116. What would be the costs and benefits of extending eligibility
under

Regulation Crowdfunding to crowdfunding vehicles as proposed?
    117. What would be the costs and benefits of the alternative of
imposing additional conditions on crowdfunding vehicles? What would be
the costs and benefits of the alternative of eliminating or revising
some of the proposed conditions?
b. Security Types Eligible Under Regulation Crowdfunding
    The proposed amendments would narrow the types of securities
eligible under Regulation Crowdfunding to debt securities, equity
securities, and debt securities convertible or exchangeable into equity
securities, including guarantees of such securities, to harmonize the
provisions of Regulation Crowdfunding regarding eligible security types
with those of Regulation A. Other types of securities would be excluded
from eligibility under the proposed amendments. For example, Simple
Agreements for Future Equity (SAFE) securities would no longer be
eligible under Regulation Crowdfunding.
Benefits
    The proposed amendments limiting the scope of securities eligible
under Regulation Crowdfunding are expected to strengthen investor
protection in some instances, to the extent that investors in
Regulation Crowdfunding offerings may have less sophistication and
resources to analyze novel security types with complex payoff
structures that may pose significant valuation challenges.\424\
Further, by providing greater uniformity in security types available in
Regulation Crowdfunding offerings and conforming the types of
securities eligible under Regulation Crowdfunding to those presently
eligible under Regulation A, the proposed amendments are expected to
make it easier for investors to compare securities offered by different
issuers under Regulation Crowdfunding, as well as potentially compare
securities offered under Regulation Crowdfunding with those offered
under Regulation A, facilitating better informed investment decisions.
These benefits of the proposed amendments to Regulation Crowdfunding
investors might be limited for those investors that already take
advantage of the existing disclosures required by Regulation
Crowdfunding (including a description of the terms of securities and
the valuation method used). Further, the continued application of other
Regulation Crowdfunding investor protection provisions (including other
offering circular and periodic disclosure requirements, investment
limits, investor education, and other crowdfunding intermediary
requirements) might reduce the overall benefits of these amendments for
investors.
---------------------------------------------------------------------------

    \424\ See U.S. Securities and Exchange Commission Office of the
Investor Advocate, Report on Activities for Fiscal Year 2016,
available at https://www.sec.gov/advocate/reportspubs/annual-reports/sec-investor-advocate-report-on-activities-2016.pdf; Jamie
Ostrow, Buyer Beware: Securities Are Not Always What They Seem . . .
, CrowdCheck Blog, Aug. 27, 2018, available at https://www.crowdcheck.com/blog/buyer-beware-securities-are-not-always-what-they-seem; and Joseph M. Green & John F. Coyle, Crowdfunding and the
Not-So-Safe SAFE, 102 Va. L. Rev. 168 (2016). But see Jack Wroldsen,
Crowdfunding Investment Contracts, 11 Va. L. & Bus. Rev. 543 (2017).
See also U.S. Securities and Exchange Commission, Investor Bulletin:
Be Cautious of SAFEs in Crowdfunding, available at https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_safes.
    See also Andrew Stephenson, Compliance with Reg CF: When Failure
Becomes Fraud, CrowdCheck Blog, Apr. 23, 2018, available at https://www.crowdcheck.com/blog/compliance-reg-cf-when-failure-becomes-fraud; and FINRA, Be Safe--5 Things You Need to Know About SAFE
Securities and Crowdfunding, available at http://www.finra.org/investors/highlights/5-things-you-need-know-about-safe-securities-and-crowdfunding.
---------------------------------------------------------------------------

Costs
    The proposed amendments limiting the scope of securities eligible
under Regulation Crowdfunding might impose costs on issuers. Limiting
the flexibility to offer the types of securities that are most
compatible with their desired capital structure and financing needs and
most advantageous given the issuer's assessment of market conditions
might cause such issuers to incur a higher cost of capital or forgo a
Regulation Crowdfunding offering. It is difficult to predict what share
of issuers that rely on security types, such as SAFEs, that would no
longer be eligible under Regulation Crowdfunding would change the
security type but continue to rely on Regulation Crowdfunding versus
switching to an offering method that does not limit security types
(such as Regulation D or a Section 4(a)(2) offering) or forgo a
securities offering altogether. Existing data on Regulation
Crowdfunding offerings suggests that a significant share of issuers
relied on security types other than debt and equity.
    We estimate that from inception of Regulation Crowdfunding in May
2016 through December 2019: \425\
---------------------------------------------------------------------------

