Revisions to Forms SB-1, SB-2, Regulation A and Regulation S-T With Regard to the Appropriate Place for Filing for Registrants in the Regions Covered by the Northeast, Southeast, Midwest, Central and Pacific Regional Offices

SECURITIES AND EXCHANGE COMMISSION 17 CFR Parts 230, 232 and 239 [Release No. 33–7373] Revisions to Forms SB–1, SB–2, Regulation A and Regulation S-T With Regard to the Appropriate Place for Filing for Registrants in the Regions Covered by the Northeast, Southeast, Midwest, Central and Pacific Regional Offices AGENCY: Securities and Exchange Commission. ACTION: Final rules. SUMMARY: The Securities and Exchange Commission (‘‘Commission’’) is amending Forms SB–1, SB–2, and Regulation A to provide that registrants may no longer file their Forms SB–1 and SB–2 registration statements and Regulation A materials in the Commission’s Regional Offices given recently implemented changes to its filing processing programs. All such documents must be filed at the Commission’s Headquarters in Washington, D.C. Regulation S-T, the electronic filing regulation of the Commission, also is being amended to reflect this change. EFFECTIVE DATES: The rule revisions are effective January 21, 1997, except that the amendment to § 232.101(c) is effective May 5, 1997. FOR FURTHER INFORMATION CONTACT:
Barbara C. Jacobs or James R. Budge,

Federal Register / Vol. 61, No. 246 / Friday, December 20, 1996 / Rules and Regulations 67201 1 17 CFR 239.9. 2 17 CFR 239.10. 3 17 CFR 230.252. 4 17 CFR 230.254. 5 17 CFR 230.255. 6 17 CFR 230.256. 7 17 CFR 230.257. 8 17 CFR 230.259. 9 17 CFR 239.90. 10 17 CFR 239.91. 11 17 CFR 230.251 et seq. 12 17 CFR 232.101(c). 13This form is available to a small business issuer to raise up to $10 million in a 12 month period, under certain conditions. 14The form is available to any small business issuer to raise any dollar amount of funds in cash. It may be used for repeat offerings as long as the definition of small business issuer is applicable. 15A small business issuer is a United States or Canadian company that has not had more than $25 million in revenues during its most recent fiscal year provided that the aggregate market value for its outstanding securities held by non-affiliates does not exceed $25 million. See Securities Act Rule 405 (17 CFR 230.405) and Rule 12b–2 (17 CFR 240.12b–
2) under the Securities Exchange Act of 1934
(‘‘Exchange Act’’) (15 U.S.C. 78a et seq.). 16 15 U.S.C. 77a et seq. 17 17 CFR 230.251-.263. 18Securities Act Rule 252. 19See SEC Press Release No. 96–123 (October 9, 1996). 20 17 CFR 232.101(c)(7). 21Since mandated electronic filing commenced in April 1993, small business issuers have been required to file small business registration statement forms via EDGAR if the registrant was subject to electronic filing and chose to file at Headquarters. 22For further information regarding hardship exemptions, see Rule 202 of Regulation S–T [17 CFR 232.202]. Prior to May 5, 1997, registrants may file these registration statements electronically. Reports filed with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act [15 U.S.C. 79m(a) and 79o(d)] must be filed electronically. See Rule 101(a) of Regulation S–T [17 CFR 232.101(a)]. 23Current Rule 101(c)(8) of Regulation S–T [17 CFR 232.101(c)(8)]. Under the amendments being adopted today, (c)(7), which prohibits the filing of Regional and District filings via EDGAR, will be removed and the succeeding paragraphs will be renumbered so that Rule 101(c)(8), which pertains to Regulation A filings, will become Rule 101(c)(7) of Regulation S–T. (202) 942–2950, Office of Small Business Review, Division of Corporation Finance, Securities and Exchange Commission, 450 Fifth Street, NW., Mail Stop 7–8, Washington, DC 20549. SUPPLEMENTARY INFORMATION: The Commission is adopting amendments to the following forms and rules: Form SB– 1,1 Form SB–2,2 Rule 252,3 Rule 254,4 Rule 255,5 Rule 256,6 Rule 257,7 Rule 259,8 Form 1–A,9 and Form 2–A 10 under Regulation A.11 Rule 101(c) of Regulation S-T12 also is being amended to reflect these revisions. The purpose of these amendments is to reflect the fact that the Regional Offices of the Commission will no longer review small business issuer registration forms and Regulation A material.
I. Amendments
Forms SB–1 13 and SB–2 14 are special registration statement forms for the use of small business issuers 15 to register their securities for sale under the Securities Act of 1933.16 Forms SB–1 and SB–2 provide that a registration statement on the Form relating to an initial public offering may be filed either at the Commission’s Headquarters in Washington, D.C., or in certain Regional or District Offices for the region closest to the registrant’s principal place of business. Regulation A provides an exemption from the registration requirements of the Securities Act for any offering made in accordance with the conditions of that exemption.17 Regulation A requires that an offering statement, which contains specified information, be filed either at the Commission’s Headquarters in Washington, D.C. or with certain Regional or District Offices for the region in which the issuer’s principal business operations are conducted or proposed to be conducted.18 On October 9, 1996, the Commission announced that its Regional Offices will no longer review small business issuer registration forms and Regulation A filings made in those Offices as of October 15, 1996.19 Rather, filings made in the Regional Offices would be accepted and forwarded promptly for review to the special new Headquarters unit that specializes in small company filings and the needs of small businesses.
II. Purpose of Changes and Effective
Dates
The purpose of today’s amendments is to require Forms SB–1 and SB–2 relating to initial public offerings and Regulation A material that previously could have been made at the Regional Offices to be filed directly at the Commission’s Headquarters in Washington, D.C. On and after the effective date of the rule revisions, new filings on Forms SB–1 and SB–2, as well as Regulation A material, will not be accepted in any of the Commission’s Regional or District Offices. Filings pending in the Northeast, Midwest, Central and Pacific Regional Offices, as well as the Atlanta District Office, before the effective date of these rules will continue to be processed there until effectiveness, withdrawal or abandonment unless staffing requirements necessitate transfer to the Commission’s Headquarters. Post￾effective and post-qualification amendments relating to documents previously filed in the Regional or District Offices should be filed at the Commission’s Headquarters in Washington, D.C. Rule 101(c)(7) of Regulation S–T20 is being revised to reflect the elimination of filing with the Regional or District Offices of the Commission. Consequently, all Forms SB–1 and SB– 2 will be required to be filed via the Commission’s Electronic Data Gathering, Analysis and Retrieval system (‘‘EDGAR’’) rather than in paper (as was previously allowed for Regional Office filings).21 In order to allow small businesses time to prepare for this change, until May 5, 1997 filing via EDGAR of Forms SB–1 and SB–2 relating to initial public offerings only may be made in paper at the Commission’s Headquarters. On or after May 5, 1997, these filings must be made via EDGAR absent a hardship exemption.22 Regulation A filings will continue to be filed in paper pursuant to Rule 101(c) of Regulation S–T.23 The action being taken today is an important feature of a Commission initiative to improve generally the regulatory conditions for small business. As noted, the Commission has created a special new Headquarters unit that specializes in small company filings and the needs of small businesses. The Commission also has appointed a special ombudsman to serve as a liaison and agency spokesman for the concerns of small business. Regional liaisons for small companies have been appointed in each of the Commission’s Regional Offices so that a Commission staff member is always available locally for entrepreneurs to contact. Six small business town hall meetings between the Commission and small businesses have been held across the country, and will continue to be held, to convey basic information to small businesses about some of the fundamental requirements that must be addressed when they wish to raise capital through the sale of securities. In addition, the Commission is learning more about the concerns and problems facing small businesses in raising capital so that programs can be designed to meet their needs, consistent with the protection of investors. The Commission also maintains a special
selection of relevant information on its World Wide Web site targeted to the interests of and to assist small businesses (http://www.sec.gov). The rule changes are generally effective January 21, 1997. The change to Regulation S–T, however, is effective May 5, 1997.

