We hope that the SEC engages actively with the securities exchanges to facilitate the listing of securities of issuers concurrently with the pricing of their Regulation A+ (a/k/a 3(b)(2)) offerings. The JOBS Act seems to contemplate that some issuers will pursue Regulation A+ offerings, not seek exchange listings and choose to remain non-reporting companies. However, the Act also contemplates that an issuer might conduct a Regulation A+ and concurrently list its securities on a national securities exchange. In fact, one of the paths to preemption depends on a concurrent exchange listing. So, how will this accomplished? The current approach would seem impractical. Now, an issuer would have to file a registration statement on Form 10 (in addition to having prepared, filed and had reviewed an offering statement for the Regulation A+ offering). That is duplicative and costly. Exchange listings in connection with Regulation A+ offerings will, in almost all instances, increase the universe of potential investors, provide significantly enhanced after-market liquidity, and encourage after-market research analyst coverage, which would otherwise be sparce or non-existent. Facilitating exchange listings also would serve to support the SEC's investor protection objectives. A Regulation A+ offering with a contemporaneous exchange listing is a sounder approach than say, a reverse merger.
Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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