business.
letter from ABA.
106 See letter from Connecticut. 110 For example, a change in information 111 See letter from ABA.
107 See letter from ABA. regarding related persons that occurs in connection 112 Id.
5. Information About Offering requirement because offerings that have to a broker or broker-dealer’s record
Items 8 through 16 will require factual low minimum investment amounts have located in the Central Registration
information about the offering itself. presented particular enforcement Depository, a computer database of
Most of the information sought challenges in the past. We have changed brokers and broker-dealers that FINRA
currently is required by Sections B and Item 11 from what we proposed to maintains. It should be relatively easy
C of Form D. require specification of the minimum for an issuer to obtain the CRD numbers
Duration of Offering. Item 8 will investment for outside investors only, so from the brokers and broker-dealers it
require the issuer to indicate whether it as not to affect employee stock retains. We have added instructions to
intends that the offering will last over a ownership incentive plans adversely. Form D informing filers where to obtain
year. Such information currently is not Investors will be considered outside CRD numbers on the Internet.119
specifically required by Form D. The investors if they are not employees, Requiring reporting of the CRD numbers
absence of an information requirement officers, directors, general partners, will facilitate checking a broker’s or
of this type has presented compliance trustees (where the issuer is a business broker-dealer’s records. Requiring
questions because regulators may not trust), consultants, advisors or vendors reporting of the CRD numbers of listed
know whether an offering may span an of the issuer, its parents, its majority- persons as well as any associated
extended period of time based on the owned subsidiaries, or majority-owned broker-dealers will enhance the
information currently required by Form subsidiaries of the issuer’s parent.116 We informational value of the item.
D. believe that low investment amounts are Two commenters supported requiring
Type of Securities Offered. Item 9 will more likely to present enforcement CRD numbers in particular,120 while
carry over the current requirement to challenges when offered to outside one commenter objected to Item 12 as
specify the type of securities being investors, and have changed the proposed, stating that the item could
offered, such as debt or equity, with requirement as a result. discourage users from using Regulation
additional categories of securities Sales Compensation. Item 12 D, should not require the names of
added. Some of the additional categories generally will carry over but simplify individual recipients of sales
will provide more clarity. The rest of the the response to the requirements in compensation and, if it did require their
additional categories will identify types Form D related to information on sales names, it should not require their CRD
of securities, the specification of which compensation, as we proposed. In numbers.121 Consistent with current
we believe will help facilitate our addition, also as proposed, it will add Form D’s requirement to name up to five
rulemaking efforts.113 The issuer will be a requirement to provide the CRD persons associated with a particular
required to specify all categories that number of each person that is a broker-dealer that receive compensation
apply to the securities that are the compensation recipient named in in connection with sales of securities in
subject of the exemption(s) specified in response to Item 12, provided the an offering and any associated broker-
response to Item 6. person has a CRD number.117 In dealer, we continue to believe that such
Business Combination Transaction. addition and as a complement to what information is important. Also
Form D currently requires that the we proposed, Item 12 also will require consistent with current Form D’s
issuer indicate only whether the offering that when both a person that receives requirements, we continue to believe
is an exchange offer. New Item 10 will sales compensation and the person’s that it is useful to have the names of
require the issuer to indicate whether associated broker-dealer are reported, individuals regardless of whether they
the offering is being made in connection the issuer must provide the CRD are associated with a broker-dealer.
with a business combination such as an number, if any, for both. Also in Once more than five individuals
exchange (tender) offer, a merger or addition to what we proposed, the associated with the same broker-dealer
acquisition, regardless of the type of instruction to Item 12 will clarify that otherwise would be named, however,
offering.114 We believe that, for the compensation that can result in a the burden of listing additional names
purposes of Form D, it is important to reporting requirement can be cash or does not justify the benefit and it is
identify whether an offering is being other consideration; a finder or other sufficient in that case to have the name
made in connection with a business person that does not have a CRD of the associated broker-dealer alone.
combination transaction, whether number need not obtain one in order to We believe that the new sales
structured as an exchange or in some be listed; and, conversely, a finder or compensation disclosure requirements
other manner, because such transactions other person is required to be listed will not discourage issuers from using
sometimes give rise to policy where called for, regardless whether the Regulation D any more than the current
concerns.115 finder or other person has a CRD sales compensation reporting
Minimum Investment Amount. Item number.118 A CRD number corresponds requirements do. The concern about
11 will, as proposed, carry over the discouraging issuers from using
requirement in Form D to specify the 116 The standard for determining who is an Regulation D appears to be rooted in a
minimum investment amount per ‘‘outside investor’’ is similar to the standard in
Securities Act Rule 701 [17 CFR 230.701] and 12. One commenter suggested that the form clarify
investor. We are maintaining this Securities Act Form S–8 [17 CFR 239.16b] for that cash and non-cash compensation could trigger
determining who is an eligible investor, except that a reporting requirement and not every person has
113 The new categories would be ‘‘Security to be for Form D purposes vendors are included and a CRD number. See letter from Connecticut.
Acquired Upon Exercise of Option, Warrant or certain family members are excluded. Another commenter suggested that the form clarify
Other Right to Acquire Security,’’ ‘‘Pooled 117 The instruction to new Item 12 uses the term that issuers must report the names of persons
Investment Fund Interests,’’ ‘‘Tenant-in-Common ‘‘person’’ rather than the proposed term regardless whether they have CRD numbers. See
Securities,’’ and ‘‘Mineral Property Securities.’’ ‘‘individual’’ to describe the sales compensation letter from NASAA.
114 We also are revising Item 10 to enable an recipients that an issuer must list. The term 119 Anyone with access to the Internet can check
issuer to clarify its response. We discuss this ‘‘person’’ is used in order to clarify that, as intended a broker’s CRD number and record by visiting
change more fully in Part II.C below. in the proposed instruction, new Item 12 carries http://brokercheck.finra.org. CRD numbers also can
115 For example, business combination over the requirement in current Form D that be obtained by calling a state regulator or FINRA’s
transactions may raise some of the types of policy references the term ‘‘person’’ to identify recipients public disclosure hotline at 800–289–9999. See
concerns we intended to address in adopting rules of sales compensation regardless of whether the http://www.nasaa.org/Investor_Education/
and rule amendments relating to filings by reporting recipient is a natural person. Investor_AlertsTips/292.cfm.
120 See letters from Massachusetts and NASAA.
shell companies. Release No. 33–8587 (July 15, 118 We believe this clarification generally would
2005) [70 FR 42234]. be responsive to several comments related to Item 121 See letter from ABA.
concern about regulator background process ends. If regulatory action is amounts.126 Commenters that objected
checks on named persons. In this appropriate, earlier consideration to deleting the requirements essentially
regard, we note that background checks potentially could cause it to be more stated that the information helps to
are possible under the requirements of timely and effective. We also believe enable state regulators to screen
current Form D, and the only additional that issuers have been and will continue offerings for potential problems.127 One
sales compensation requirement under to be able to coordinate their federal of these commenters addressed the
the new form, CRD numbers, merely Form D and state filings without issues of burden and lack of specificity
would facilitate that check. requiring Form D to contain final sale as to use of proceeds information by
Finally, one commenter asked us to information rather than offering suggesting that the form provide more
clarify the extent to which new Item information as of an earlier time. checkboxes but exclude from those
12’s sales compensation recipient Finally, we believe that any checkboxes one that provides for
disclosure requirement will apply to uncertainties as to when to amend will general corporate purposes.128
foreign sales.122 Consistent with be substantially resolved by the We have considered the comments
Preliminary Note 7 to Regulation D, provisions we are adding to the form and, as a result, rather than deleting the
Regulation D’s requirements and, as a requirements. current expenses and use of proceeds
result, Form D’s requirements, including Investors. Item 14 will elicit requirements in their entirety, we are
new Item 12, will apply to foreign sales information on whether the issuer deleting most of them and adopting the
to the extent the issuer seeks to rely on intends to sell securities to persons who rest of them in new Items 15 and 16.
an exemption under Regulation D for do not qualify as accredited investors New Item 15 will require the issuer to
such foreign sales.123 and the number of such persons who provide only the amounts paid for sales
Offering and Sales Amounts. Item 13 already have invested. It will elicit commissions and, separately stated,
will carry over the current requirements information on the total number of finders’ fees in connection with the
to provide the amount of total sales and investors who already have purchased offering. New Item 16 will require
the total offering amount, but in a securities in the offering. The form reporting of the amount of the gross
restructured, simplified format. currently requires this information proceeds the issuer used or proposes to
Instructions have been added to clarify because it affects how we and state use for payments to related persons.129
interpretive issues that have arisen in securities regulators evaluate claimed New Items 15 and 16 will permit
completing the form, such as how to exemptions and allocate enforcement clarification where necessary to prevent
respond to this requirement if the resources. We have modified Item 14 the information supplied from being
amount of an offering is undetermined slightly from the proposed version by misleading.130 Both items will require
when the Form D filing is made.124 One requiring the issuer to specify the total substantially less information relating to
commenter suggested that the form number of investors in the offering, offering expenses and use of proceeds
require a final report of actual sales rather than the number of accredited and, thereby, result in a substantially
results and be due not later than 15 investors, so that examiners can readily reduced burden. The information new
business days after the close of the see that number, rather than being Items 15 and 16 will require is limited
offering.125 The commenter asserted that required to add the numbers of to expenses in connection with the
this would better meet the practical accredited and non-accredited investors, offering process and payments to related
needs of issuers in terms of determining as was the case in the proposed version. persons. We believe that these types of
the trigger date for the Form D filing Expenses and Use of Proceeds of expenses and payments are most likely
requirement, coordinating the filing of Offering. We proposed to eliminate the to be of regulatory interest.
Form D with the Commission with state items requiring information on expenses Consequently, we believe the benefits
filing and fee calculation requirements, and use of proceeds of the offering. The from providing this information will
and determining the need for current requirements frequently do not justify the burdens in relation to
amendments as the sales process yield information necessary for an information necessary for regulatory
proceeds. As previously noted, we evaluation of the claimed exemption or purposes.
believe that it can be useful for for enforcement or rulemaking efforts.
regulatory purposes if an issuer files a Many, if not most, Form D filings do not 6. Signature and Submission
Form D before an offering closes to provide use of proceeds information We are combining the federal and
enable regulators to consider the that serves the form’s purposes, because state signature requirements currently in
information provided before the offering they specify only that the majority of Sections D and E of Form D into one
proceeds will be used for ‘‘working signature requirement. This will
122 See letter from ABA. capital’’ or ‘‘general corporate simplify the filing and make it
123 Preliminary Note 7 to Regulation D provides purposes.’’ In addition, because of the consistent with other signature
as follows: ‘‘Securities offered and sold outside the diversity in use of proceeds in
United States in accordance with Regulation S need requirements of Commission forms. We
not be registered under the [Securities] Act. See Regulation D offerings, attempting to are incorporating into the signature
Release No. 33–6863. Regulation S may be relied standardize responses to provide block a consent to service of process
upon for such offers and sales even if coincident searchable data may be challenging and similar to the one currently in Form U–
offers and sales are made in accordance with
Regulation D inside the United States. Thus, for
not worthwhile. 2, which is required to be filed
example, persons who are offered and sold Commenters expressed mixed views separately but simultaneously with a
securities in accordance with Regulation S would on eliminating the requirements for Form D by many states. Our intention in
not be counted in the calculation of the number of information on expenses and use of
purchasers under Regulation D. Similarly, proceeds proceeds of the offering. One 126 See
from such sales would not be included in the letter from ABA.
aggregate offering price. The provisions of this note, commenter agreed with the 127 See letters from Connecticut, Massachusetts,
however, do not apply if the issuer elects to rely Commission’s view that the information NASAA and Pennsylvania.
128 See letter from NASAA.
solely on Regulation D for offers or sales to persons is not necessary and stated that
made outside the United States.’’ 129 For purposes of new Item 15, ‘‘Related
providing the information is
124 We also are revising Item 13 to enable an Persons’’ are those persons new Item 3 requires the
issuer to clarify its response. We discuss this problematic because of issuer burden, issuer to report in the Form D notice.
change more fully in Part II.C below. lack of applicable accounting standards 130 We discuss the ability to clarify items in Part
125 See letter from Stephen A. Marcus. and category definitions, and estimated II.C below.
making these changes is to maintain the The signature requirement also will to the extent Section 18(c)(1) permits
usefulness of the signature block to differ in several ways from the Form U– them to do so under its preservation of
regulators in a manner that is consistent 2 signature requirement. The principal their anti-fraud authority. Also, we have
with easing burdens on filers. difference between the signature added language to the undertaking
The combined signature requirement, requirement and the Form U–2 specifying that it only applies to written
in general, provides that each issuer signature requirement is that Form U–2 requests made ‘‘in accordance with
signing the revised Form D 131 has read requires the notarized signature of a applicable law.’’
the Form D, knows the contents to be corporate officer (or that person’s The commenter that requested the
true, has duly caused the Form D to be equivalent in the case of other entities) NSMIA-related clarification asked that
signed on its behalf by the undersigned and requires a consent to jurisdiction we clarify the relationship between
duly authorized person, and is 132 and venue as well as a consent to Section 18(c)(2)(A) and the new
• Notifying the Commission and the service of process.135 signature requirement’s consent to
states in which the Form D is filed of Some commenters expressly service provision in particular and
the offering and undertaking to furnish supported a combined signature between Section 18(b)(4)(D) and new
to them, on written request, the requirement,136 but they and other Form D in general. Section 18(c)(2)(A)
information provided by each issuer to commenters expressed concerns. Two generally provides, in relevant part, that
offerees in accordance with applicable commenters expressed the concern that the states retain the right under NSMIA
law; the undertaking to provide offering to obtain a consent to service of process
• Consenting to service of process on materials could be read in a manner from an issuer engaged in an offering
individuals holding specified positions; inconsistent with NSMIA,137 one under Rule 506 of Regulation D. Section
and commenter asked for clarification 18(b)(4)(D) generally provides that the
• Certifying that, if the issuer is regarding the application of NSMIA,138 states retain the right under NSMIA to
claiming a Rule 505 exemption, it is not and two commenters expressed the impose on an issuer engaged in an
disqualified from relying on Rule 505 concern that the combined signature offering under Rule 506 ‘‘notice filing
for one of the reasons stated in Rule requirement was too narrow because it requirements that are substantially
505(b)(2)(iii). did not contain all that is contained in similar to those required by rule or
In undertaking to furnish to the states the current state signature requirement regulation under section 4(2) that are in
in which the Form D is filed, on written and Form U–2.139 effect on September 1, 1996.’’ Similarly
request, the information provided to The commenters that expressed the to what we noted above in regard to the
offerees, the issuer will not be affecting concern that the undertaking to provide undertaking to provide offering
any legal limits on the ability of these offering materials could be read in a materials, neither the consent to service
states to require information.133 manner inconsistent with NSMIA stated provision nor anything else related to
The signature requirement will be that the undertaking could be new Form D affects any legal limits on
more extensive than the current federal misunderstood to mean that, as a result the ability of the states to require
signature requirement and will differ in of the undertaking, states could require information.
the offering materials in all instances Both commenters that expressed the
various ways from the current state
regardless of the limits NSMIA narrowness concern addressed the
signature requirement. The proposed
otherwise would impose on their ability consent to service provision. One
signature requirement will be more
to do so.140 Both of these commenters commenter stated that the consent to
extensive than the current state
suggested that the Commission could service should be broadened to include
signature requirement, for example, by
resolve the concern by omitting the consents to jurisdiction and venue as
including a consent to service of are contained in Form U–2 to eliminate
process. The signature requirement also undertaking, and one of these
commenters 141 suggested that, in the fully the need to file Form U–2 and
will be less extensive than the current enable investors to avoid needing to
state signature requirement in several alternative, the Commission could
clarify that the undertaking would be plead and prove jurisdiction as an issuer
ways.134 should that wants to offer or sell in a
inapplicable to offerings under Rule
506. In response to these concerns, the state.142 The other commenter stated
131 Each issuer in a multiple-issuer offering will
new form will clarify in the context of that the consent to service provision
be required to sign the Form D. If all issuers
authorize the same person to sign on their behalf, the offering materials undertaking that should be broadened to apply to a
however, only that person will need to sign.
where securities that are the subject of broader array of acts, as does Form U–
132 Both the current federal and state signature
the Form D are covered securities under 2, and to include the Rule 262
requirements expressly provide that the issuer has disqualification provision we proposed
duly caused the Form D to be signed on its behalf NSMIA, whether in all instances or due
by the undersigned duly authorized person. Only to the nature of the offering that is the to delete.143 The commenter reasoned
the current state signature requirement, however, subject of the Form D, the states cannot that the form should include the Rule
expressly provides that the issuer has read the Form
routinely require the offering materials 262 disqualification provision because
D and knows the contents to be true. state bad actor provisions might apply
133 See Section 18 under the Securities Act as under the undertaking or otherwise and
can require the offering materials only to offerings under Rule 504 or 505.
discussed in Part I.B.3.
134 The new signature requirement, unlike the
We believe that the consent to service
current state signature requirement, will omit both 135 The new signature requirement’s addressing
provision as proposed and adopted
an undertaking to provide a Form D to specified consent to service but not consent to jurisdiction or strikes the right balance between
state administrators and a representation regarding venue is consistent with the signature requirement regulatory benefit and issuer burden.
ULOE. As noted above, however, under the new in Form ADV [17 CFR 279.1], which can satisfy
signature requirement, issuers will undertake to
We acknowledge that the consent to
both federal and state filing requirements for
furnish to the states in which the Form D filing is investment adviser registration.
service will not be as broad in effect as
made, on written request, the information provided 136 See letters from ABA and NASAA. Form U–2 because that form’s consent
by each issuer to offerees. Also as noted above, 137 See letters from ABA and MFA. to service applies to a somewhat broader
revised Form D will omit all references to ULOE
and the provisions that, in general, require specified
138 See letter from ABA. array of acts and that form also contains
139 See letters from Connecticut and NASAA.
information on a state-by-state basis in an appendix
140 See letters from ABA and MFA. 142 See letter from NASAA.
to the form and require specified representations
and undertakings. 141 See letter from ABA. 143 See letter from Connecticut.
consents to jurisdiction and venue. We Commission and states with which it value of paper filings and the utility of
believe, however, that the Form D was filed during that time. We a uniform, comprehensive database. In
consent provision’s application to a acknowledge the commenter’s concerns. adopting the conversion of the Form D
somewhat narrower array of facts is As we discussed in the proposing filing from a paper system to an
appropriate because the facts it applies release and above, however, public electronic system, we assume that
to are tailored to the subject matter of availability of Form D provides a issuers will have access to a computer
Form D. The Form D consent to service measure of investor disclosure and and the Internet. In the absence of an
provision generally applies to ‘‘any serves other useful purposes. In issuer’s having a personal or office
activity in connection with the offering addition, as a practical matter, even if computer and Internet access, public
of securities that is the subject of this we were to permit confidential filing, libraries around the country often have
[Form D].’’ In contrast, the Form U–2 Forms D would be subject to requests computer and Internet access that an
consent to service provision generally under the Freedom of Information Act issuer could use. We therefore do not
applies to actions relating to ‘‘the sale of (‘‘FOIA’’).150 envision the need for a hardship
securities.’’ Finally, although Form D Rule 101(c)(6) of Regulation S–T 151 exemption to permit paper filing.158
will not require consents to jurisdiction currently requires the information The amendments revise Rule 503 of
and venue, we note that under required by Form D to be filed in paper Regulation D and Form D in several
appropriate circumstances, state format. The amendments will delete the ways related to electronic filing. The
regulators still would be able to require reference to Form D from Rule 101(c)(6) amendments delete from Rule 503
this type of information. and will revise subparagraph (a)(1) of references to the paper-based concept of
Rule 101 152 to add a new subparagraph copies in subparagraphs (a) and (b) and
B. Electronic Filing of Form D (xiii) that will add Form D to the rule’s a manual signature in subparagraph (b).
We are amending Regulation S–T,144 list of documents required to be filed Subparagraph (a) will continue to
Rule 503 of Regulation D, and Form D electronically. specify when a notice on Form D
to implement the requirement for Rule 100 of Regulation S–T,153 which initially must be filed and will be
issuers to file the information required specifies the persons or entities subject revised to specify also when an
by Form D with us electronically to the electronic filing requirements of amendment to a Form D filing must or
through an online filing system.145 A Regulation S–T, expressly includes, could be filed.159
large majority of commenters supported among others, Exchange Act reporting One commenter 160 suggested that we
electronic filing, but some expressed companies whose filings (such as Form ease burdens by extending the filing
concern about whether electronic filing D) are subject to review by the Division deadline to at least 30 days from the
would impose more burdens on of Corporation Finance. In order to date of first sale,161 defining the date of
issuers 146 or raise general solicitation assure that Rule 100 also will apply to first sale as the consummation of the
issues.147 The concerns regarding non-reporting companies that file Form first closing of a sale of securities in the
burdens generally related to the D, the amendments revise paragraph (a) offering, extending the cut-off time for
operation of the online system, and we of Rule 100 of Regulation S–T 154 to add electronic filing from 5:30 to 10 p.m.
address those concerns below where we a reference to entities that are not Eastern time 162 and providing that
discuss the operation of the system in Exchange Act reporting companies but
more detail.148 whose filings are subject to review by 158 We also are adopting an amendment to Rule
One commenter expressed the the Division of Corporation Finance. 104(a) of Regulation S–T [17 CFR 232.104(a)] to
concern that, even though Forms D make it clear that unofficial PDF copy submissions
We also are amending Regulation are unavailable for Form D notices. The new online
currently are publicly accessible, their S–T, as proposed, to make hardship filing system, further described below, will make
increased public accessibility as a result exemptions unavailable for Form D filed Form D information available on our Web site
of mandated electronic filing would filings.155 The amendments revise in what we believe will be an easy-to-read format
encourage third parties to use Form D similar to that which could be provided through an
subparagraph (a) of Rules 201 156 and unofficial PDF copy.
for purposes beyond its original intent 202 157 to exclude Form D from the 159 Subparagraph (a) will continue to provide that
or current use and might result in filings for which hardship exemptions an issuer must file the Form D no later than 15
issuers making less use of Form D than are available. We believe hardship calendar days after the first sale of securities in the
they do now and, thereby, deprive them offering. As currently, an issuer could file the Form
exemptions should not be available for D at any time before that if it has determined to
of the benefits of the use of Regulation Form D filings because of the relative make the offering. Also as currently, a mandatory
D and cause the Commission to receive ease of electronic filing, the limited capital commitment call would not constitute a new
less information than it does now.149 offering, but would be made under the original
The commenter suggested that, as an 150 5 U.S.C. 552 et seq. The Commission’s offering, so no new Form D filing would be required
alternative, the Commission permit solely as a result. See Part II.A.4.b of this release
regulations that implement that statute are at 17
for a discussion of when an amendment must or
Form D filings to be confidential for a CFR 200.80 et seq.
could be filed.
151 17 CFR 232.101(c)(6).
specified amount of time, such as a year, 160 See letter from ABA.
152 17 CFR 232.101(a)(1).
if the issuer has made no public 153 17 CFR 232.100.
161 As discussed above in connection with Item
disclosure of the offering. The Form D 154 17 CFR 232.100(a).

