The federal government and state governments each have their own securities laws and regulations. If your company is selling securities, it must comply with federal and state securities laws. If a particular offering is exempt under the federal securities laws, that does not necessarily mean that it is exempt from any of the state laws.
Historically, most state legislatures have followed one of two approaches in regulating public offerings of securities, or a combination of the two approaches. Some states review small businesses' securities offerings to ensure that companies disclose to investors all information needed to make an informed investment decision. Other states also analyze public offerings using substantive standards to assure that the terms and structure of the offerings are fair to investors, in addition to the focus on disclosure.
To facilitate small business capital formation, the North American Securities Administrators Association, or NASAA, in conjunction with the American Bar Association, developed the Small Company Offering Registration, also known as SCOR. SCOR is a simplified "question and answer" registration form that companies also can use as the disclosure document for investors. SCOR was primarily designed for state registration of small business securities offerings conducted under the SEC's Rule 504, for sale of securities up to $1,000,000. Currently, over 45 states recognize SCOR. To assist small business issuers in completing the SCOR Form, NASAA has developed a detailed "Issuer's Manual." This manual is available through NASAA.
In addition, a small company can use the SCOR Form, called Form U-7, to satisfy many of the filing requirements of the SEC's Regulation A exemption, for sales of securities of up to $5,000,000, since the company may file it with the SEC as part of the Regulation A offering statement.
To assist small businesses offering in several states, many states coordinate SCOR or Regulation A filings through a program called regional review. Regional reviews are available in the New England, Mid-Atlantic, Midwest and Western regions.
For information about state securities laws, contact your state's securities administrator.
More Information
You can call the SEC's Small Business Ombudsman and Office of Small Business directly at 202-942-2950 to assist you with any questions you may have regarding federal securities laws. You can also write to:
Small Business Ombudsman
U.S. Securities and Exchange Commission
450 Fifth Street, N.W.
Mail Stop 3-4
Washington, D.C. 20549
For copies of SEC forms and recent SEC releases:
Publications Section
U.S. Securities and Exchange Commission
450 Fifth Street N.W.
Washington, D.C. 20549-0019
Telephone: (202)942-4046
E-mail addresses:
e-prospectus@sec.gov
help@sec.gov
Information courtesy of the Securities and Exchange Commission.