    \425\ See supra note 12. These estimates are based on data from
Form C or the latest amendment to it, excluding withdrawn offerings.
Equity is comprised of common and preferred equity (including
partnership/membership units and interests). Approximately a third
of Regulation Crowdfunding offerings were by issuers organized as
limited liability companies or as partnerships. Debt is comprised of
straight and convertible debt. Analysis of XML data from Form C does
not allow a granular breakdown of debt security types. In addition,
some of the revenue share agreements remaining in the ``other
security type'' category may have quasi-debt features. SAFEs are
identified by keyword from ``other security type description.''
Anecdotal review suggests that some equity and debt offerings were
denoted as ``other'' in the form. Where detected, such instances
were re-classified manually based on the ``other security type
description'' field. Examples of ``other'' are, for instance,
tokens, simple agreement for future tokens (``SAFTs''), and revenue
participation agreements.
---------------------------------------------------------------------------

     Equity accounted for 46 percent of the number of offerings
and 41 percent of the aggregate target amount sought;
     Debt accounted for 31 percent of the number of offerings
and 33 percent of the aggregate target amount sought; and
     SAFEs accounted for 21 percent of the number of offerings
and 24 percent of the aggregate target amount sought.
    The remainder comprised securities not elsewhere classified (e.g.,
revenue participation agreements and miscellaneous tokens).
    However, if some of these issuers previously relied on SAFEs as a
means of simplifying their capitalization table, the proposed
crowdfunding vehicle provisions might reduce demand for SAFEs and
mitigate the incremental impact of the proposed amendments to eligible
security types. To the extent that the range of security types
permitted under the proposed amendments provides sufficient flexibility
to most issuers with respect to selecting debt and equity features and
voting and non-voting securities, and to the extent that security
payoff structures are priced efficiently by the market, the effects of
limiting security types as proposed on issuer cost of financing might
be limited.
    Some investors might incur costs under the proposed amendments,
particularly investors that relied on existing disclosures about the
terms of offered securities to accurately value such securities and
that found securities with payoff structures other than equity or debt
optimal for their investment strategy. Those investors might opt for
offerings under other exemptions or might have to adjust their
investment strategy to focus on eligible security types.
Effects on Efficiency, Competition, and Capital Formation
    Limiting the scope of eligible types of securities is likely to
limit capital formation under Regulation Crowdfunding for some issuers
that otherwise would undertake the offering of excluded types of
securities. If some of these issuers switch to a type of securities
permitted under the proposed