13 in Part II.A.5, another commenter suggested that
would, however, be available to the the form require a final report of actual sales results
155 We note, however, that a filer may request a
and be due not later than 15 business days after the
filing date adjustment under Rule 13(b) of close of the offering.
144 Regulation S–T is the Commission’s general
Regulation S–T [17 CFR 232.13(b)]. This rule 162 Rule 13 of Regulation S–T [17 CFR 232.13]
regulation governing electronic filing. addresses circumstances where an electronic filer generally provides that a filing by direct
145 The online filing system will automatically attempts in good faith to file a document with the transmission beginning on or before 5:30 p.m.
capture and tag data items and is discussed in Commission in a timely manner but the filing is Eastern time on a business day is deemed filed that
further detail in Part III of this release. delayed due to technical difficulties beyond the day and, if such a filing were to begin after that
146 See letters from ABA, Stephen A. Marcus and filer’s control. In those instances, the filer may time, it would be deemed filed on the next business
SCSGP. request an adjustment of the document’s filing date. day. Rule 13 also provides, however, that a 10:00
147 See letters from Connecticut, Massachusetts The staff may grant the request if it appears that the p.m. deadline applies for registration statements
and NASAA. adjustment is appropriate and consistent with the and post-effective amendments filed under Rule
148 We address the concerns relating to general public interest and the protection of investors. 462(b) [17 CFR 230.462(b)] and beneficial
solicitation issues in Part II.C below. 156 17 CFR 232.201(a).
ownership reports filed under Section 16(a) [15
149 See letter from ABA. 157 17 CFR 232.202(a). Continued
when a Form D otherwise would be due issuer signing the Form D will be Form D. An issuer that complies with
on a weekend or holiday it be deemed undertaking to furnish to the the terms of the safe harbor is assured
due on the next business day. We are Commission and the states with which that the electronic availability of its
not aware of the current deadline’s the Form D is filed, on written request, Form D filing would not, in and of itself,
having been difficult to meet in the past the information provided by each issuer cause the issuer to have violated this
and believe that carrying it forward is to offerees. Subparagraph (d), regarding prohibition.
not likely to cause problems in the amendments, no longer will be Such a safe harbor would not be
future. For the same reasons, we believe necessary because subparagraph (a) will warranted if it merely shielded activity
that it is not necessary to extend the cut- address when to file amendments and that is, in fact, intended to generate
off time from 5:30 to 10 p.m. In this the new online filing system will make interest in the offering in violation of
regard, we note that filings under Rule available to the issuer the version of the law. Accordingly, we are limiting the
462(b) and Section 16(a) to which the Form D to be amended to enable the amount of information submitted on the
extended cut-off time applies typically issuer to key in only the changes. form and limiting the application of the
must be made much more quickly than Subparagraph (e), regarding the date a safe harbor to where the information is
a filing on Form D.163 We are, however, Form D filing is considered filed, no provided with a good faith and
further revising Rule 503(a)(1) to longer will be necessary because Rule reasonable effort to comply with the
provide that when a Form D filing 13 of Regulation S–T will specify the requirements of Form D.170 Limiting the
otherwise would be due on a weekend way to determine the filing date for a safe harbor to information provided
or holiday it will be deemed due on the Form D filing as it does for electronic with a good faith and reasonable effort
next business day. This approach is filings generally and new Rule 503(a)(1) to comply with the requirements of
consistent with the way Exchange Act will provide that when a Form D Form D would be consistent with
Rule 0–3(a) 164 generally treats filing otherwise would be due on a weekend Preliminary Note 6 171 to Regulation D,
deadlines under the Exchange Act.165 or holiday it will be deemed due on the Rule 508,172 and the ‘‘notification’’
Subparagraph (b) of Rule 503 will next business day.168 Finally, the nature of Form D’s requirements.
continue to require a signature. Rule 302 amendments similarly will revise the
of Regulation S–T,166 which governs the As proposed, electronic Form D
General Instructions of Form D would not have contained any place
manner of signature for electronic regarding copies required, manual where ‘‘free writing’’ could occur.173
filings, will apply to Form D.167 The signatures, amendments, mandatory When submitting a paper filing, filers
amendments also add to subparagraph electronic filing and filing date. may insert information that is not
(b) a statement that electronic Form D
C. General Solicitation and General required by the form, but that could be
filing through our new online filing
Advertising Issues Presented by a vehicle for soliciting investors
system is mandatory. In addition, the
Electronic Filing of Form D illegally. Prohibiting free writing in the
amendments delete subparagraphs (c),
electronic form would prevent such
(d), and (e). Subparagraph (c) requires Rule 502(c) of Regulation D 169 sets
misuse. One commenter favored the
an issuer that makes sales under Rule forth the prohibition on general
total bar against free writing as
505 to provide an undertaking on its solicitation and general advertising
necessary to safeguard against this
Form D to provide specified information applicable to most Regulation D
misuse.174 Another commenter,
to the Commission upon the staff’s offerings. Specifically, issuers and
written request. This paragraph no persons acting on the issuer’s behalf are however, favored allowing issuers to
longer will be necessary because, as prohibited from offering or selling clarify responses, asserting that
noted above, the revised signature securities by any form of general permitting issuers to do so would avoid
requirement will provide that each solicitation or general advertising. a disincentive to filing by enabling
Information filed using Form D has up issuers to present more accurate
U.S.C. 78p(a)], in general, by officers, directors and to now been available to the general information that would be more
principal security holders of reporting companies public. The electronic filing and
that have a class of equity securities registered 170 Similarly, current Rule 502(c) includes a safe
under Section 12 [15 U.S.C. 78l] of the Exchange availability of Form D information, harbor from the prohibition on general solicitation
Act. however, may present the concern that and general advertising for a notification in
163 For example, Section 16(a)(2)(C) [15 U.S.C. the filing could be used as a marketing compliance with Rule 135c of an unregistered
78p(a)(2)(C)] generally requires that insiders file document to generate interest in offering by an issuer required to file reports under
reports of changes in beneficial ownership within Section 13 or 15(d) of the Exchange Act. The
two business days of the change.
offerings because the information would information allowed to be included in a Rule 135c
164 17 CFR 240.0–3(a). be easily and broadly available. This, in notification is limited to very basic identifying
165 As the commenter that raised the weekend/ turn, may raise concerns regarding information about the issuer and the offering.
holiday issue pointed out, current Rule 503(e)(2) compliance with Regulation D’s 171 Preliminary Note 6 to Regulation D provides,
addresses the issue by providing that a Form D we prohibition on the use of general in part, that ‘‘Regulation D is not available to any
do not physically receive by the end of the 15-day issuer for any transaction or chain of transactions
period is deemed filed on the date it is sent by
solicitation and general advertising. To that, although in technical compliance with the
certified or registered U.S. mail. Consequently, an address these compliance concerns, we these rules, is part of a plan or scheme to evade the
issuer currently may send a Form D as late as the are revising Rule 502(c) to include a safe registration provisions of the [Securities] Act.’’
end of the 15-day period. In proposing to delete harbor from the prohibition on ‘‘general 172 17 CFR 230.508. Rule 508 provides, in part,
Rule 503(e)(2), it was not our intention to shorten that ‘‘A failure to comply with a term, condition or
the Form D filing deadline.
solicitation’’ and ‘‘general advertising’’ requirement of [specified rules under Regulation D]
166 17 CFR 232.302. for information provided in a Form D will not result in the loss of [an] exemption * * *
167 Rule 302 requires, in general, that electronic filed with the Commission if the if the person relying on the exemption shows * * *
filings contain typed signatures, that each signer information is provided in good faith [a] good faith and reasonable attempt was made to
manually sign a signature page or other document comply with all applicable terms, conditions and
and the issuer makes reasonable efforts
confirming the typed signature by the time the requirements of [such rules].’’
filing is made, and that the issuer maintain the
to comply with the requirements of 173 As proposed and adopted, however, Form D
manually signed document for five years and make will require an issuer to provide further detail in
168 The description of Form D at 17 CFR 239.500 a textual response if the issuer must choose ‘‘Other’’
it available to the Commission and its staff upon
their request. We also are adding to Form D’s is similar to Rule 503 and is being amended in response to Item 1 regarding legal entity type or
signature instruction a summary of Rule 302’s similarly. Item 9 regarding security type.
requirements as a convenience. 169 17 CFR 230.502(c). 174 See letter from NASAA.
useful.175 The commenter also asserted providing a carefully tailored safe A. Mechanics
that permitting clarification to ensure harbor should prevent the electronic The new online filing system for Form
accuracy would not transform the Form availability of Form D filings from D information will be accessible from
D into a marketing document and would undermining the ban. any computer with Internet access. An
be consistent with the proposed safe issuer will be able to both submit and
III. Electronic Filing Procedure
harbor because the information would amend its Form D filing through this
be provided with a good faith and We are mandating electronic filing of system.181 The Form D itself will
reasonable effort to comply with the the Form D notice through an online include guidance functions to assist in
requirements of Form D. filing system in development that will completing the form.182
We are persuaded that, on balance, it be accessible from any computer with In order to file, issuers will need the
is appropriate to permit issuers to Internet access. The information filed same codes as are required to file on our
engage in a limited amount of free will be available on our Web site and, electronic filing system, EDGAR, today.
writing to the extent necessary to clarify because the online filing system will An issuer that does not already have
responses as consistent with the safe automatically capture and tag data EDGAR filing codes, and to which the
harbor. In order to limit the amount of items, the data will be interactive and Commission has not previously
free writing, however, we are reducing searchable. Our Web site will enable assigned a user identification number,
the need for it by offering additional users to view the information in an which we call a ‘‘Central Index Key
response choices for some items 176 and easy-to-read format, download the (CIK)’’ code, will obtain the codes by
permitting free writing to clarify information into an existing application, filing electronically a Form ID 183 at
responses in separate fields using a or create an application to use the https://www.filer
limited number of characters only for information. As discussed above, our management.edgarfiling.sec.gov and
those items for which it seems objectives in converting Form D filings filing, in paper by fax within two
appropriate. Accordingly, and as noted to an electronic format include business days before or after filing the
above in the context of discussing lessening the burden on issuers of filing Form ID, a notarized authenticating
particular items of new Form D, we will the Form D notice, enhancing federal document. The authenticating
permit free writing to clarify responses and state coordination, increasing the document will be manually signed by
to the following items: information available regarding the the applicant over the applicant’s typed
• Item 3—Related Persons; effectiveness of our Securities Act signature, include the information
• Item 10—Business Combination exemptions and increasing the contained in the Form ID, confirm the
Transactions; information available to researchers authenticity of the Form ID 184 and, if
• Item 13—Offering and Sales using Form D data to conduct empirical filed after electronically filing the Form
Amounts; research aimed at improving the ID, include the accession number
• Item 15—Sales Commissions and assigned to the electronically filed Form
efficiency and effectiveness of our
Finders’ Fee Expenses; and ID as a result of its filing.185 Under the
• Item 16—Use of Proceeds.177 private markets.
Two commenters urged that we We believe our approach to filing and online system, if the Form D filing is
provide additional safeguards to support dissemination formats will make it made on behalf of multiple issuers, each
the ban on general solicitation and relatively easy to file, access and issuer will be required to have its own
general advertising.178 Both commenters analyze Form D information. As CIK code and a confirming code, which
suggested prominent warnings in discussed in the proposing release, we call a ‘‘CIK Confirmation Code
connection with the display of Form D using this system will result in the Form (CCC),’’ for validation.
D information being filed in the Two commenters expressed concern
information. One of them also favored
standard format of eXtensible Markup about the need for an issuer to obtain
limiting public access to some types of
Language (XML) and we would access codes through the Form ID
information, clarifying in connection
disseminate the information in a format process in order to file through the new
with adopting the amendments that
that provides normal text for reading online system.186 We plan to consider
electronic filing does not eliminate the
ban and amending Regulation D to and XML-tagged data for analysis. Three 181 In the proposing release, we stated our
require companies to return any commenters suggested that the system expectation that the system would permit an issuer,
unsolicited payments submitted to tag the Form D information with the in Item 7, to designate the states to which the Form
purchase securities.179 We believe that eXtensible Business Reporting Language D is directed on the assumption that some states
(XBRL) system rather than the standard would adopt one-stop filing and allow filings that
limiting the types and amount of specify that they are directed to those states to
information in Form D filings and format of XML.180 XBRL is an XML- constitute filings with them. As discussed above in
based language that is intended to tag a more detail in Part I.B.3, we have been working
175 See letter from ABA. wide range of business data. Because actively with NASAA to achieve one-stop filing
176 For example, we have modified the proposed Form D information consists of capability but it would not be available when
version of Item 1 to permit an issuer to choose ‘‘yet electronic filing of Form D begins.
relatively simple facts, XML is a 182 For example, the system might use drop-down
to be formed’’ instead of providing a year of
organization in response to that item.
sufficient technological solution, and menus as a guidance function.
177 The commenter that suggested that we permit we expect the information tagged in 183 17 CFR 239.63, 249.446, 269.7 and 274.402.
free writing cited Items 1, 3, 9, 10 and 13 as XML will be compatible with systems 184 An issuer could confirm the authenticity of a
examples of items for which it may be appropriate designed for more sophisticated XBRL Form ID by, for example, stating that ‘‘[name of
to permit free writing. See letter from ABA. As reporting. The Commission can also issuer] hereby confirms the authenticity of the Form
noted, we have added an additional response ID [filed] [to be filed] on [specify date] containing
choice to the proposed version of Item 1 and Items take advantage of its experience in the information contained in this document.’’
3, 10 and 13 all will permit free writing to clarify developing data tags for information 185 17 CFR 232.10(b). An ‘‘accession number’’ is
responses. In that regard, we choose not to revise filed under Section 16, which is a unique number generated by EDGAR for each
further Item 9, regarding security type, because it currently filed with the Commission electronic submission. Assignment of an accession
already requires an issuer to provide further detail number does not mean that EDGAR has accepted
in a textual response if the issuer must choose using XML technology. a submission.
‘‘Other’’ as its initial response. 186 See letters from ABA (focusing particularly on
178 See letters from Connecticut and NASAA. 180 See letters from Center for Audit Quality, the burden on non-reporting companies) and
179 See letter from NASAA. EDGAR Online, Inc. and XBRL US, Inc. Stephen A. Marcus.
ways to simplify the authentication information and waste time and regulators will be able to identify on our
process in order to replace the money.191 Web site Form D filings that specify
requirement to fax the notarized We agree that it would be useful to their states.195 Filers generally would
authenticating document, and expect filers to be able to avoid the need to specify one or more states in response
that a more simplified process may be provide all of the required information to proposed Items 1 (jurisdiction of
available by the time electronic Form D both online and in a single session. incorporation or organization), 2
filing is mandated.187 Contrary to our earlier expectation, we (principal place of business and contact
anticipate that the system will provide information), 3 (related person
To access and file a Form D through a way to avoid the need to provide all addresses) and 12 (addresses of
the new online system, issuers will of the required information both online recipients of sales compensation) of
begin by having a valid identification and in a single session. For example, the Form D.196 State specification
number, confirming code and separate system may permit the issuer to prepare information will be interactive and
password, which we call a ‘‘Password’’ the filing offline and submit it online or searchable because the new online filing
and logging on to the system. The to save an incomplete form online from system will automatically capture and
identification number, confirming code session to session for a short period of tag that information as it will other
and password, together with a password time, such as six calendar days, between Form D filing information.
modification authorization code, are sessions.192 Most Form D filings currently are
referred to as ‘‘EDGAR access codes.’’ An issuer will be able to prepare an made by law firms on behalf of
Data entry will be required to be amendment based on the content of a issuers.197 We expect that the
performed quickly enough to avoid previously filed form.193 The system simplification and restructuring of Form
time-outs that end the session. A time- will validate as many fields as possible D and the conversion of Form D filings
out most likely will occur no less than for data type and required fields while to an electronic system may decrease
one hour following the user’s last the filer fills in the fields on the screen. legal fees to make Form D filings and
activity on the system. Time-outs will Issuers will have an opportunity to perhaps allow more issuers to file a
be implemented due to cost and correct errors and verify the accuracy of Form D notice themselves without the
technical limitations, but it would be the information before submitting the assistance of a law firm.
possible to extend a session with any filing. Links will be available to enable
keystroke.188 issuers to access information, such as B. Database Capabilities of Electronic
the instructions to Form D. Form D Repository
Two commenters suggested that the The issuer will be able to download
system provide a way to save an A review of Form D filings by our
and print the filing before and after Division of Corporation Finance
incomplete form and one of them stated submission.194 Once the filing is
that it would be desirable as a practical uncovered errors and omissions in the
submitted, the system will indicate information provided.198 In an effort to
matter for the system to enable an issuer receipt of the filing. In many cases, the
to prepare a filing offline and then enhance the quality of the data collected
system will display a unique number by the proposed electronic Form D, we
access the system to submit it.189 One assigned to the submission, which we
commenter stated that a saving feature are including internal checks in the new
call an ‘‘accession number’’ but, in any online system that should decrease the
was needed to avoid time-outs.190 The event, the accession number will follow
other commenter stated that the absence number of errors and omissions in Form
in an e-mail notification to the filer. A D filings. The system will prevent an
of a saving feature would virtually filer will be able to see the filing on our
require that a careful filer prepare a issuer from submitting Form D
Web site shortly after filing. information electronically unless all
Form D offline on a specially created Upon filing of the Form D notice with
template and then input all the necessary data fields are completed in a
the Commission, state securities manner consistent with the nature of
information again online and, as a
result, would risk inputting incorrect 191 See letter from ABA. 195 In Release No. 33–6339 (Aug. 18, 1981) [46 FR
192 Some information provided by the filer in the
41791], the Commission stated the following in its
187 In the proposing release, we solicited course of obtaining EDGAR access codes or
discussion of Rule 503: ‘‘It should be noted that,
updating such information will automatically
comment on whether issuers that only file Form D although the revised filing requirements do not
appear in appropriate places when the filer accesses
with the Commission should be able to authenticate the new online filing system. As a result, in order require that the user also file a notice with the
a Form ID by providing to the Commission a copy to make changes to such information, it generally state(s) in which the offering is to be sold, it is
of a local business license rather than by faxing the will be necessary to do so through an updating anticipated that the Commission will routinely
otherwise required notarized authenticating process through the main EDGAR system rather furnish copies of the notice forms to the appropriate
document. We received no responses to this than the Form D online filing system. The updating state commissions.’’
question. process is a well-established typically online
196 As discussed above in more detail, we no
188 The new online filing system technically will longer contemplate effectuating a one-stop filing
process applicable to EDGAR filers generally that
be part of EDGAR but likely in some respects will would be relatively easy to complete. system by giving filers an opportunity to direct their
be similar to the online filing system for Forms 3 193 When an issuer files an amendment to a Form filings to designated states as provided by proposed
[17 CFR 249.103 and 274.202], 4 [17 CFR 249.104 D filing, it will access its Form D filing on the Item 7, but we have been working actively with
and 274.203], and 5 [17 CFR 249.105] filed under online filing system and type over the inaccurate NASAA in an effort to accomplish this in a different
Section 16(a) of the Exchange Act, in general, by information. In that case, the online filing system manner. Consequently, Item 7 does not provide for
officers, directors and principal security holders of will replace the inaccurate information with the designation of states.
reporting companies that have a class of equity new information, save the revised version of the 197 Our Division of Corporation Finance
securities registered under Section 12 of the Form D filing in its amended state causing it to be conducted a one-month review of Form D filings
Exchange Act. Form D filers will access the online an amendment and a new filing, and record the date and determined that, based primarily on the cover
filing system and, essentially, prepare the filing by of amendment. The information in the Form D that letters that accompany most paper Form D filings,
responding to questions and filling in blanks. The was accessed for purposes of the amendment will, about 75% of the filings were made by law firms
online filing system for Forms 3, 4 and 5 does not however, remain unchanged on the system on behalf of issuers.
provide a way to save an incomplete form, but does accessible to the public. 198 Some of the most frequent errors were failures
provide the alternative of preparing filings before 194 We believe the ability to download and print to indicate whether a filing is an amendment or a
accessing the system and then submitting them the filing before and after submission meets the new filing and claims that do not match the facts
through, rather than preparing them on, the online concerns of the commenter that asked that the described (for example, issuers claiming that an
system. system allow the user to view the information offering is limited to accredited investors and then
189 See letters from ABA and SCSGP.
before submission and print an as-filed version after including information regarding participation of
190 See letter from SCSGP. submission. See letter from ABA. non-accredited investors in the offering).
each field 199 and the logical D. Although the information in new information as part of a periodic or
relationships between or among the Form D is somewhat different from that current report.204 Both commenters
fields.200 This will not only promote the in current paper Form D, we believe a suggested that we defer consideration of
integrity of the data collected by the short period when either version of the such an exemption. One commenter
Form D repository, but also will make form can be used is appropriate. cited concerns with the potential for
it easier for issuers to complete or Similarly, we will permit an confusion and problems with differing
amend their filings. amendment to be filed in paper format formats and retrieval.205 The other
using either version of the form until commenter cited risks to uniformity
C. System Implementation
electronic filing becomes mandatory. As between federal and state requirements,
The new online system is expected to previously discussed, however, the new additional costs and potential
be available to receive filings on a annual and other amendment rules will inadvertent violations.206 We intend to
voluntary basis on September 15, 2008. apply to all new Form D filings consider in the future the issues that
Electronic filing will be required for all regardless of format and the current these comments raise.
filings on or after March 16, 2009. We amendment requirements will apply to
are treating the period between the two IV. Paperwork Reduction Act Analysis
all current Form D filings in paper
dates as a transition period during format. By the time electronic filing is A. Background
which electronic filing of Form D mandated, however, we believe an The amendments will affect two
information with us using the new adequate amount of time will have forms that contain ‘‘collection of
online filing system will be voluntary. passed since electronic filing will have information’’ requirements within the
Issuers may also file a paper version of become voluntary for Form D filings meaning of the Paperwork Reduction
the new Form D with us during the that it would be appropriate to require Act of 1995 (‘‘PRA’’).207 The titles of the
transition period, without using the electronic filing using new Form D of affected information collections are
online filing system. initial filings and all amendments
The transition period serves several Form D (OMB Control No. 3235–0076)
applying the new amendment rules and Form ID (OMB Control No. 3235–
purposes. It should both enable issuers regardless whether the filing being
to become familiar with the new Form 0328). The purposes of the amendments
amended was filed on current or new are, in general, to clarify, simplify and
D and online filing system and help Form D. update the information requirements of
alert us to any problems. One We are establishing the transition Form D and modernize the related
commenter suggested that we permit period by delaying until the end of the information capture process. We
voluntary filing for a period of at least period the effective date of new Item published a notice requesting comment
a year to work out any issues that arise 101(a)(1)(xiii), which mandates on the collection of information
and provide time to allow states to electronic filing of new Form D, and requirements in the proposing release,
adopt conforming one-stop filing rules adopting temporary provisions that will and submitted a request to the Office of
and set up a central payment system.201 apply only during the transition Management and Budget (‘‘OMB’’) for
We believe that a shorter period of time period.202 We are adopting temporary review under 44 U.S.C. 3507(d) and 5
should be adequate for discovering and Item 101(b)(10) of Regulation S–T to CFR 1320.11. As we discuss in more
addressing any issues in the new form permit but not require electronic filing detail below, we have withdrawn that
or system that might arise. We also of new Form D during the period. We request and plan to replace it in order
believe mandating electronic filing of are adopting temporary Rule 503T and to reflect a new estimate based on the
Form D as soon as feasible even without Temporary Form D, which are similar to most recently ended fiscal year that had
a one-stop filing capability in place is current Rule 503 and Form D, not yet ended at the time we submitted
preferable, in order to realize without respectively, and, in general, will enable the original request to OMB. When we
unnecessary delay the many benefits we filers to file current or new Form D in receive OMB clearance, we will publish
believe mandated electronic filing will paper format during the transition notice in the Federal Register. An
provide separate and apart from the period.203 agency may not conduct or sponsor, and
benefits that one-stop filing would Two commenters addressed the
a person is not required to respond to,
provide. In this regard, we believe that question in the proposing release as to
a collection of information requirement
beginning to mandate electronic filing whether, in the future, public
unless it displays a currently valid
without one-stop filing in place will not companies should be exempted from the
control number. Compliance with the
delay, and in fact will facilitate, the Form D filing requirement in Rule 503
collections of information as revised
development of one-stop filing on and instead be required to file Form D
will be mandatory. The information
which we are working actively with required by the collection of
202 Most of the provisions we adopt today will be
NASAA. information in Form D as revised will
effective on September 15, 2008 when the transition
Issuers that choose not to file period begins. We are, however, providing earlier not be kept confidential by the
electronically during the transition effective dates for the changes to Items 101(c)(6) Commission; the information required
period may use either the current paper and 201(a) of Regulation S–T. The change to Item by Form D will be kept non-public,
form or a paper version of the new Form 101(c)(6) will remove Form D from the list of
documents that cannot be filed electronically and subject to a request under FOIA.
the change to Item 201(a) will add Form D to the Form D is filed by issuers as a notice
199 The system will check, for example, to make
list of documents for which a temporary hardship of sales without registration under the
sure that number characters are used in responding exemption from electronic filing will not be
to the field in proposed Item 13 for the offering and Securities Act based on claims of
available. The earlier effective date will have no
sales amounts. practical effect on the Form D filing requirements exemption under Regulation D or
200 Where, for example, the filer claims a Rule 505
but will facilitate the Commission’s consideration Section 4(6) of the Securities Act.
or Rule 506 exemption in response to Item 6 and and potential adoption of other revisions to Items Form ID is filed by registrants,
specifies that more than 35 non-accredited investors 101(c)(6) and 201(a) that it proposed in Release No. individuals, transfer agents, third-party
have invested in response to Item 14, a pop-up or 33–8859 (Nov. 1, 2007) [72 FR 63513].
other feature will warn that only 35 non-accredited 203 Among the differences between the current
204 See letters from Connecticut and NASAA.
investors are permitted in these types of offerings and temporary versions of Rule 503 and Form D is
205 See letter from Connecticut.
and require the filer to select ‘‘OK’’ before a reduction in the number of paper copies required
proceeding. to be filed from five to two (one of which, in each 206 See letter from NASAA.
201 See letter from ABA. case, must be a manually signed original). 207 44 U.S.C. 3501 et seq.
filers or their agents to request the Æ The minimum investment amount, Æ Use of proceeds but only as to the
assignment of access codes that permit if the change is an increase, or if the amount used to make payments to
the filing of securities documents on change, together with all other changes executive officers, directors and
EDGAR. This form enables the in the amount since the previously filed promoters.208
Commission to assign an identification notice, does not result in a decrease of As noted above, we expect that, on
number (CIK), confirmation code (CCC), more than 10%; balance, the variations from the
password and password modification Æ Any address or state(s) of proposals will not increase the
authorization code to each EDGAR filer, solicitation shown in response to Item collection of information burden.
each of which is designed to protect the 12 of Form D; Consequently, we continue to believe
security of the EDGAR system. Æ The total offering amount (if the
that the overall information collection
change is a decrease); and
B. Estimated Collection of Information Æ The amount of securities in the burden of Form D will remain
Burdens offering that remain to be sold; and approximately the same as it is today.209
As we previously expected and • Prescribe that annual amendments In the proposing release, we stated
are due on or before the first anniversary our then current estimate that, without
discussed in the proposing release as to
of the most recently filed Form D filing the effect of the amendments, 196,800
the proposed amendments, we expect
or amendment, if the offering is respondents file Form ID each year at an
that the adopted amendments will not
continuing at that time, rather than each estimated burden of .15 hours per
affect the overall collection of
year between January 1 and February response, all of which is borne
information burden of Form D but will
14. internally by the respondent for a total
cause additional respondents to file a
We expect that the following annual burden of 29,520 hours. We later
Form ID each year and, as a result, will
variations from the proposals will not refined the estimate to the extent that
increase the annual collection of
affect the collection of information we reduced from 196,800 to 46,400 the
information burden. We have, however,
burden of Form D: estimated number of respondents that
as further discussed below, refined and • Provide clarifications; file Form ID each year resulting in a
updated the information we used to • Permit issuers to provide total annual burden of 6960 hours. We
arrive at our estimate of the effect of the information that is not required; reduced the estimate primarily based on
amendments. As a result, we have • Permit issuers to clarify the actual number of Forms ID per year
revised our estimate of the current information; we recently have received. We reflected
number of respondents that file Form ID • Request but not require that issuers the new estimate in the request we
each year without the effect of the in specified industry groups provide submitted to OMB rather than the
amendments and the additional number their aggregate net asset value range estimate used in the proposing release.
of respondents that will file Form ID (and provide an additional exception
each year as a result of the amendments. from the requirement to amend Form D Also in the proposing release, we
We expect that the amendments will for changes in aggregate net asset value); stated our then current estimate that an
not affect the number of Form D filings • Eliminate the ability to specify additional 18,600 respondents would
made and, on balance, will obligate states to which the Form D is directed; file Form ID each year and, as a result,
issuers to report on Form D essentially • Prescribe that the minimum would cause an additional annual
the same amount of information as they investment amount relates to outside burden of 2790 hours. We now are
are required to report on Form D today. investors rather than all investors; revising that estimate as a result of using
As previously noted, we are adopting • Prescribe disclosure of the total updated information for our most
the amendments substantially as number of investors rather than the recently ended fiscal year that ended
proposed. We expect nearly all of the number of accredited investors; and after we issued the proposing release
variations between what we expressly • Provide temporary rules that, in and submitted the related request to
proposed and what we adopted to conjunction with varied effective dates, OMB.210 Our new estimate is that, as a
lessen the collection of information establish the transition period during result of the amendments, an additional
burden or not affect it. We expect a which electronic filing of Form D 19,300 respondents will file a Form ID
small minority of variations to increase proceeds from prohibited to optional to each year and, consequently, will cause
the collection of information burden. On mandated.
Finally, we expect that the following 208 While we expect the requirement to disclose
balance, however, we expect the
variations from the proposals will these expense and use of proceeds amounts will
variations will not increase the
increase the collection of information increase the collection of information burden of
collection of information burden. Form D, we also expect that our adoption of an
burden of Form D:
We expect that the following • Require amendments to report the additional exception from the requirement to
variations from the proposals will lessen amend Form D for specified changes in these
addition of executive officers, directors amounts will limit the increase.
the collection of information burden of and promoters in all offerings, and not 209 We estimate the burden of Form D to be 4.0
Form D: provide an exception from this hours per response of which one hour is borne
• Provide that if a Form D filing requirement for offerings that last more internally and three hours are borne externally.
otherwise is due on a Saturday, Sunday than a year in some circumstances;
210 Also after we issued the proposing release and
or holiday, it will be due on the first submitted the related request to OMB, we obtained
• Require that when both an slight corrections to the fiscal year 2006 data we
business day following; individual and the individual’s provided in the proposing release and request. The
• Eliminate the proposed requirement associated broker-dealer are disclosed, corrected data for fiscal year 2006 is that 16,879
to provide the issuer’s Commission file the issuer must present the CRD companies made 25,717 Form D filings and, of
number (if any); these companies, 15,969 (94.6%) did not report
number, if any, for both rather than just under the Exchange Act and 910 (5.4%) did report
• Provide additional exceptions from
one; and under the Exchange Act. If we had calculated the

