[Federal Register Volume 61, Number 246 (Friday, December 20, 1996)]
[Rules and Regulations]
[Pages 67200-67203]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-32336]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 230, 232 and 239

[Release No. 33-7373]


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

AGENCY: Securities and Exchange Commission.

ACTION: Final rules.

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SUMMARY: The Securities and Exchange Commission (``Commission'') is 
amending Forms SB-1, SB-2, and Regulation A to provide that registrants 
may no longer file their Forms SB-1 and SB-2 registration statements 
and Regulation A materials in the Commission's Regional Offices given 
recently implemented changes to its filing processing programs. All 
such documents must be filed at the Commission's Headquarters in 
Washington, D.C. Regulation S-T, the electronic filing regulation of 
the Commission, also is being amended to reflect this change.

EFFECTIVE DATES: The rule revisions are effective January 21, 1997, 
except that the amendment to Sec. 232.101(c) is effective May 5, 1997.

FOR FURTHER INFORMATION CONTACT: Barbara C. Jacobs or James R. Budge,

[[Page 67201]]

(202) 942-2950, Office of Small Business Review, Division of 
Corporation Finance, Securities and Exchange Commission, 450 Fifth 
Street, NW., Mail Stop 7-8, Washington, DC 20549.

SUPPLEMENTARY INFORMATION: The Commission is adopting amendments to the 
following forms and rules: Form SB-1,1 Form SB-2,2 Rule 
252,3 Rule 254,4 Rule 255,5 Rule 256,6 Rule 
257,7 Rule 259,8 Form 1-A,9 and Form 2-A 10 under 
Regulation A.11 Rule 101(c) of Regulation S-T 12 also is 
being amended to reflect these revisions. The purpose of these 
amendments is to reflect the fact that the Regional Offices of the 
Commission will no longer review small business issuer registration 
forms and Regulation A material.
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    \1\ 17 CFR 239.9.
    \2\ 17 CFR 239.10.
    \3\ 17 CFR 230.252.
    \4\ 17 CFR 230.254.
    \5\ 17 CFR 230.255.
    \6\ 17 CFR 230.256.
    \7\ 17 CFR 230.257.
    \8\ 17 CFR 230.259.
    \9\ 17 CFR 239.90.
    \10\ 17 CFR 239.91.
    \11\ 17 CFR 230.251 et seq.
    \12\ 17 CFR 232.101(c).
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I. Amendments

    Forms SB-113 and SB-214 are special registration 
statement forms for the use of small business issuers 15 to 
register their securities for sale under the Securities Act of 
1933.16 Forms SB-1 and SB-2 provide that a registration statement 
on the Form relating to an initial public offering may be filed either 
at the Commission's Headquarters in Washington, D.C., or in certain 
Regional or District Offices for the region closest to the registrant's 
principal place of business. Regulation A provides an exemption from 
the registration requirements of the Securities Act for any offering 
made in accordance with the conditions of that exemption.17 
Regulation A requires that an offering statement, which contains 
specified information, be filed either at the Commission's Headquarters 
in Washington, D.C. or with certain Regional or District Offices for 
the region in which the issuer's principal business operations are 
conducted or proposed to be conducted.18
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    \13\ This form is available to a small business issuer to raise 
up to $10 million in a 12 month period, under certain conditions.
    \14\ The form is available to any small business issuer to raise 
any dollar amount of funds in cash. It may be used for repeat 
offerings as long as the definition of small business issuer is 
applicable.
    \15\ A small business issuer is a United States or Canadian 
company that has not had more than $25 million in revenues during 
its most recent fiscal year provided that the aggregate market value 
for its outstanding securities held by non-affiliates does not 
exceed $25 million. See Securities Act Rule 405 (17 CFR 230.405) and 
Rule 12b-2 (17 CFR 240.12b-2) under the Securities Exchange Act of 
1934 (``Exchange Act'') (15 U.S.C. 78a et seq.).
    \16\ 15 U.S.C. 77a et seq.
    \17\ 17 CFR 230.251-.263.
    \18\ Securities Act Rule 252.
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    On October 9, 1996, the Commission announced that its Regional 
Offices will no longer review small business issuer registration forms 
and Regulation A filings made in those Offices as of October 15, 
1996.19 Rather, filings made in the Regional Offices would be 
accepted and forwarded promptly for review to the special new 
Headquarters unit that specializes in small company filings and the 
needs of small businesses.
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    \19\ See SEC Press Release No. 96-123 (October 9, 1996).
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II. Purpose of Changes and Effective Dates

