Not unexpectedly, on February 19, 2014, the North American Securities Administrators Association sent a letter to the SEC objecting to the preemption of state authority over small corporate offerings by the SEC in its Regulation A+ Proposal and requesting a meeting with Chair White and the Corporate Finance leadership. The Proposal preempts state securities law review for Tier 2 Regulation A offerings (those up to $50 million) by defining a “qualified purchaser” as any offeree or purchaser in a Tier 2 offering. In the letter, NASAA stated:
We cannot do our job – protect investors or help small businesses access capital and grow their companies – where the Commission attempts to prohibit our review as contemplated in the Regulation A+ Proposal.
The letter highlighted NASAA’s new coordinated, streamlined multi-state review program that appoints lead examiners to review Regulation A+ filings and that it believes will ease regulatory burdens for filers without sacrificing investor protection. NASAA also questioned whether the SEC’s proposal to define “qualified purchaser” to include purchasers in a Regulation A+ offering is consistent with the public interest and the protection of investors standards of the National Securities Markets Improvements Act of 1996. NASAA also said:
There is no doubt in our minds that the Commission and the states, standing together, will be much more effective in protecting our citizens and making Regulation A+ a success for small business filers than we could ever hope to be standing apart.