the requirement to amend Form D for • Require disclosure of the following estimate in the proposing release using the
changes in: amounts or, if not known, an estimate: corrected figures for fiscal year 2006, we would
have estimated that, as a result of the proposed
Æ The address or relationship to the Æ Expenses for amounts paid for sales amendments, an additional 18,700 respondents
issuer of a related person identified in commissions and, separately stated, would file a Form ID each year and, as a result,
response to Item 3 of Form D; finders’ fees; and would cause an additional burden of 2805 hours.
an additional burden of 2895 hours.211 consistent with the experiences of these collections of information should
Accordingly, we have withdrawn the several members of the committees that be in writing, refer to File No. S7–12–
request we submitted to OMB and plan together provided the comment. We are 07, and be submitted to the Securities
to replace it with a new request. not aware of respondents generally and Exchange Commission, 100 F
Consistent with our belief that the incurring response time in excess of our Street, NE., Washington, DC 20549.
variations between what we expressly estimate of .15 hours per response for OMB is required to make a decision
proposed and what we adopted will not Form ID and continue to believe the concerning the collection of information
affect the number of Forms D filed, we estimate to be appropriate. We between 30 and 60 days after
believe that the variations will not affect acknowledge the general concerns with publication of this release.
our estimate of the Form ID collection the Form ID process but we believe it Consequently, a comment to OMB is
of information burden. should be required for Form D filers as best assured of having its full effect if
it is for other filers on EDGAR. OMB receives it within 30 days of
C. Comments on Collection of We believe that the new online publication.
Information Burdens system should be as secure as our
EDGAR system in general because it V. Cost-Benefit Analysis
We solicited comment in the
proposing release on the PRA estimates will be a part of the EDGAR system and, A. Background
we provided there and we solicit as such, its filings will be disseminated As proposed, the adopted
comment on the revised estimates we on EDGAR and displayed on the amendments restructure the information
now provide in this release. Commission’s public Web site. In order required by Form D and mandate the
One commenter expressly addressed to achieve that uniform degree of electronic filing of Form D information
our PRA estimate of the amount of the security, we believe it is appropriate to after a period of time during which
estimated burden per response for Form require issuers that seek to file Form D electronic filing is voluntary. Currently,
ID and that commenter 212 and another to complete the same Form ID much of the information required by
commenter 213 expressed concern about authentication process to obtain the Form D appears to be useful and
the potential burdens resulting from the same access codes as those persons or justified in the interests of investor
requirement to file Form ID in order to entities who seek to file with the protection and capital formation. It also
obtain the access codes necessary to file Commission for many other reasons. appears that some useful information
a Form D on EDGAR. The commenter We solicit comment on the expected that could be required by Form D is not
that expressly addressed our PRA PRA effects of the amendments, required currently. On the other hand,
estimate of .15 hours per response for including the following: Form D currently requires some
Form ID stated that the estimate is not • The accuracy of our estimates of the information that may no longer be
additional burden hours that will result useful. Our staff receives many inquiries
211 We arrived at our revised estimate that an from adoption of the amendments; from market participants suggesting that
additional 19,300 respondents would file a Form ID • Whether the adopted changes to the
Form D could be clarified and
each year based on the following information and collections of information are necessary
analysis. In fiscal year 2007, 17,519 companies simplified. Moreover, the absence of an
for the proper performance of the electronic system for filing Form D
made 27,843 Form D filings. Of these companies,
16,655 (95.1%) did not report under the Exchange functions of the Commission, including information prevents issuers from filing
Act and 864 (4.9%) did report under the Exchange whether the information will have through efficient modern methods and
Act. The annual number of Form D filings rose from practical utility; limits the usefulness of the information
17,390 in fiscal year 2002 to 27,843 in fiscal year • Ways to enhance the quality, utility
2007 for an average increase of approximately 2100 collected on Form D. The rules we
and clarity of the information to be
Form D filings per year. Assuming the number of adopt today address deficiencies in the
Form D filings continues to increase by 2100 filings collected;
Form D data collection requirements
per year for each of the next three years, the average • Ways to minimize the burden of the
number of Form D filings in each of the next three and process. We expect that the
collections of information on those who
years would be about 32,100. Assuming that the amendments, in general, will provide
respond, including through the use of
ratio of the number of companies that make a Form benefits by clarifying, simplifying and
D filing to the number of Form D filings in fiscal automated collection techniques or
updating the information requirements
year 2007 remains constant over the next three other forms of information technology;
years, an average of about 20,200 companies would of Form D and modernizing the related
and
make Form D filings in each of the next three years. • Any effects of the amendments on information capture process.
Assuming also that the ratio between the number We solicited comment on the
of non-reporting and reporting companies under the any other collections of information not
expected benefits and costs and on any
Exchange Act that made Form D filings in fiscal previously identified.
others that may result from adoption of
year 2007 remains constant over the next three Any member of the public may direct
years, an average of about 19,300 non-reporting and the proposed changes as well as
to us any comments concerning these
900 reporting companies would make Form D suggested alternatives. We also
burden estimates and suggestions for
filings in each of the next three years. Assuming requested that commenters provide
further that all non-reporting companies that would reducing the burdens. Persons
empirical data and other factual support
make a Form D filing would not already have submitting comments on the collection
EDGAR access codes and, as a result, would be for their views to the extent possible. No
of information requirements should
required to file a Form ID, the number of companies commenter expressly addressed the
direct their comments to the OMB,
that would need to file a Form ID as a result of the cost-benefit analysis in the proposing
amendments would on average be about 19,300 per Attention: Desk Officer for the
release but some commenters cited
year over the next three years. Because each Form Securities and Exchange Commission,
ID filing is estimated to require .15 hours, the total benefits consistent with those described
Office of Information and Regulatory
additional burden would, on average, be about 2895 immediately above in the course of
Affairs, Washington, DC 20503, and
hours per year over the next three years (19,300 making a variety of suggestions and
Forms ID × .15 hours per Form ID). We consider the send a copy of the comments to Nancy
observations. We discuss these
average number of Form ID filings expected to be M. Morris, Secretary, Securities and

