This one flew under our radar! In January, Corp Fin published Form D FAQs. According to remarks that Commissioner Mark Uyeda delivered at yesterday’s Small Business Capital Formation Advisory Committee meeting, the FAQs are intended to consolidate existing guidance and are designed to be a “one-stop shop” to quickly address frequent questions posed to the Staff about Form D.

Since they’re relatively concise, here are the 12 FAQs in full:

1. Question: When must an issuer file a Form D?

Answer: Rule 503 of Regulation D (17 CFR 230.500–508) requires an issuer that offers or sells its securities in reliance on the Regulation D exemption[1] to file the Form D notice online using the SEC’s EDGAR (Electronic Data Gathering, Analysis, and Retrieval) system. There are three possible exemptions under the rules comprising Regulation D: Rule 504, Rule 506(b), and Rule 506(c). An issuer that offers or sells its securities in reliance on Section 4(a)(5) of the Securities Act of 1933 also must file a Form D.

A company must file the Form D notice within 15 calendar days after the first sale of securities in the offering. For Form D, the date of first sale is the date on which the first investor is irrevocably contractually committed to invest. If the due date for the Form D falls on a Saturday, Sunday or holiday, the due date is the next business day. An issuer may file a Form D before it has sold any securities. The SEC does not charge any filing fee for a Form D notice or amendment. In addition, paper filings of Forms D are not accepted.

2. Question: What Commission or staff guidance is available on how to answer specific item requirements of Form D?

Answer: The PDF version of Form D available on the SEC website provides general instructions on filing a Form D and amendments, as well as specific item-by-item instructions for the form.

The Commission also provided guidance on each of the items of Form D when it adopted the electronic Form D in Release No. 33–8891 (Feb. 6, 2008). Staff in the Division of Corporation Finance has also provided interpretive guidance on Form D in certain Compliance and Disclosure Interpretations (specifically Securities Act Rules C&DI Nos. 257.02–257.08 and Securities Act Forms C&DI Nos. 130.01–130.15), which provide interpretations in a question-and-answer format in an effort to clarify how staff would interpret or apply certain rules and regulations in specific situations.

3. Question: How do I find a Form D filed on EDGAR?

Answer: All Form D filings, including their accession numbers, are publicly available on the SEC website under search filings . You can also navigate to the filing search from any SEC website page by going to the top left-hand corner and clicking on “Search Filings,” and then clicking “Search Filings” in the drop down menu.

4. Question: How does an issuer obtain access to EDGAR in order to file a Form D?

Answer: New EDGAR filers will need to submit a Form ID to request access to EDGAR. The SEC has a dedicated web page that provides instructions on how to obtain EDGAR access. For questions about these instructions, including difficulties in obtaining a CIK or EDGAR access, contact SEC filer support at (202) 551-8900 and choose Option No. 4.

Once a company has a CIK number and EDGAR access, it can submit Form D and other SEC filings by logging into the EDGAR system. To file a Form D, visit the SEC’s Online Forms Login page and log in. Once logged in, choose “Form D” under “Make a Filing” in the top left corner.

Once logged in, the filer will have only one hour after its last keystroke to complete a Form D filing. Therefore, it is important to gather all the information needed to complete the filing before logging in. The company can compile the information by referring to the PDF version of Form D.

5. Question: What are the consequences of filing a Form D late?

Answer: Rule 503(a) of Regulation D requires the filing of a Form D no later than 15 calendar days after the first sale of securities in an offering conducted in reliance on Regulation D. However, that requirement is not a condition to the availability of the Regulation D exemptions under Rule 504, Rule 506(b) or Rule 506(c). Rule 507 states some of the potential consequences of the failure to comply with Rule 503.

Issuers who did not file a required Form D within the required 15 calendar day period should make a good faith effort to file the Form D as soon as practicable.

6. Question: When are amendments to the Form D required?

Answer: An issuer may file an amendment to a previously filed notice at any time.

An issuer must file an amendment to a previously filed notice for an offering:

– to correct a material mistake of fact or error in the previously filed notice, as soon as practicable after discovery of the mistake or error;

– to reflect a change in the information provided in the previously filed notice, except as provided below, as soon as practicable after the change; and

– annually, on or before the first anniversary of the most recent previously filed notice, if the offering is continuing at that time.