67202 Federal Register / Vol. 61, No. 246 / Friday, December 20, 1996 / Rules and Regulations 24 5 U.S.C. 553(b). The Commission finds in accordance with Section 553(b) of the Administrative Procedure Act (‘‘APA’’) 24 that this action relates solely to agency organization, procedure or practice and that such section makes unnecessary the notice and prior publication required by that Act. It follows that the Regulatory Flexibility Act is inapplicable. Under 5 U.S.C. 804, this rule is exempt from the definition of the term ‘‘rule’’ for purposes of
Chapter 8, entitled ‘‘Congressional
Review of Agency Rulemaking,’’ since the rule is a rule of ‘‘agency organization, procedure, or practice that does not substantially affect the rights or obligations of non-agency parties.’’
III. Statutory Basis
The amendments to the Commission’s rules and forms are being made pursuant to Section 19(a) of the Securities Act. List of Subjects in 17 CFR Parts 230, 232 and 239 Reporting and recordkeeping, Securities. Text of the Amendments In accordance with the foregoing, Title 17, Chapter II of the Code of Federal Regulations is amended as follows:
PART 230—GENERAL RULES AND
REGULATIONS, SECURITIES ACT OF 1933
1. The authority citation for part 230
continues to read in part as follows:
Authority: 15 U.S.C. 77b, 77f, 77g, 77h, 77j, 77s, 77sss, 78c, 78d, 78l, 78m, 78n, 78o, 78w, 78ll(d), 79t, 80a–8, 80a–29, 80a–30, and 80a– 37, unless otherwise noted.

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2. By amending § 230.252 by revising
paragraph (e) and the second sentence of paragraph (h)(1) to read as follows:
§ 230.252 Offering statement.

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(e) Number of copies and where to file. Seven copies of the offering statement, at least one of which is manually signed, shall be filed with the Commission’s main office in Washington, D.C.