made per year over the next three years because the comments throughout the release as
Exchange Commission, 100 F Street,
PRA requires that our estimates represent the applicable.214
average yearly burden over a three-year period.
NE., Washington, DC 20549–9303, with
212 See letter from ABA (focusing particularly on reference to File No. S7–12–07. 214 As to benefits, for example, we noted that one
the burden on non-reporting companies). Requests for materials submitted to commenter stated that if one-stop filing were
213 See letter from Stephen A. Marcus. OMB by the Commission with regard to Continued
B. Benefits application to use the information. small businesses and others filing Form
We expect the amendments to benefit Unlike information filed with us D information.
electronically, paper filings are available The conversion to electronic filing of
issuers, regulators and members of the
from us only in person in our Public Form D information through the Internet
public. In particular, the amendments
Reference Room or by means of a mail in an interactive data format will result
should:
request. We charge a nominal fee for in creation of a database of Form D
• Ease filing burdens;
copies of Form D filings. Some Form D information that will allow us and
• Result in better public availability
filings are available at higher cost others to better aggregate data on the
of Form D information; private and limited offering securities
• Enhance the utility of Form D as a through private vendors over the
Internet and through telephone requests. markets and the use of the various
means to promote federal and state Regulation D exemptions. Further, the
uniformity and coordination; and For over 20 years, Form D has served software we will use for the Form D
• Improve collection of data for as a means to promote federal and state electronic filings will require that filers
Commission enforcement and uniformity and coordination in address each required data field in the
rulemaking efforts. securities regulation by providing a form, thus reducing incomplete filings.
The amendments should ease filing uniform notification form that can be Because of these and other features, our
burdens because filers should find it filed with the Commission and with Form D electronic filing system should
easier to respond to the revised state securities regulators. The assist in our enforcement efforts and
information requirements of Form D.215 contemplated electronic filing system ease our ability to make use of filed
It should be easier to respond to the for Form D information will continue Form D information. The Form D
revised information requirements of that tradition and can enhance the information database will allow us to
Form D because they would be clarified, utility of Form D as a means to promote better evaluate our exemptive schemes
simplified and updated. It should be uniformity and coordination between on a continuing basis in order to
easier to file the responsive information federal and state securities regulation. facilitate capital formation in a manner
because issuers will be able to use The availability of Form D consistent with investor protection. The
efficient modern methods of evaluation could lead to improvements
information filed with us through a
information transfer through electronic that would result in significant benefits
searchable electronic database will
filing. Issuers will provide the to companies that rely on the Regulation
enable both federal and state securities
information in data fields by responding D exemptions, especially smaller
regulators to monitor the exempt
to a series of discrete requests for companies, as well as benefits to
securities transaction markets more
information. The fields will be checked investors.
effectively. The system also will permit
automatically for appropriate characters
improved coordination among federal C. Costs
and consistency with other fields and
and state regulators, which is essential
the questions will be accompanied by We expect that the amendments will
to efficient and effective capital
links to clear instructions, definitions, result in some initial and ongoing costs
formation through exempt transactions,
and other helpful information. These to issuers. We also expect, however, that
system features, among others, should especially by smaller companies, and to many issuers will not bear the full range
help to facilitate a relatively easy-to-use investor protection. State securities of costs that may result from the
filing process that will deliver accurate regulators will be able to access the amendments for the reasons described
information quickly, reliably, and information on our Web site to learn if below.
securely. new Form D information of interest to Initial costs will be associated with
Electronic filing of Form D them has been filed. filing a Form ID in order to obtain the
information will result in increased The system will enhance uniformity access codes needed to file Form D
availability of Form D information for and coordination even more if it results information electronically and
regulators and members of the public. in ‘‘one-stop filing,’’ as we and NASAA otherwise preparing to make an initial
The information will be available on our are exploring. One-stop filing will filing of Form D information.217 To file
Web site and, because the Form D filing enable companies to file Form D a Form ID, an issuer must learn the
system will automatically capture and information both with us and with the related electronic filing requirements,
tag data items, the data will be states they designate in one electronic obtain access to a computer and the
interactive and searchable. Our Web site transaction. While that capability will Internet, use the computer to access the
will enable users to view the not be available when Form D electronic Commission’s EDGAR Filer
information in an easy-to-read format, filing with the Commission begins, we Management Web site, respond to Form
download the information into an have been working actively with ID’s information requirements and fax to
existing application, or create an NASAA to achieve that capability as the Commission a notarized
soon as practicable. We understand that authenticating document.218 Similarly,
implemented properly, it would reduce NASAA is considering establishing its
significantly the costs and burdens of preparing and own new electronic system that would 217 Issuers that already have EDGAR access codes
filing Form D with the Commission and the states. would not need to file a Form ID. As further
See letter from ABA. As to costs, for example, we
interface with our system and would discussed in Part IV, however, we assume that
noted that the same commenter stated that the receive filings and collect fees on behalf about 95% of Form D filers do not already have the
absence of a saving feature in the Form D filing of participating state securities codes.
system would virtually require that a careful filer regulators.216 One-stop filing will 218 As discussed in Part IV regarding the PRA, the
prepare a Form D offline on a specially created Commission estimates that approximately 46,400
template and then input all the information online
reduce significantly the costs and
respondents file Form ID each year at an estimated
and, as a result, would risk inputting incorrect burdens of preparing and filing Form D burden of .15 hours per response, all of which is
information and waste time and money. information with the Commission and borne internally by the respondent, for a total
215 Although we believe it will be easier to
with state securities regulators. This annual burden of 6960 hours. As also discussed in
respond to the revised information requirements of could represent a substantial savings for Part IV, we expect that the amendments will cause
Form D, as discussed in Part IV regarding the PRA, an additional 19,300 respondents to file a Form ID
we believe the overall collection of information each year and, as a result, cause an additional
burden of Form D will remain approximately the 216 The Commission’s electronic filing system annual burden of 2895 hours. Assuming a cost of
same as it is today. will not collect fees on behalf of any states. $175 per hour for in-house professional staff, we
in order otherwise to prepare to make an information required by Form D after a In the proposing release, we
initial electronic filing of Form D period of time during which electronic considered the amendments in light of
information, an issuer must learn about filing is voluntary. We believe the the standards set forth in the above
the revised Form D information content amendments, in general, will provide statutory sections. We requested
and electronic filing requirements, benefits by clarifying, simplifying and comment on whether the proposed
obtain access to a computer and the updating the information requirements amendments, if adopted, would impose
Internet, use the computer to access the of Form D and modernizing the related a burden on competition or promote
Form D filing system and respond to information capture process. In efficiency, competition and capital
Form D’s information requirements. particular, as discussed in further detail formation. No commenter expressly
Ongoing costs are those associated above, the amendments should: addressed competition. Commenters
with maintaining the framework • Ease filing burdens; generally addressed issues relating to
developed through the initial costs (for • Result in better public availability the content and mandated electronic
example, updating information required of Form D information; filing of information required by Form
by Form ID) and additional costs arising • Enhance the utility of Form D as a D. As a result, the comments generally
from each subsequent filing of Form D means to promote federal and state related to efficiency and capital
information. uniformity and coordination; and formation. We discuss these comments
We expect that the vast majority of • Improve collection of data for throughout this release, as applicable.
issuers will incur few, if any, additional Commission enforcement and VII. Final Regulatory Flexibility Act
costs related to obtaining computer and rulemaking efforts. Analysis
Internet access. We believe that the vast We understand that private sector
majority of issuers already will have This Final Regulatory Flexibility
businesses currently make Form D
access to a computer and the Internet.219 Analysis has been prepared in
information available to the public for a
accordance with 5 U.S.C. 603. It relates
VI. Consideration of Impact on fee. Although the ready accessibility of to amendments regarding the content
Competition and Promotion of this information at no cost will affect and mandated electronic filing of
Efficiency, Competition and Capital these businesses, we believe that the information required by Form D.
Formation interactive online system used for Form
D information will not discourage the A. Reasons for, and Objectives of, the
Section 23(a)(2) of the Exchange Adopted Amendments
development by private sector
Act 220 requires us, when adopting rules
businesses of additional features that The primary purpose of the
under the Exchange Act, to consider the
the new online system will not provide. amendments adopted is to clarify,
impact that any new rule would have on
Consequently, we believe that the simplify and update the information
competition. In addition, Section
amendments will not have a burden on requirements of Form D and modernize
23(a)(2) prohibits us from adopting any
competition that is not necessary or the related information capture process.
rule that would impose a burden on
appropriate and might promote Currently, much of the information
competition not necessary or
competition in providing Form D required by Form D appears to be useful
appropriate in furtherance of the
information through additional features and justified in the interests of investor
purposes of the Exchange Act.
including those related to the tagged protection and capital formation. It also
Furthermore, Section 2(b) of the
data aspect of the system. appears that some useful information
Securities Act,221 Section 3(f) of the
Eased filing burdens and better public that could be required by Form D is not
Exchange Act,222 and Section 2(c) of the
availability of Form D information required currently. On the other hand,
Investment Company Act 223 require us,
should promote efficiency. For example, Form D currently requires some
when engaged in rulemaking where we
the online system will enable issuers to information that may no longer be
are required to consider or determine
provide Form D information with useful. Our staff receives many inquiries
whether an action is necessary or
modern, rapid and accurate methods from market participants suggesting that
appropriate in the public interest, to
and will enable users of the system to Form D could be clarified and
consider, in addition to the protection of
access Form D information more quickly simplified. Moreover, the absence of an
investors, whether the action will
and easily than through a review of electronic system for filing Form D
promote efficiency, competition and
paper documents. information prevents issuers from filing
capital formation.
The amendments will restructure and Improved collection of data for through efficient modern methods and
mandate the electronic filing of the Commission enforcement and limits the usefulness of the information
rulemaking efforts resulting from the collected on Form D. We believe the
estimate the current Form ID burden cost at amendments will create a Form D amendments, in general, will address
$1,218,000 per year (6960 hours per year × $175 per information database that will allow us the deficiencies in the Form D data
hour), the additional Form ID burden cost resulting to better evaluate our exemptive collection process by clarifying,
from adoption of the amendments at $506,625 per schemes on a continuing basis in order
year (2895 hours per year × $175 per hour) and the simplifying and updating the
total Form ID burden cost that will result from to facilitate capital formation in a information requirements of Form D and
adding the estimated additional Form ID burden manner consistent with investor modernizing the related information
cost to the estimated current Form ID burden cost protection and the evaluation may lead capture process.
will be $1,724,625 per year ((6960 hours per year to improvements that will promote our
+ 2895 hours per year) = 9855 hours per year; 9855 B. Significant Issues Raised by Public
hours per year × $175 per hour = $1,724,625 per capital markets. Similarly, the enhanced
year). utility of Form D as a means to promote Comment
219 A person from an issuer that does not already federal and state uniformity and The Initial Regulatory Flexibility Act
own a computer with Internet access may, for
coordination resulting from the Analysis (‘‘IRFA’’) appeared in the

