Advisories
Corporate and Business Transactions

Revised Form D and Electronic Filing

By  Stuart C. Campbell and Michele L. Buck-Romero
09.15.08
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On Sept. 15, 2008, the amendments to Form D adopted earlier this year by the Securities and Exchange Commission (SEC) became effective.  Pursuant to these amendments, issuers now have the option of filing Form D electronically.  Electronic filing becomes mandatory on March 16, 2009.  During this six-month electronic filing "phase in" period, issuers may file either the revised Form D (referred to simply as “Form D”) or Temporary Form D (the old Form D with some revisions). Both forms may be found at www.sec.gov/info/smallbus/cfformd.htm.

Any company issuing securities pursuant to an exemption from registration under Regulation D should be aware of these changes. The rule amendments are intended to ease the burdens of complying with Form D, facilitate electronic filing, improve and update Form D information requirements, and increase the public's access to Form D information.

Under the Securities Act of 1933, an offer to sell securities must either be registered with the SEC or fall within an exemption from the registration requirements, such as the offering exemptions under Rules 504, 505 and 506 of Regulation D. A company relying upon a Regulation D exemption must file a Form D with the SEC no later than 15 days after the first sale of securities in the offering. Form D serves as the official notice of an exempt offering under Regulation D and includes basic information about the issuer and the offering.

Revisions to Form D's information requirements

With the objectives of eliminating information that is no longer useful and capturing information that could be useful, the rule amendments revise Form D's information requirements effective Sept. 15, 2008 (SEC Release No. 33-8891). The new Form D was restructured to reflect the electronic character of the filing. Included in the revisions are:

  • Eliminating the requirement to identify as “related persons” owners of 10 percent or more of a class of the issuer's equity securities

  • Replacing the requirement to provide a business description with a requirement to classify the issuer by industry using a specified list

  • Requiring reporting of the date of first sale in the offering

  • Requiring reporting of whether the offering is expected to last more than one year

  • Replacing the requirement to disclose information on a wide variety of expenses with a requirement to report only expenses paid for sales commissions and finders' fees

  • Replacing the requirement to disclose the use of proceeds with a requirement to report use of proceeds only to the extent used to make payments to executive officers, directors and promoters

  • Replacing the current federal and state signature requirements with a combined signature requirement

  • Permitting free writing in “clarification” fields to the extent necessary to clarify certain information provided

Electronic filing

Historically, Form D could only be filed with the SEC in paper format. As of Sept.15, 2008, Form D can also be filed electronically using EDGAR, the SEC's electronic filing system. Electronic filing of Form D will be mandatory on March 16, 2009. The electronic filing system tags data items so that it is interactive, searchable, and viewable in an easy-to-read format by the public at www.sec.gov.

In order to access the EDGAR system, issuers must first obtain a CIK and CCC number (login and password). The SEC Corporate Finance Staff provides guidance on electronic filing and obtaining these required numbers at http://www.sec.gov/divisions/corpfin/formdfiling.htm.

In the future the online filing system may also facilitate “one-stop filing” of Form D with the SEC and the states designated by the issuer in a single electronic transaction. This change is expected to reduce the costs and burdens of preparing and filing Form D with the SEC and state securities regulators. While “one-stop filing” is not currently available, the SEC is working to achieve that capability as soon as practicable.

Additional information concerning this rule and a sample of the new electronic Form D format can be found at: http://www.sec.gov/rules/final/2008/33-8891.pdf.

The information presented in this summary should not be construed as legal advice, and readers should consult with qualified securities counsel with respect to the interpretation of and reliance on this rule.

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