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Washington First State to Propose Rules Chgs. to Accommodate SEC New Electronic Form D

By Jay Fishman

Washington became the first state to propose changes to its Regulation D rules to coordinate with the SEC's recent adoption of amendments to federal Regulation D authorizing electronic filing of Form D through EDGAR. The SEC adoption allows Form D to be submitted in print or electronic format for a six-month period from September 15, 2008 to March 15, 2009. Starting March 16, 2009, new Form D must be filed electronically. A hearing on Washington's proposed rule changes took place April 8, 2008 so that at the time of this post Washington's Department of Financial Institutions is in the process of reviewing the comments made at the hearing, as well as those comments submitted separately during the public comment period, to decide what the final version of its rules will look like. The comments considered will include those made to the Department by the ABA Committee of State Securities Regulation.

Here is a summary of the proposals from Washington, the only state so far to have them:

I. Issuers would file with the Administrator or his or her designee an initial notice on Form D consisting of either: (1) a copy of the notice of sales on Form D filed electronically with the SEC through EDGAR in accordance with Regulation S-T in effect on September 15, 2008; or (2) a temporary Form D in effect from September 15, 2008 through March 15, 2009. Form D would be manually signed by the issuer's duly authorized person or contain a photocopy of a manually signed copy. Form D would be filed in the above manner until a system allowing electronic filing of Form D with the Administrator or his or her designee is implemented and approved by the Administrator.

II. Issuers making an offering under either Rule 505 or 506 of federal Regulation D would file Form D and a $300 fee no later than 15 days after the first sale of the securities in Washington, or on the first business day following that date if the end of the period falls on a Saturday, Sunday or holiday. Issuers would include with the notice a statement indicating either the date of first sale of securities in Washington or that sales have yet to occur in Washington.

III. Issuers could file an amendment to a previously filed Form D at any time. Issuers would have to file an amendment to a previously filed Form D to correct a material mistake on the Form or to reflect a change in the information provided. No amendment would be required for changes that occur after the offering terminates or for changes to specified information.

IV. The prohibition against general solicitation or advertising in Regulation D offerings would not apply to an issuer's publication of a notice made in accordance with SEC Rule 230.135c or a notice of sales on Form D made with a good faith and reasonable attempt to comply with the requirements of Form D. The prohibition against general solicitation or advertising would also not apply to either press conferences or meetings conducted by journalists with representatives of the issuer or selling security holder outside the United States, or to written press release materials distributed outside the United States, in which a proposed or present securities offering is discussed, provided the requirements of SEC Rule 230.135e are complied with.

Full post as published by Jim Hamilton's World of Securities Regulation on April 24, 2008 (boomark / email).