example, go to a public library to use its computer
and obtain Internet access.
amendments, and in the future, ‘‘one- proposing release. We requested
220 15 U.S.C. 78w(a)(2). stop’’ filing as we and NASAA are comment on any aspect of the IRFA,
221 15 U.S.C. 77b(b). exploring, should lead to improved including the number of small entities
222 15 U.S.C. 78c(f). coordination which will promote capital that would be affected by the proposals,
223 15 U.S.C. 80a–2(c). formation. the nature of the impact, and how to
quantify the impact of the proposals. No professional skills required will be those amendments, we considered the
commenter responded to the request. required to file electronically.228 following alternatives:
We expect that filing electronically • Establishing different compliance or
C. Small Entities Subject to the will increase initial and ongoing costs reporting requirements or timetables
Amendments incurred by some small entities. We also that take into account the resources
The amendments will affect issuers expect, however, that many small available to small entities;
that are small entities. Exchange Act entities will not bear the full range of • Further clarifying, consolidating or
costs that will result from the simplifying the requirements;
Rule 0–10(a) 224 defines an issuer, other
amendments for the reasons described • Using performance rather than
than an investment company, to be a
below. design standards; and
‘‘small business’’ or ‘‘small • Providing an exemption from the
organization’’ for purposes of the Initial costs are those associated with
filing a Form ID in order to obtain the adopted requirements, or any part of
Regulatory Flexibility Act if it had total them, for small entities.
assets of $5 million or less on the last access codes needed to file Form D
information electronically and We believe that, as to small entities,
day of its most recent fiscal year.225 differing compliance, reporting or
Investment Company Act Rule 0–10(a) otherwise preparing to make an initial
filing of Form D information. To file a timetable requirements, a partial or
defines an investment company as a complete exemption from the
‘‘small business’’ or ‘‘small Form ID, an issuer must learn the
related electronic filing requirements, requirements or the use of performance
organization’’ for purposes of the rather than design standards would be
Regulatory Flexibility Act if it, together obtain access to a computer and the
Internet, use the computer to access the inappropriate because these approaches
with other investment companies in the would detract from the completeness
same group of related investment Commission’s EDGAR Filer
Management Web site, respond to Form and uniformity of the Form D database
companies, had net assets of $50 million and, as a result, reduce the expected
or less as of the end of its most recent ID’s information requirements and fax to
the Commission a notarized benefits of better public availability of
fiscal year.226 The amendments will Form D information, enhanced utility of
apply to all issuers that file Form D. authenticating document.229 Similarly,
in order otherwise to prepare to make an Form D as a means to promote federal
As previously noted, in fiscal year initial electronic filing of Form D and state uniformity, and improved
2007, 17,519 issuers made Form D information, an issuer must learn about collection of data for Commission
filings. We believe that many of these the revised Form D information content enforcement and rulemaking efforts.
issuers are small entities but currently Further, we believe the adopted Form D
and electronic filing requirements,
we do not collect information on total filing system will be relatively easy to
obtain access to a computer and the
assets to determine if they are small use.
Internet, use the computer to access the
entities for purposes of this analysis. We considered further clarifying,
Form D filing system and respond to
consolidating or simplifying the
D. Projected Reporting, Recordkeeping Form D’s information requirements.
adopted Form D information and
and Other Compliance Requirements Ongoing costs are those associated
electronic filing requirements. During
with maintaining the framework
2003, the Commission’s Office of Small
Before the effective date of the rule developed through the initial costs (for
Business Policy (OSBP) reviewed the
and form amendments adopted in this example, updating information required
types of errors, omissions, and
release, issuers must file Form D by Form ID) and additional costs arising
misstatements more commonly found in
information in paper. The amendments from each subsequent filing of Form D
Form D filings as well as the types of
will require all issuers, including small information.
We expect that the vast majority of questions typically received through
entities, to submit somewhat different
small entities will need to incur few, if phone calls from the public associated
Form D information online using the
any, additional costs related to with the form. We also have considered
Internet after a phase-in period during
obtaining computer and Internet access. the electronic filing requirements
which electronic filing is optional. All
We believe that the vast majority of related to Exchange Act Forms 3, 4 and
issuers filing electronically will need to
small entities already will have access 5, the manner in which their online
file a Form ID electronically to obtain
to a computer and the Internet.230 filing system has operated and the
the access codes needed to use the Form
suitability of that system as a model for
D filing system if they do not already E. Agency Action To Minimize Effect on the online system for Form D
have the codes.227 The only additional Small Entities information. Based in part on OSBP’s
224 17
The Regulatory Flexibility Act directs review and our consideration of the
CFR 240.0–10(a).
225 Securities us to consider significant alternatives electronic filing of Forms 3, 4 and 5, we
Act Rule 157(a) [17 CFR 230.157(a)]
generally defines an issuer, other than an that would accomplish our stated believe that the adopted Form D
investment company, to be a ‘‘small business’’ or objectives, while minimizing any information and electronic filing
‘‘small entity’’ for purposes of the Regulatory significant adverse impact on small requirements are clear and
Flexibility Act if it had total assets of $5 million or straightforward.
less on the last day of its most recent fiscal year and entities. In connection with the
it is conducting or proposing to conduct a securities
We solicited comment on whether
offering of $5 million or less. For purposes of our 228 Although we believe it will be easier to differing compliance, reporting or
analysis of issuers other than investment companies respond to the revised information requirements of timetable requirements, a partial or
in this Part VII of the release, however, we use the Form D, as discussed in Part IV, we believe the complete exemption, or the use of
Exchange Act definition of ‘‘small business’’ or overall collection of information burden of the form
‘‘small entity’’ because that definition includes will remain approximately the same.
performance rather than design
more issuers than does the Securities Act definition 229 As discussed in Part IV, the Commission has standards would be consistent with our
and, as a result, assures that the definition we use estimated the collection of information burden of described main goal of addressing
would not itself lead to an understatement of the Form ID as .15 hours per response, all of which is deficiencies in the Form D data
impact of the amendments on small entities. borne internally by the respondent.
226 17 CFR 270.0–10(a). 230 A person from a small entity that does not
collection process. We also solicited
227 As further discussed in Part IV, however, we already own a computer with Internet access can,
comment on the availability of
assume that about 95% of Form D filers will not for example, go to a public library to use its technology to complete Form D online
already have the codes. computer and obtain Internet access. and whether public companies should
be phased in to mandated electronic general solicitation or general (i) Notices filed before September 15,
Form D filing sooner than private advertising; Provided, however, that 2008; and
companies. No commenter responded to publication by an issuer of a notice in (ii) Notices filed on or after September
these requests. As discussed previously accordance with § 230.135c or filing 15, 2008 in paper format under
in this release, however, we are with the Commission by an issuer of a paragraph (a) of this § 230.503T using
providing a period during which notice of sales on Form D (17 CFR Temporary Form D (17 CFR 239.500T).
issuers, regardless of size, will have the 239.500) in which the issuer has made (2) To a notice filed in paper or
option of filing electronically or in a good faith and reasonable attempt to electronic format on or after September
paper. comply with the requirements of such 15, 2008 using Form D (17 CFR
form, shall not be deemed to constitute 239.500), must use Form D (17 CFR
VIII. Statutory Basis and Text of general solicitation or general 239.500) and comply with § 230.503
Amendments advertising for purposes of this section; regarding when an amendment can or
We are adopting the amendments this Provided further, that, if the must be filed and what an amendment
release describes under the authority in requirements of § 230.135e are satisfied, must contain.
sections 2(a), 3(b), 4(2), 19(a), 19(d), and providing any journalist with access to (e) A notice on Form D shall be
28 of the Securities Act,231 sections 3(b), press conferences held outside of the considered filed with the Commission
23(a), and 35A of the Exchange Act,232 United States, to meetings with issuer or under paragraph (a) of this section:
section 319(a) of the Trust Indenture selling security holder representatives (1) As of the date on which it is
Act,233 and section 38 of the Investment conducted outside of the United States, received at the Commission’s principal
Company Act.234 or to written press-related materials office in Washington, DC; or
released outside the United States, at or (2) As of the date on which the notice
List of Subjects in 17 CFR Parts 230, is mailed by means of United States
in which a present or proposed offering
232 and 239 registered or certified mail to the
of securities is discussed, will not be
Reporting and recordkeeping deemed to constitute general solicitation Commission’s principal office in
requirements, Securities. or general advertising for purposes of Washington, DC, if the notice is
Text of Amendments this section. delivered to such office after the date on
* * * * * which it is required to be filed.
■ For the reasons set out in the ■ 3. Add § 230.503T to read as follows:
(f) This temporary § 230.503T and
preamble, we amend Title 17, Chapter II accompanying note will expire on
of the Code of Federal Regulations as § 230.503T Filing of notice of sales. March 16, 2009.
follows: ■ 4. Revise § 230.503 to read as follows:
Note to Rule 503T: This is a special
PART 230—GENERAL RULES AND temporary section that applies instead of § 230.503 Filing of notice of sales.
§ 230.503 only to issuers that file with the
REGULATIONS, SECURITIES ACT OF Commission a notice on Temporary Form D (a) When notice of sales on Form D is
1933 (17 CFR 239.500T) or Form D (17 CFR required and permitted to be filed.
239.500) or an amendment to such a notice (1) An issuer offering or selling
■ 1. The authority citation for Part 230
in paper format on or after September 15, securities in reliance on § 230.504,
continues to read in part as follows: 2008 but before March 16, 2009. § 230.505, or § 230.506 must file with
Authority: 15 U.S.C. 77b, 77c, 77d, 77f, the Commission a notice of sales
(a) An issuer offering or selling
77g, 77h, 77j, 77r, 77s, 77z–3, 77sss, 78c, 78d, containing the information required by
78j, 78l, 78m, 78n, 78o, 78t, 78w, 78ll(d), securities in reliance on § 230.504,
§ 230.505, or § 230.506 shall file with Form D (17 CFR 239.500) for each new
78mm, 80a–8, 80a–24, 80a–28, 80a–29, 80a–
30, and 80a–37, unless otherwise noted. the Commission at its principal office at offering of securities no later than 15
100 F Street, NE., Washington, DC calendar days after the first sale of
* * * * * securities in the offering, unless the end
20549 two copies in paper format of a
■ 2. Amend § 230.502 by revising notice on Temporary Form D (17 CFR of that period falls on a Saturday,
paragraph (c) to read as follows: 239.500T) or Form D (17 CFR 239.500) Sunday or holiday, in which case the
§ 230.502 General conditions to be met. in paper format no later than 15 days due date would be the first business day
after the first sale of securities. following.
* * * * * (2) An issuer may file an amendment
(c) Limitation on manner of offering. (b) One copy of every notice on Form
D shall be manually signed by a person to a previously filed notice of sales on
Except as provided in § 230.504(b)(1),
duly authorized by the issuer. Form D at any time.
neither the issuer nor any person acting (3) An issuer must file an amendment
(c) If sales are made under § 230.505
on its behalf shall offer or sell the to a previously filed notice of sales on
and the issuer files Temporary Form D
securities by any form of general Form D for an offering:
(17 CFR 239.500T), the filing shall
solicitation or general advertising, (i) To correct a material mistake of
contain an undertaking by the issuer to
including, but not limited to, the fact or error in the previously filed
furnish the Commission, upon the
following: notice of sales on Form D, as soon as
written request of its staff, the
(1) Any advertisement, article, notice
information furnished by the issuer practicable after discovery of the
or other communication published in
under § 230.502(b)(2) to any purchaser mistake or error;
any newspaper, magazine, or similar (ii) To reflect a change in the
that is not an accredited investor.
media or broadcast over television or information provided in the previously
(d) Amendments in paper format:
radio; and (1) To the notices described in filed notice of sales on Form D, as soon
(2) Any seminar or meeting whose
paragraphs (d)(1)(i) and (ii) of this as practicable after the change, except
attendees have been invited by any
section, must use Temporary Form D that no amendment is required to reflect