amendments, or offer the excluded type of securities using another
offering method, such as Regulation D, the net impact of the proposed
amendments on the aggregate amount of capital formation might be
minimal. However, reducing issuer flexibility with respect to security
design in Regulation Crowdfunding offerings might cause some Regulation
Crowdfunding issuers to incur a higher cost of capital.
    The proposed amendments might yield efficiencies for investors by
making it easier to analyze and compare payoff structures of securities
across different offerings, potentially enabling investors to allocate
their capital more efficiently. However, for some investors that have a
sufficient ability to analyze the excluded types of securities and that
seek to include those securities in their portfolio, the proposed
amendments might limit the set of available investment opportunities
and as a result, potentially affect the efficiency of their capital
allocation.
    The aggregate effects of the proposed amendments on competition
among prospective issuers for investor capital are difficult to predict
and would depend on the relative effects of the proposed amendments on
issuer and investor willingness to participate in Regulation
Crowdfunding. On the one hand, if the proposed amendments lead issuers
to exit the Regulation Crowdfunding market, the extent of competition
for investor capital in that market segment might be reduced. On the
other hand, if the proposed amendments draw more investors to the
Regulation Crowdfunding market by making comparisons across offerings
incrementally easier, the effects on competition might be offset. The
reallocation of issuers of excluded securities types to the Regulation
D or other market segments might mitigate such effects.
Reasonable Alternatives
    The proposed amendments would conform the security types eligible
under Regulation Crowdfunding to those of Regulation A. As an
alternative, we could make other modifications to the range of security
types permissible in Regulation Crowdfunding offerings. For example, we
could amend Regulation Crowdfunding to exclude only particular security
types (such as SAFEs or SAFTs) that might be difficult to value for
small investors. The costs and benefits of this alternative, compared
to the proposal, would depend on several factors: Reliance on the
excluded security type today; costs to issuers of using another
offering exemption, such as Regulation D, to offer the excluded
security type; costs to issuers of using a different security type
under Regulation Crowdfunding; and the level of sophistication of
investors in analyzing information and valuing excluded types of
securities. As a further caveat, provisions proscribing highly
specialized security designs might have limited long-term economic
effects in the presence of financial innovation, whereby issuers and
intermediaries might develop security designs that share some but not
all features of the excluded security type and thus comply with the
restriction. We believe that the proposed amendments would provide
sufficient capital structure flexibility for the majority of issuers
while enhancing comparability of payoff structures across Regulation
Crowdfunding offerings.
Request for Comment
    118. How would the proposed amendments to eligible security types
affect Regulation Crowdfunding issuers, investors, and other market
participants?
    119. What would be the costs and benefits of a different set of
eligible security types?
c. Excluding Delinquent Reporting Companies From Eligibility Under
Regulation A
    The proposed amendments would exclude reporting companies that are
not current in periodic reports required under Section 13 or 15(d) of
the Exchange Act from using Regulation A. This exclusion would be
consistent with the exclusion from eligibility under Regulation A of
issuers that are not subject to Exchange Act reporting and that have
not filed required Regulation A periodic reports for the last two
years.
Benefits
    The proposed amendments to make reporting companies that are not
current in periodic reports required under Section 13 or 15(d) of the
Exchange Act ineligible under Regulation A are expected to promote
investor protection and benefit investors by ensuring the availability
of information about issuers required in periodic Exchange Act reports
to Regulation A investors and thus enabling better informed investment
decisions. Excluding companies that are subject to, but not current in,
Exchange Act reporting obligations from eligibility under Regulation A
may reduce the average level of information asymmetry about Regulation
A issuers and incrementally increase investor interest in securities
offered in this market.
    To the extent that the effects of the proposal are driven by
reallocation of reporting companies that are current in reporting
obligations from registered offerings to Regulation A, the effects may
be minimal. As a caveat, the use of Regulation A by reporting companies
has been modest to date,\426\ which may attenuate the effects of
changes to reporting company eligibility under Regulation A. By
extending similar requirements regarding being current in periodic
reports that presently apply in follow-on Regulation A offerings to
reporting companies in initial Regulation A offerings, the proposed
amendments would increase uniformity in eligibility requirements across
different categories of Regulation A issuers and could reduce potential
for investor confusion.
---------------------------------------------------------------------------

    \426\ See supra note 406.
---------------------------------------------------------------------------

Costs
    The proposed amendments to limit the ability of issuers that are
not current in periodic reports required under Section 13 or 15(d) of
the Exchange Act to raise capital under Regulation A might lead to
higher financing costs or reduced ability to raise the required
financing for such issuers.
Effects on Efficiency, Competition, and Capital Formation
    The proposed amendments to make reporting companies that are not
current in periodic reports required under Section 13 or 15(d) of the
Exchange Act ineligible under Regulation A might, on the margin, limit
capital formation by those issuers. At the same time, by ensuring more
timely availability of information in periodic reports to prospective
Regulation A investors, the proposed amendments are expected to
facilitate better informed decisions and more efficient allocation of
investor capital in Regulation A offerings, and, for Regulation A
securities with a secondary market, more informationally efficient
security prices. In turn, if the amendments help alleviate investor
concerns about adverse selection in the Regulation A market, the
proposed amendments might promote greater investor interest in
Regulation A securities, increasing aggregate capital formation in the
Regulation A market.
    These effects on capital formation and efficiency of capital
allocation might be modest if the proposed amendments mainly result in
a reallocation of delinquent reporting company issuers between
Regulation A and other offering methods. We lack the ability to
quantify the extent of such potential switching