    The purpose of today's amendments is to require Forms SB-1 and SB-2 
relating to initial public offerings and Regulation A material that 
previously could have been made at the Regional Offices to be filed 
directly at the Commission's Headquarters in Washington, D.C. On and 
after the effective date of the rule revisions, new filings on Forms 
SB-1 and SB-2, as well as Regulation A material, will not be accepted 
in any of the Commission's Regional or District Offices. Filings 
pending in the Northeast, Midwest, Central and Pacific Regional 
Offices, as well as the Atlanta District Office, before the effective 
date of these rules will continue to be processed there until 
effectiveness, withdrawal or abandonment unless staffing requirements 
necessitate transfer to the Commission's Headquarters. Post-effective 
and post-qualification amendments relating to documents previously 
filed in the Regional or District Offices should be filed at the 
Commission's Headquarters in Washington, D.C.
    Rule 101(c)(7) of Regulation S-T 20 is being revised to 
reflect the elimination of filing with the Regional or District Offices 
of the Commission. Consequently, all Forms SB-1 and SB-2 will be 
required to be filed via the Commission's Electronic Data Gathering, 
Analysis and Retrieval system (``EDGAR'') rather than in paper (as was 
previously allowed for Regional Office filings).21 In order to 
allow small businesses time to prepare for this change, until May 5, 
1997 filing via EDGAR of Forms SB-1 and SB-2 relating to initial public 
offerings only may be made in paper at the Commission's Headquarters. 
On or after May 5, 1997, these filings must be made via EDGAR absent a 
hardship exemption.22 Regulation A filings will continue to be 
filed in paper pursuant to Rule 101(c) of Regulation S-T.23
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    \20\ 17 CFR 232.101(c)(7).
    \21\ Since mandated electronic filing commenced in April 1993, 
small business issuers have been required to file small business 
registration statement forms via EDGAR if the registrant was subject 
to electronic filing and chose to file at Headquarters.
    \22\ For further information regarding hardship exemptions, see 
Rule 202 of Regulation S-T [17 CFR 232.202].
    Prior to May 5, 1997, registrants may file these registration 
statements electronically. Reports filed with the Commission 
pursuant to Section 13(a) or 15(d) of the Exchange Act [15 U.S.C. 
79m(a) and 79o(d)] must be filed electronically. See Rule 101(a) of 
Regulation S-T [17 CFR 232.101(a)].
    \23\ Current Rule 101(c)(8) of Regulation S-T [17 CFR 
232.101(c)(8)]. Under the amendments being adopted today, (c)(7), 
which prohibits the filing of Regional and District filings via 
EDGAR, will be removed and the succeeding paragraphs will be 
renumbered so that Rule 101(c)(8), which pertains to Regulation A 
filings, will become Rule 101(c)(7) of Regulation S-T.
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    The action being taken today is an important feature of a 
Commission initiative to improve generally the regulatory conditions 
for small business. As noted, the Commission has created a special new 
Headquarters unit that specializes in small company filings and the 
needs of small businesses. The Commission also has appointed a special 
ombudsman to serve as a liaison and agency spokesman for the concerns 
of small business. Regional liaisons for small companies have been 
appointed in each of the Commission's Regional Offices so that a 
Commission staff member is always available locally for entrepreneurs 
to contact. Six small business town hall meetings between the 
Commission and small businesses have been held across the country, and 
will continue to be held, to convey basic information to small 
businesses about some of the fundamental requirements that must be 
addressed when they wish to raise capital through the sale of 
securities. In addition, the Commission is learning more about the 
concerns and problems facing small businesses in raising capital so 
that programs can be designed to meet their needs, consistent with the 
protection of investors. The Commission also maintains a special 
selection of relevant information on its World Wide Web site targeted 
to the interests of and to assist small businesses (http://
www.sec.gov).
    The rule changes are generally effective January 21, 1997. The 
change to Regulation S-T, however, is effective May 5, 1997.