231 15 U.S.C. 77b(a), 77c(b), 77d(2), 77s(a), 77s(d),
(17 CFR 239.500T) but need only report a change that occurs after the offering
and 77z–3. the issuer’s name and the information terminates or a change that occurs solely
232 15 U.S.C. 78c(b), 78w(a), and 78ll. required by Part C and any material in the following information:
233 15 U.S.C. 77sss(a). change in the facts from those set forth (A) The address or relationship to the
234 15 U.S.C. 80a–37. in Parts A and B: issuer of a related person identified in
response to Item 3 of the notice of sales Authority: 15 U.S.C. 77f, 77g, 77h, 77j, § 232.201 Temporary hardship exemption.
on Form D; 77s(a), 77z–3, 77sss(a), 78c(b), 78l, 78m, 78n, (a) If an electronic filer experiences
(B) An issuer’s revenues or aggregate 78o(d), 78w(a), 78ll, 80a–6(c), 80a–8, 80a–29, unanticipated technical difficulties
net asset value; 80a–30, 80a–37, and 7201 et seq.; and 18
preventing the timely preparation and
(C) The minimum investment amount, U.S.C. 1350.
submission of an electronic filing, other
if the change is an increase, or if the * * * * * than a Form 3 (§ 249.103 of this
change, together with all other changes ■ 6. Amend § 232.100 by revising chapter), a Form 4 (§ 249.104 of this
in that amount since the previously paragraph (a) to read as follows: chapter), a Form 5 (§ 249.105 of this
filed notice of sales on Form D, does not chapter), a Form ID (§§ 239.63, 249.446,
result in a decrease of more than 10%; § 232.100 Persons and entities subject to
mandated electronic filing. 269.7 and 274.402 of this chapter), a
(D) Any address or state(s) of Form TA–1 (§ 249.100 of this chapter),
solicitation shown in response to Item * * * * * a Form TA–2 (§ 249.102 of this chapter),
12 of the notice of sales on Form D; (a) Registrants and other entities a Form TA–W (§ 249.101 of this chapter)
(E) The total offering amount, if the whose filings are subject to review by or a Form D (§ 239.500 of this chapter),
change is a decrease, or if the change, the Division of Corporation Finance; the electronic filer may file the subject
together with all other changes in that * * * * * filing, under cover of Form TH
amount since the previously filed notice ■ 7. Amend § 232.101 by: (§§ 239.65, 249.447, 269.10 and 274.404
of sales on Form D, does not result in ■ a. Removing the word ‘‘and’’ at the of this chapter), in paper format no later
an increase of more than 10%; end of paragraph (a)(1)(xi);
(F) The amount of securities sold in than one business day after the date on
■ b. Removing the period and adding ‘‘; which the filing was to be made.
the offering or the amount remaining to
and’’ at the end of paragraph (a)(1)(xii); * * * * *
be sold;
■ c. Adding paragraph (a)(1)(xiii);
(G) The number of non-accredited ■ 10. Amend § 232.202 by revising
■ d. Removing the word ‘‘and’’ at the
investors who have invested in the paragraph (a) introductory text to read
offering, as long as the change does not end of paragraph (b)(8)(ii); as follows:
■ e. Removing the period and adding ‘‘;
increase the number to more than 35;
(H) The total number of investors who and’’ at the end of paragraph (b)(9); § 232.202 Continuing hardship exemption.
have invested in the offering; or ■ f. Adding paragraph (b)(10); and (a) An electronic filer may apply in
(I) The amount of sales commissions, ■ g. Removing ‘‘, Regulation D writing for a continuing hardship
finders’ fees or use of proceeds for (§§ 230.501–230.506 of this chapter)’’ exemption if all or part of a filing or
payments to executive officers, directors from paragraph (c)(6). group of filings, other than a Form ID
or promoters, if the change is a decrease, The added paragraphs read as follows: (§§ 239.63, 249.446, 269.7 and 274.402
or if the change, together with all other of this chapter) or a Form D (§ 239.500
§ 232.101 Mandated electronic
changes in that amount since the submissions and exceptions. of this chapter), otherwise to be filed in
previously filed notice of sales on Form electronic format cannot be so filed
(a) * * * without undue burden or expense. Such
D, does not result in an increase of more
(1) * * *
than 10%; and written application shall be made at
(xiii) Form D (§ 239.500 of this
(iii) Annually, on or before the first least ten business days prior to the
chapter).
anniversary of the filing of the notice of required due date of the filing(s) or the
sales on Form D or the filing of the most * * * * * proposed filing date, as appropriate, or
recent amendment to the notice of sales (b) * * * within such shorter period as may be
on Form D, if the offering is continuing (10) Form D (§ 239.500 of this chapter) permitted. The written application shall
at that time. but this temporary § 232.101(b)(10) will contain the information set forth in
(4) An issuer that files an amendment expire on March 16, 2009. paragraph (b) of this section.
to a previously filed notice of sales on * * * * * * * * * *
Form D must provide current ■ 8. Amend § 232.104 by revising
information in response to all paragraph (a) to read as follows: PART 239—FORMS PRESCRIBED
requirements of the notice of sales on UNDER THE SECURITIES ACT OF 1933
Form D regardless of why the § 232.104 Unofficial PDF copies included
amendment is filed. in an electronic submission. ■ 11. The authority citation for Part 239
(b) How notice of sales on Form D (a) An electronic submission, other continues to read in part as follows:
must be filed and signed. than a Form 3 (§ 249.103 of this Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s,
(1) A notice of sales on Form D must chapter), a Form 4 (§ 249.104 of this 77z–2, 77z–3, 77sss, 78c, 78l, 78m, 78n,
be filed with the Commission in chapter), a Form 5 (§ 249.105 of this 78o(d), 78u–5, 78w(a), 78ll, 78mm, 80a–2(a),
electronic format by means of the chapter), a Form ID (§§ 239.63, 249.446, 80a–3, 80a–8, 80a–9, 80a–10, 80a–13, 80a–
Commission’s Electronic Data 269.7 and 274.402 of this chapter), a 24, 80a–26, 80a–29, 80a–30, and 80a–37,
Gathering, Analysis, and Retrieval unless otherwise noted.
Form TA–1 (§ 249.100 of this chapter),
System (EDGAR) in accordance with a Form TA–2 (§ 249.102 of this chapter), * * * * *
EDGAR rules set forth in Regulation S– a Form TA–W (§ 249.101 of this chapter) ■ 12. Add § 239.500T and Temporary
T (17 CFR Part 232). or a Form D (§ 239.500 of this chapter), Form D (referenced in § 239.500T) to
(2) Every notice of sales on Form D may include one unofficial PDF copy of read as follows:
must be signed by a person duly each electronic document contained
§ 239.500T Temporary Form D, notice of
authorized by the issuer. within that submission, tagged in the sales of securities under Regulation D and
format required by the EDGAR Filer
section 4(6) of the Securities Act of 1933.