between offering methods as a result of the proposed amendments.
Reasonable Alternatives
    As an alternative, we could have required filers to have filed in a
timely manner all reports required to be filed during the prior 12
months, consistent with Form S-3 and F-3 requirements.\427\ This
alternative may benefit investors by incentivizing reporting companies
that use Regulation A to provide timely periodic disclosures. However,
we continue to believe that this alternative might increase costs and
decrease the ability of reporting companies that have failed to timely
file Exchange Act reports during the lookback period to raise follow-on
Regulation A Tier 2 financing.\428\ Further, such conditions are not
imposed on issuers that are not subject to Exchange Act reporting
obligations and that seek to offer Regulation A securities. Overall,
relative to the proposed amendments, we do not expect the effects of
this alternative to be significant given the other incentives that
reporting companies have to remain current in their Exchange Act
reports (e.g., greater secondary market liquidity, not being delisted
from an exchange or downgraded to a lower OTC market tier, future
eligibility for a streamlined registration process, reduced legal
liability, and a reputation for transparency).
---------------------------------------------------------------------------

    \427\ See General Instruction I.A.3 to Form S-3 [17 CFR 239.13];
and General Instruction I.A.2 to Form F-3 [17 CFR 239.33].
    \428\ See 2018 Regulation A Release, at Section IV.B.c.2.
---------------------------------------------------------------------------

Request for Comment
    120. What would be the costs and benefits of excluding reporting
companies that are not current in Exchange Act reporting obligations
from eligibility under Regulation A, as proposed?
    121. What would be the costs and benefits of imposing additional
Regulation A eligibility conditions on issuers that are subject to
Exchange Act periodic reporting obligations, such as timeliness in
periodic reporting?
7. Bad Actor Disqualification Provisions
    The disqualification provisions of Regulation A and Regulation
Crowdfunding currently differ from the disqualification provisions in
Rule 506(d) in defining the lookback period for the disqualification
event through the time of the filing, rather than through the time of
sale. As a result, in certain circumstances, periods of time may exist
during Regulation A and Regulation Crowdfunding offerings where an
offering continues despite an event that would have constituted a
disqualifying event at the time of filing.\429\ In order to harmonize
the disqualification provisions of Regulation A and Regulation
Crowdfunding with those of Rule 506(d) of Regulation D, we propose to
specify that a disqualifying event that occurs at any time during an
offering, not only prior to the filing, would disqualify the bad actor
from further involvement in the offering. However, to reduce the cost
for issuers of monitoring disqualification events that may affect
beneficial owners during an ongoing offering, differently from the
disqualification provision of Rule 506(d), we are proposing to retain
the disqualification lookback period through the time of filing, rather
than through the time of sale, for disqualification events affecting
beneficial owners.
---------------------------------------------------------------------------

    \429\ As discussed in Section II.G above, under Regulation A, if
a covered person triggers one of the disqualifying events in Rule
262, the Commission is able to suspend reliance on the Regulation A
exemption through Rule 258, which requires a notice and hearing
opportunity for the covered person. Furthermore, if a covered person
triggers one of the disqualifying events, the issuer may need to
consider whether it must suspend the offering until it files a post-
qualification amendment to reflect a fundamental change in the
information set forth in the most recent offering statement or post-
qualification amendment. Regulation Crowdfunding, which similarly
measures the lookback from the time of filing of the offering
statement, does not have a suspension provision, similar to
Regulation A, but similarly requires an issuer to amend the offering
statement to disclose material changes, additions, or updates to
information that it provides to investors for offerings that have
not been completed or terminated.
---------------------------------------------------------------------------