[[Page 67202]]

    The Commission finds in accordance with Section 553(b) of the 
Administrative Procedure Act (``APA'') 24 that this action relates 
solely to agency organization, procedure or practice and that such 
section makes unnecessary the notice and prior publication required by 
that Act. It follows that the Regulatory Flexibility Act is 
inapplicable. Under 5 U.S.C. 804, this rule is exempt from the 
definition of the term ``rule'' for purposes of Chapter 8, entitled 
``Congressional Review of Agency Rulemaking,'' since the rule is a rule 
of ``agency organization, procedure, or practice that does not 
substantially affect the rights or obligations of non-agency parties.''
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    \24\ 5 U.S.C. 553(b).
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III. Statutory Basis

    The amendments to the Commission's rules and forms are being made 
pursuant to Section 19(a) of the Securities Act.

List of Subjects in 17 CFR Parts 230, 232 and 239

    Reporting and recordkeeping, Securities.

Text of the Amendments

    In accordance with the foregoing, Title 17, Chapter II of the Code 
of Federal Regulations is amended as follows:

PART 230--GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933

    1. The authority citation for part 230 continues to read in part as 
follows:

    Authority: 15 U.S.C. 77b, 77f, 77g, 77h, 77j, 77s, 77sss, 78c, 
78d, 78l, 78m, 78n, 78o, 78w, 78ll(d), 79t, 80a-8, 80a-29, 80a-30, 
and 80a-37, unless otherwise noted.
* * * * *
    2. By amending Sec. 230.252 by revising paragraph (e) and the 
second sentence of paragraph (h)(1) to read as follows:


Sec. 230.252  Offering statement.

* * * * *
    (e) Number of copies and where to file. Seven copies of the 
offering statement, at least one of which is manually signed, shall be 
filed with the Commission's main office in Washington, D.C.
* * * * *
    (h) Amendments. (1) * * * Seven copies of every amendment shall be 
filed with the Commission's main office in Washington, D.C. * * *
* * * * *
    3. By amending Sec. 230.254 by revising the first sentence of 
paragraph (b)(1) to read as follows:


Sec. 230.254  Solicitation of interest document for use prior to an 
offering statement.

* * * * *
    (b) * * *
    (1) On or before the date of its first use, the issuer shall submit 
a copy of any written document or the script of any broadcast with the 
Commission's main office in Washington, D.C. (Attention: Office of 
Small Business Review). * * *
* * * * *
    4. By amending Sec. 230.255 by revising the first sentence after 
paragraph (a)(1) to read as follows:


Sec. 230.255  Preliminary offering circulars.

    (a) * * *
    (1) * * *

    An offering statement pursuant to Regulation A relating to these 
securities has been filed with the Securities and Exchange 
Commission. * * *
* * * * *
    5. By amending Sec. 230.256 by revising the introductory text to 
read as follows:


Sec. 230.256   Filing of sales material.

    While not a condition to an exemption pursuant to this provision, 
seven copies of any advertisement or written communication, or the 
script of any radio or television broadcast, shall be filed with the 
main office of the Commission in Washington, D.C.
* * * * *
    6. By amending Sec. 230.257 by revising the first sentence of the 
introductory text to read as follows:


Sec. 230.257  Report of sales and use of proceeds.