PART 232—REGULATION S–T— Manual.
GENERAL RULES AND REGULATIONS Note to § 239.500T: This is a special
* * * * *
FOR ELECTRONIC FILINGS temporary section that applies instead of
■ 9. Amend § 232.201 by revising § 239.500 only to issuers that file with the
■ 5. The authority citation for Part 232 paragraph (a) introductory text to read Commission a notice on Temporary Form D
continues to read in part as follows: as follows: (17 CFR 239.500T) or an amendment to such
a notice in paper format on or after (c) When sales are made under (2) As of the date on which the notice
September 15, 2008 but before March 16, § 230.505, the notice shall contain an is mailed by means of United States
2009. During that period, an issuer also may undertaking by the issuer to furnish to registered or certified mail to the
file in paper format an initial notice using the Commission, upon the written
Form D (17 CFR 239.500) but, if it does, the Commission’s principal office in
issuer must file amendments using Form D
request of its staff, the information Washington, DC, if the notice is
(17 CFR 239.500) and otherwise comply with furnished to non-accredited investors. delivered to such office after the date on
all the requirements of § 230.503T. (d) Amendments to notices filed which it is required to be filed.
under paragraph (a) need only report the
(a) Two copies of a notice on this form issuer’s name and the information (f) This temporary § 239.500T and
shall be filed with the Commission no required by Part C and any material accompanying note will expire on
later than 15 days after the first sale of change in the facts from those set forth March 16, 2009.
securities in an offering under in Parts A and B. Note: The text of Temporary Form D
Regulation D (§§ 230.501–230.508 of (e) A notice on Form D shall be (referenced in § 239.500T) does not and this
this chapter) or under section 4(6) of the considered filed with the Commission amendment will not appear in the Code of
Securities Act of 1933. under paragraph (a) of this section: Federal Regulations.
(b) One copy of every notice on Form (1) As of the date on which it is
D shall be manually signed by a person received at the Commission’s principal BILLING CODE 8011–01–P
duly authorized by the issuer. office in Washington, DC; or