Benefits
    By providing greater uniformity in the bad actor disqualification
provisions across Rule 506(d), Rule 262(a), and Rule 503(a), the
proposed amendments might facilitate compliance for issuers,
particularly issuers that undertake different types of exempt offerings
over time. The proposed amendments might further benefit issuers by
reducing or even eliminating the need to undergo a potentially lengthy
and costly Rule 258 suspension process in the event of a disqualifying
event occurring after the filing. By preserving the existing ``through
date of filing'' lookback period provision with respect to
disqualifying events involving beneficial owners, the proposed
amendments are expected to give issuers leeway to raise capital while
managing disqualification monitoring costs.
    The proposed amendments are expected to strengthen investor
protection in cases of disqualifying events occurring after the
initiation of an offering. This benefit is expected to be most salient
for issuers in continuous offerings, which may span multiple months and
years. For example, from June 2015 (when the 2015 Regulation A
amendments raising the offering limit to $50 million took effect)
through December 2019, based on the analysis of Form 1-A data, we
estimate that approximately 80 percent of qualified Regulation A
offerings were conducted on a continuous basis. Based on the analysis
of Form C data from inception of Regulation Crowdfunding through
December 2019, we estimate that the average (median) duration of a
Regulation Crowdfunding offering was approximately four months (three
months).
Costs
    The proposed amendments to the disqualification provisions might
impose costs on issuers and covered persons. Issuers that are
disqualified from an ongoing Regulation A or Regulation Crowdfunding
offering as a result of a disqualification event occurring after filing
might experience an increased cost of capital or a reduced availability
of capital, which could have negative effects on capital formation. By
subjecting additional issuers to the potential for disqualification in
the event of a disqualification event affecting a covered person (other
than a beneficial owner) after the offering has commenced, the proposed
amendments might cause some issuers to discontinue an offering,
resulting in a failure to raise the required capital after some costs
of preparing an offering statement or marketing an offering have
already been incurred. The proposed amendments also might lead some
issuers to incur additional due diligence costs and potentially modify
their policies and procedures to reduce the odds of a disqualifying
event during an ongoing offering (e.g., replacing personnel or avoiding
the participation of covered persons, other than beneficial owners, who
are subject, or might become subject, to disqualifying events after
filing). These additional costs of monitoring disqualification events
in ongoing offerings are expected to be somewhat mitigated by the
carve-out for events affecting the beneficial owner category of covered
persons, which would remain subject to the existing lookback period
(defined based on the date of filing) under the proposed amendments. In
addition, issuers might incur costs related to seeking disqualification
waivers from the Commission.

Effects on Efficiency, Competition, and Capital Formation
    As discussed above, the proposed amendments might cause some
issuers whose covered persons (other than beneficial owners) become
subject to a disqualification event after filing to discontinue an
offering, resulting in decreased capital formation for such issuers.
Additional costs of monitoring disqualification events might
incrementally increase the compliance costs associated with conducting
an offering under Regulation A or Regulation Crowdfunding. For
Regulation Crowdfunding issuers, intermediaries might incur
incrementally higher due diligence costs as well, insofar as the
monitoring of disqualification triggers is not already a part of the
intermediary's measures to reduce the risk of fraud.
    We expect that the incrementally more stringent bad actor
disqualification provisions in the proposed rules would lead most
issuers to take additional steps to monitor disqualification events
after filing and restrict the participation of covered persons (other
than beneficial owners) in ongoing Regulation A and Regulation
Crowdfunding offerings, which could incrementally help reduce the
potential for fraud in these types of offerings and thus strengthen
investor protection. To the extent that more stringent bad actor
disqualification requirements under the proposed amendments, on the
margin, increase investor interest in these offerings, overall capital
formation in the Regulation A and Regulation Crowdfunding markets may
increase. If the proposed amendments to the disqualification lookback
period alleviate some of the concerns about adverse selection in the
Regulation A and Regulation Crowdfunding markets and thus lower the
risk premium associated with the risk of fraud due to the presence of
bad actors in these markets, they could also reduce the cost of capital
for issuers that rely on these offering exemptions.
Reasonable Alternatives
    As an alternative, instead of disqualifying Regulation A or
Regulation Crowdfunding issuers affected by disqualifying events during
an ongoing offering, we could allow such issuers to continue the
offering but require the disclosure of a disqualifying event and the
option for investors to cancel their investment commitments and obtain
a refund of invested funds. This alternative might reduce costs for
some issuers affected by a disqualification trigger in the course of an
ongoing offering. However, it also might result in costs to investors
if investors fail to review the disclosure of a disqualifying event
occurring after commencement of an offering. This alternative also
would not be consistent with the disqualification provisions in Rule
506(d), which might introduce confusion for issuers and investors that
participate in multiple offerings conducted pursuant to different
securities exemptions.
    The proposed amendments preserve the definition of the lookback
period (using the time of filing as a basis) with respect to
disqualification events affecting covered persons that are beneficial
owners. As an alternative, we could extend the amended lookback period
definition (continuing through the time of sale) with respect to
disqualification events affecting all covered persons, including
beneficial owners. Compared to the proposal, this alternative might
incrementally strengthen investor protection to the extent that the
types of disqualification events that affect beneficial owners after
filing in continuous Regulation A or Regulation Crowdfunding offerings
pose conflicts of interest or other significant risks to investors.
However, compared to the proposal, this alternative might result in the
exclusion of some issuers whose beneficial owners become subject to a
disqualification trigger after filing from eligibility to conduct an
offering. To minimize this risk, issuers might incur increased costs of
monitoring potential disqualification events affecting beneficial
owners under this alternative. Issuers also might incur costs to
restructure their share ownership to avoid beneficial ownership of 20
percent or more of the issuer's outstanding voting equity securities,
calculated on the basis of voting power, by individuals that may become
subject to disqualifying events after filing.
Request for Comment
    122. What would be the costs and benefits of extending the
disqualification lookback to the time of sale in Regulation A and
Regulation Crowdfunding offerings as proposed?
    123. What would be the costs and benefits of the alternative of
extending the disqualification lookback to the time of sale for all
covered persons, including beneficial owners, in Regulation A and
Regulation Crowdfunding offerings?