An issuer is not required to file an amendment to a previously filed notice to reflect a change that occurs after the offering terminates. An issuer is also not required to file an amendment to a previously filed notice for a change that occurs solely in the information set forth in Rule 503(a)(3)(ii) and the General Instructions to Form D. The changes that do not require an amendment to a previously filed Form D notice are changes to:

– the address or relationship to the issuer of a related person identified in response to Item 3;

– an issuer’s revenues or aggregate net asset value;

– the minimum investment amount, if the change is an increase, or if the change, together with all other changes in that amount since the previously filed notice, does not result in a decrease of more than 10%;

– any address or state(s) of solicitation shown in response to Item 12;

– the total offering amount, if the change is a decrease, or if the change, together with all other changes in that amount since the previously filed notice, does not result in an increase of more than 10%;

– the amount of securities sold in the offering or the amount remaining to be sold;

– the number of non-accredited investors who have invested in the offering, as long as the change does not increase the number to more than 35;

– the total number of investors who have invested in the offering; and

– the amount of sales commissions, finders’ fees or use of proceeds for payments to executive officers, directors or promoters, if the change is a decrease, or if the change, together with all other changes in that amount since the previously filed notice, does not result in an increase of more than 10%.

An issuer that files an amendment to a previously filed notice must respond to all items of the Form D with current information as of the date the amendment is filed, regardless of why the amendment is filed.

7. Question: When must an issuer file an amendment to an earlier filed Form D versus a new original Form D?

Answer: An amendment to a Form D is required if the offering is continuing and one of the three triggering events requiring an amendment occurs. These triggering events are described in question 6 above and also in the General Instructions to Form D. The issuer’s offering is continuing if the issuer is engaged in an ongoing effort to offer and sell its securities, regardless of whether it has successfully sold any securities.

A new Form D is required to reflect the first sale of securities in a new and distinct offering in reliance on Regulation D. Rule 152(d)(1) provides guidance as to when a Regulation D offering is deemed terminated or completed and Rule 152(c)(2) provides guidance on when a Regulation D offering is deemed to commence. An issuer should also consider Rule 152(b) if it ceased its selling efforts and then recommenced efforts to offer and sell its securities.

8. Question: When conducting a Regulation D offering, do I have to comply with state securities regulations (often called blue sky laws)?

Answer: While the SEC regulates and enforces the federal securities laws, each state has its own securities regulator who enforces what are known as “blue sky” laws. A company selling securities must comply with both federal statutes and regulations and state securities statutes and regulations in the states where securities are offered and sold.

Offers and sales of securities conducted in reliance on Rule 506(b) and Rule 506(c) are not subject to state registration and review. However, those offerings are subject to both state anti-fraud authority and state requirements that may require the issuer to file a notice and a consent to service of process with the states. In addition, issuers must pay any fees required by the states. Companies should contact state securities regulators in the relevant states for further guidance on compliance with state securities law.

More information on compliance with state securities laws is available on the website of the North American Securities Administrators Association (“NASAA”). Information about NASAA’s Electronic Filing Depository database that allows filers to electronically submit their state notice forms and corresponding filing fees to participating state securities regulators is available.

9. Question: Who may sign the Form D?

Answer: Form D must be signed by a person who is duly authorized by the issuer. This requirement is described in Rule 503(b)(2). Signatures must comply with Rule 302 of Regulation S-T.

10. Question: Can an issuer withdraw or delete a Form D filed on EDGAR?

Answer: Generally, no. Once filed, the Form D will be publicly available on EDGAR and generally cannot be withdrawn. In very rare cases the staff may remove a Form D filing from EDGAR if it meets the requirements of Rule 15 of Regulation S-T (17 CFR 232.15). Please consult EDGAR’s How Do I Correct or Delete a Filing for further information.

11. Question: Can an issuer request confidential treatment for any information required by Form D?

Answer: No. An issuer cannot request confidential treatment for any information required by Form D.

12. Question: How should an issuer address Item 12 “Sales Compensation” of Form D if the information requested by this item is not applicable to its Regulation D offering?

Answer: When the information solicited by Item 12 of Form D is not applicable to an issuer’s Regulation D offering because the issuer has not or does not expect to pay directly or indirectly any commission or other similar compensation in connection with the sale of its securities in a Regulation D offering, the issuer should not enter any information in any of the fields under Item 12 of Form D and should proceed directly to Item 13.

While the info in these FAQs isn’t necessarily new – and it’s important to remember the FAQs are simply Staff guidance, not Commission-approved rules – it’s another example of the effort that the Staff is making to improve clarity and predictability. As Commissioner Uyeda noted, Reg D plays a significant role in capital formation for small businesses. Sometimes the “little things” can go a long way.

– Liz Dunshee