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BILLING CODE 8011–01–C that no amendment is required to reflect or if the change, together with all other
■ 13. Revise § 239.500 and Form D a change that occurs after the offering changes in that amount since the
(referenced in § 239.500) to read as terminates or a change that occurs solely previously filed notice of sales on Form
follows: in the following information: D, does not result in an increase of more
§ 239.500 Form D, notice of sales of
(A) The address or relationship to the than 10%; and
securities under Regulation D and section issuer of a related person identified in (iii) Annually, on or before the first
4(6) of the Securities Act of 1933. response to Item 3 of the notice of sales anniversary of the filing of the notice of
(a) When notice of sales on Form D on Form D; sales on Form D or the filing of the most
must be filed. (B) An issuer’s revenues or aggregate recent amendment to the notice of sales
(1) An issuer offering or selling net asset value; on Form D, if the offering is continuing
securities in reliance on § 230.504, (C) The minimum investment amount, at that time.
§ 230.505, or § 230.506 of this chapter or if the change is an increase, or if the
change, together with all other changes (4) An issuer that files an amendment
section 4(6) of the Securities Act of 1933 to a previously filed notice of sales on
must file with the Commission a notice in that amount since the previously
filed notice of sales on Form D, does not Form D must provide current
of sales containing the information information in response to all
required by this form for each new result in a decrease of more than 10%;
(D) Any address or state(s) of requirements of the notice of sales on
offering of securities no later than 15 Form D regardless of why the
calendar days after the first sale of solicitation shown in response to Item
12 of the notice of sales on Form D; amendment is filed.
securities in the offering, unless the end
of that period falls on a Saturday, (E) The total offering amount, if the (b) How notice of sales on Form D
Sunday or holiday, in which case the change is a decrease, or if the change, must be filed and signed.
due date would be the first business day together with all other changes in that (1) A notice of sales on Form D must
following. amount since the previously filed notice be filed with the Commission in
(2) An issuer may file an amendment of sales on Form D, does not result in electronic format by means of the
to a previously filed notice of sales on an increase of more than 10%; Commission’s Electronic Data
Form D at any time. (F) The amount of securities sold in Gathering, Analysis, and Retrieval
(3) An issuer must file an amendment the offering or the amount remaining to System (EDGAR) in accordance with
to a previously filed notice of sales on be sold; EDGAR rules set forth in Regulation S–
Form D for an offering: (G) The number of non-accredited T (17 CFR Part 232).
(i) To correct a material mistake of investors who have invested in the
(2) Every notice of sales on Form D
fact or error in the previously filed offering, as long as the change does not
must be signed by a person duly
notice of sales on Form D, as soon as increase the number to more than 35;
(H) The total number of investors who authorized by the issuer.
practicable after discovery of the
mistake or error; have invested in the offering; Note The text of Form D (referenced in
(ii) To reflect a change in the (I) The amount of sales commissions, § 239.500) does not and this amendment will
information provided in the previously finders’ fees or use of proceeds for not appear in the Code of Federal
filed notice of sales on Form D, as soon payments to executive officers, directors Regulations.
as practicable after the change, except or promoters, if the change is a decrease, BILLING CODE 8011–01–P
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Dated: February 6, 2008. By the Commission.

Nancy M. Morris,
Secretary.
[FR Doc. E8–3545 Filed 2–26–08; 8:45 am]
BILLING CODE 8011–01–C
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Wednesday,

February 27, 2008

24 Release No. 33–7431, at 5 (July 18, 1997) [62

adopt today address these issues. In

CPIC. 77 17 CFR 230.504. Connecticut, respectively.

disclosure of the offering. The Form D 154 17 CFR 232.100(a).

one; and under the Exchange Act. If we had calculated the

average number of Form ID filings expected to be M. Morris, Secretary, Securities and

coordination resulting from the Analysis (‘‘IRFA’’) appeared in the

section, must use Temporary Form D that no amendment is required to reflect

section 4(6) of the Securities Act of 1933.

duly authorized by the issuer. office in Washington, DC; or

Dated: February 6, 2008. By the Commission.

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