V. Paperwork Reduction Act

A. Summary of the Collection of Information

    Certain provisions of our rules and forms that would be affected by
the proposed amendments contain ``collection of information''
requirements within the meaning of the Paperwork Reduction Act of 1995
(``PRA'').\430\ The Commission is submitting the proposed amendments to
the Office of Management and Budget (``OMB'') for review in accordance
with the PRA.\431\ The hours and costs associated with preparing and
filing the forms constitute reporting and cost burdens imposed by each
collection of information. An agency may not conduct or sponsor, and a
person is not required to comply with, a collection of information
unless it displays a currently valid OMB control number. Compliance
with the information collections is mandatory. Responses to the
information collections are not kept confidential and there is no
mandatory retention period for the information disclosed. The titles
for the affected collections of information are: \432\
---------------------------------------------------------------------------

    \430\ See 44 U.S.C. 3501 et seq.
    \431\ 44 U.S.C. 3507(d) and 5 CFR 1320.11.
    \432\ As discussed in Section II.D.2 above, we are proposing to
revise the confidential information standard used in our exhibit
filing requirements to provide that information may be redacted if
it is both not material and the type that the registrant treats as
private or confidential. A number of collections of information
could be affected by this proposed amendment, including Form 10-K
(OMB Control No. 3235-0063), Form 10-Q (OMB Control No. 3235-0070),
Form 8-K (OMB Control No. 3235-0060), Form S-1 (OMB Control No.
3235-0065), and Form 10 (OMB Control No. 3235-0064); as well as Form
S-6 (OMB Control No. 3235-0184); Form N-14 (OMB Control No. 3235-
0336); Form 20-F (OMB Control No. 3235-0288); Form F-1 (OMB Control
No. 3235-0258); Form N-1A (OMB Control No. 3235-0307); Form N-2 (OMB
Control No. 3235-0026); Form N-3 (OMB Control No. 3235-0316); Form
N-4 (OMB Control No. 3235-0318); Form N-5 (OMB Control. No. 3235-
0169); Form N-6 (OMB Control No. 3235-0503); and Form N-8B-2 (OMB
Control No. 3235-0186). We preliminarily believe that the proposed
standard would not change the paperwork burden associated with these
collections of information because the revised standard would be
applied in similar circumstances and in a similar way as the current
standard.
---------------------------------------------------------------------------

     ``Regulation A (Form 1-A)'' (OMB Control No. 3235-0286);
     ``Regulation D'' (a proposed new collection of
information);
     ``Regulation D Rule 504(b)(3)--Felons and Other Bad Actors
Disclosure Statement'' (OMB Control No. 3235-0746);
     ``Regulation D Rule 506(e) Felons and Other Bad Actors
Disclosure Statement'' (OMB Control No. 3235-0705);
     ``Form D'' (OMB Control No. 3235-0076); and

     ``Form C'' (OMB Control No. 3235-0307).
    We are proposing to combine the existing collections of information
for Rule 504(b)(3), Rule 506(e), and Form D in a new collection of
information that covers all of the PRA compliance burdens for
Regulation D. The regulations and forms listed above were adopted under
the Securities Act and set forth filing and disclosure requirements
associated with exempt offerings. A description of the proposed
amendments, including the need for the information and its proposed
use, as well as a description of the likely respondents, can be found
in Section II above, and a discussion of the economic effects of the
proposed amendments can be found in Section IV above.