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(h) Amendments. (1) * * * Seven copies of every amendment shall be filed with the Commission’s main office in Washington, D.C. * * *

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3. By amending § 230.254 by revising
the first sentence of paragraph (b)(1) to read as follows:
§ 230.254 Solicitation of interest document for use prior to an offering statement.

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(b) * * *
(1) On or before the date of its first use, the issuer shall submit a copy of any written document or the script of any broadcast with the Commission’s main office in Washington, D.C. (Attention: Office of Small Business Review). * * *

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4. By amending § 230.255 by revising
the first sentence after paragraph (a)(1) to read as follows:
§ 230.255 Preliminary offering circulars. (a) * * * (1) * * * An offering statement pursuant to Regulation A relating to these securities has been filed with the Securities and Exchange Commission. * * *

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5. By amending § 230.256 by revising
the introductory text to read as follows:
§ 230.256 Filing of sales material. While not a condition to an exemption pursuant to this provision, seven copies of any advertisement or written communication, or the script of any radio or television broadcast, shall be filed with the main office of the Commission in Washington, D.C.

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6. By amending § 230.257 by revising
the first sentence of the introductory text to read as follows:
§ 230.257 Report of sales and use of proceeds. While not a condition to an exemption pursuant to this provision, the issuer and/or each selling security holder shall file seven copies of a report concerning sales and use of proceeds on Form 2–A (§ 239.91 of this chapter), or other prescribed form with the main office of the Commission in Washington, D.C. * * *

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7. By amending § 230.259 by revising
the last sentence of paragraph (a) to read as follows:
§ 230.259 Withdrawal or abandonment of offering statements. (a) * * * The application for withdrawal shall state the reason the offering statement is to be withdrawn, shall be signed by an authorized representative of the issuer and shall be provided to the main office of the Commission in Washington, D.C. * * *
PART 232—REGULATION S–T—
GENERAL RULES AND REGULATIONS FOR ELECTRONIC FILINGS
8. The authority citation for part 232
continues to read as follows:
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 77sss(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll(d), 79t(a), 80a–8, 80a–29, 80a–30 and 80a–37. § 232.101 [Amended]
9. By amending § 232.101 by
removing paragraph (c)(7) and by redesignating paragraphs (c)(8) through (c)(20) as paragraphs (c)(7) through (c)(19).
PART 239—FORMS PRESCRIBED
UNDER THE SECURITIES ACT OF 1933
10. The authority citation for part 239
continues to read in part as follows:
Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77sss, 78c, 78l, 78m, 78n, 78o(d), 78w(a), 78ll(d), 79e, 79f, 79g, 79j, 79l, 79m, 79n, 79q, 79t, 80a–8, 80a–29, 80a–30 and 80a–37, unless otherwise noted.

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§ 239.9 [Form SB–1—Amended]
11. By amending Form SB–1
(referenced in § 239.9) by revising General Instruction A.2. and removing General Instruction A.4. and A.5. to read as follows:
Note: The text of Form SB–1 does not and the amendments will not appear in the Code of Federal Regulations. FORM SB–1

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General Instructions
A. Use of Form and Place of Filing

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2. The small business issuer shall file the
registration statement in the Washington, D.C. office.

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§ 239.10 [Form SB–2 amended]
12. By amending Form SB–2
(referenced in § 239.10) by revising General Instruction A.2. and removing General Instruction A.4. to read as follows:
Note: The text of Form SB–2 does not and the amendments will not appear in the Code of Federal Regulations. FORM SB–2

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General Instructions
A. Use of Form and Place of Filing

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2. Offerings on Form SB–2 shall be filed in
the Washington, D. C. office.

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Federal Register / Vol. 61, No. 246 / Friday, December 20, 1996 / Rules and Regulations 67203 § 239.90 [Form 1–A Amended]
13. By amending Form 1–A
(referenced in § 239.90) by removing the last two sentences of General Instruction II. Note: The text of Form 1–A does not and the amendments will not appear in the Code of Federal Regulations. § 239.91 [Form 2–A amended]
14. By amending Form 2–A (§ 239.91)
by revising General Instructions to read as follows:
Note: The text of Form 2–A does not and the amendments will not appear in the Code of Federal Regulations. FORM 2–A

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General Instructions
The report shall be filed in accordance with the provisions of Rule 257 of Regulation A. Answer each item in the box(es) or spaces provided. If additional space is required for any response, continue the response on an attached sheet. If the issuer is required to file any report(s) on this form subsequent to its initial filing, each subsequent filing shall be deemed an amendment to the initial filing. Do not report in any amendment responses to Items 3–11 unless the information has changed. No fee is required to accompany this filing. Seven copies of the form shall be filed with the main office of the Commission in Washington, D.C. At least one copy of the form shall be manually signed; other copies may bear typed or printed signatures.

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Dated: December 16, 1996.
By the Commission.
Jonathan G. Katz,
Secretary.
[FR Doc. 96–32336 Filed 12–19–96; 8:45 am] BILLING CODE 8010–01–P