    While not a condition to an exemption pursuant to this provision, 
the issuer and/or each selling security holder shall file seven copies 
of a report concerning sales and use of proceeds on Form 2-A 
(Sec. 239.91 of this chapter), or other prescribed form with the main 
office of the Commission in Washington, D.C. * * *
* * * * *
    7. By amending Sec. 230.259 by revising the last sentence of 
paragraph (a) to read as follows:


Sec. 230.259  Withdrawal or abandonment of offering statements.

    (a) * * * The application for withdrawal shall state the reason the 
offering statement is to be withdrawn, shall be signed by an authorized 
representative of the issuer and shall be provided to the main office 
of the Commission in Washington, D.C. * * *

PART 232--REGULATION S-T--GENERAL RULES AND REGULATIONS FOR 
ELECTRONIC FILINGS

    8. The authority citation for part 232 continues to read as 
follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s(a), 77sss(a), 
78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll(d), 79t(a), 80a-8, 80a-
29, 80a-30 and 80a-37.


Sec. 232.101  [Amended]

    9. By amending Sec. 232.101 by removing paragraph (c)(7) and by 
redesignating paragraphs (c)(8) through (c)(20) as paragraphs (c)(7) 
through (c)(19).

PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

    10. The authority citation for part 239 continues to read in part 
as follows:

    Authority: 15 U.S.C. 77f, 77g, 77h, 77j, 77s, 77sss, 78c, 78l, 
78m, 78n, 78o(d), 78w(a), 78ll(d), 79e, 79f, 79g, 79j, 79l, 79m, 
79n, 79q, 79t, 80a-8, 80a-29, 80a-30 and 80a-37, unless otherwise 
noted.
* * * * *


Sec. 239.9  [Form SB-1--Amended]

    11. By amending Form SB-1 (referenced in Sec. 239.9) by revising 
General Instruction A.2. and removing General Instruction A.4. and A.5. 
to read as follows:

    Note: The text of Form SB-1 does not and the amendments will not 
appear in the Code of Federal Regulations.

FORM SB-1

* * * * *

General Instructions

A. Use of Form and Place of Filing

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


Sec. 239.10  [Form SB-2 amended]

    12. By amending Form SB-2 (referenced in Sec. 239.10) by revising 
General Instruction A.2. and removing General Instruction A.4. to read 
as follows:

    Note: The text of Form SB-2 does not and the amendments will not 
appear in the Code of Federal Regulations.

FORM SB-2

* * * * *

General Instructions

A. Use of Form and Place of Filing

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

[[Page 67203]]

Sec. 239.90  [Form 1-A Amended]

    13. By amending Form 1-A (referenced in Sec. 239.90) by removing 
the last two sentences of General Instruction II.

    Note: The text of Form 1-A does not and the amendments will not 
appear in the Code of Federal Regulations.


Sec. 239.91  [Form 2-A amended]

    14. By amending Form 2-A (Sec. 239.91) by revising General 
Instructions to read as follows:

    Note: The text of Form 2-A does not and the amendments will not 
appear in the Code of Federal Regulations.

FORM 2-A

* * * * *

General Instructions

    The report shall be filed in accordance with the provisions of 
Rule 257 of Regulation A.
    Answer each item in the box(es) or spaces provided. If 
additional space is required for any response, continue the response 
on an attached sheet.
    If the issuer is required to file any report(s) on this form 
subsequent to its initial filing, each subsequent filing shall be 
deemed an amendment to the initial filing. Do not report in any 
amendment responses to Items 3-11 unless the information has 
changed.
    No fee is required to accompany this filing.
    Seven copies of the form shall be filed with the main office of 
the Commission in Washington, D.C. At least one copy of the form 
shall be manually signed; other copies may bear typed or printed 
signatures.
* * * * *
    Dated: December 16, 1996.

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