Earlier this month a group of Congressmen wrote to SEC Chair White (see letter here: http://www.sec.gov/comments/s7-11-13/s71113-114.pdf) regarding state preemption for Regulation A+ offerings. The letter suggests that, at the time that the JOBS Act was being debated and considered, Congress was concerned about sales of securities in Reg A+ offerings to retail investors. However, the letter does not contain any discussion whatsoever of the many investor protection measures contained in the SEC’s Regulation A+ proposal, such as the investment limit, the requirements for robust issuer disclosures in the offering circular, the fact that the SEC would review the offering circulars, the post-sale reporting requirements for Tier 2 Regulation A+ issuers, or any of the other measures incorporated in the proposal. The letter simply notes that Reg A+ offerings will be “smaller, regional offerings,” which is unlikely to be the case for Tier 2 offerings of up to $50 million. At the same time, a bill has advanced in the House Financial Services Committee that would make clear that Congress intended to preempt state review for Tier 2 Regulation A+ offerings. In the absence of state preemption, issuers are unlikely to proceed with Tier 2 Regulation A+ offerings and, instead, will rely on Rule 506 offerings. Securities sold pursuant to Rule 506 are considered “covered securities” and, therefore, these offerings are not subject to state review. The offerings also are not subject to any particular disclosure requirements.