B. Summary of the Effects on the Collections of Information

    PRA Table 1 \433\ summarizes the estimated effects of the proposed
amendments on the paperwork burdens associated with the affected
collections of information listed in Section V.A.
---------------------------------------------------------------------------

    \433\ We do not believe that the proposed amendments with
respect to the use of general solicitation in exempt offerings,
integration of offerings, harmonization of bad actor
disqualification provisions in Regulation A and Regulation
Crowdfunding with those in Regulation D, excluding Exchange Act
registrants that are delinquent filers from relying on Regulation A
or increasing the investment limits under Regulation Crowdfunding
would substantially or materially modify the number of new filings
or the burdens for those filings. We also do not believe that the
proposed limits on the types of securities offered under Regulation
Crowdfunding would substantially or materially modify the number of
Form C filings or the burdens for those filings due to the proposed
amendments to allow for the use of crowdfunding vehicles.

     PRA Table 1--Estimated Paperwork Burden Effects of the Proposed
                               Amendments
------------------------------------------------------------------------
                                        Affected
 Proposed amendments and effects     collections of      Estimated net
                                       information           effect
------------------------------------------------------------------------
Regulation D:
 Provide a new collection               5 hour
 of information to encompass        Regulation D        compliance
 disclosure required by             (including Form     burden per
 Regulation D, including the        D, Rule 502(b),     response to the
 following:                         Rule 504(b)(3),     new collection
                                    and Rule 506(e)).   of information
                                                        *.
    [cir] Financial statement and
     non-financial statement
     information and delivery
     requirements, including the
     proposed requirement to
     provide the purchaser with
     generic solicitation of
     interest materials (Rule
     502(b)); and.
    [cir] Felon and bad actor
     disclosure requirements
     (Rules 504(b)(3)) and 506(e).
Regulation A:
 Requiring the filing of    Form 1-A.   2 hour
 generic solicitation of interest                       net decrease in
 materials. Estimated burden                            compliance
 increase: 0.5 hours per form.                          burden per form.
 Simplifying compliance    ..................   25
 with Regulation A by conforming                        additional
 certain requirements with                              responses.
 similar requirements for
 registered offerings (including
 permitting the redaction of
 confidential information in
 certain exhibits; permitting
 incorporation by reference of
 financial statements in the
 offering circular; and
 simplifying the requirements for
 making non-public documents
 available to the public on
 EDGAR). Estimated burden
 decrease: 2.5 hours per form.
 We estimate that the
 increase in offering limit would
 increase the number of filings
 on Form 1-A by 25.**.
Regulation Crowdfunding:
 Requiring the filing of    Form C...   1 hour
 generic solicitation of interest                       net increase in
 materials and solicitations of                         compliance
 interest under proposed Rule                           burden per form.
 206; and requiring disclosure
 about a co-issuer on Form C when
 an SPV is used. Estimated burden
 increase: 1 hour per form.
 We believe that           ..................   55
 increasing the offering limits                         additional
 under Regulation Crowdfunding                          responses.
 would not affect the burden
 estimate per form, but we
 estimate that the increase in
 the offering limit would
 increase the number of filings
 on Form C by 55.***.
------------------------------------------------------------------------
* We estimate that there is no net effect on the current burden hours
  per response relating to Regulation D as a result of the proposed
  amendments. However, as discussed above, we are proposing to establish
  a single collection of information for Regulation D to encompass all
  of the associated paperwork burdens, including the existing burdens
  associated with Form D, Rule 504(b)(3), and Rule 506(e). As a result,
  the new collection of information for Regulation D would reflect an
  increase from the aggregated burdens for the existing Form D, Rule
  504(b)(3) and Rule 506(e) collections of information. See PRA Table 5
  below.
** There were 125 Regulation A offerings filed in 2019. Although it is
  not possible to predict with any degree of certainty the increase in
  the number of Regulation A offerings following the proposed
  amendments, we estimate for purposes of the PRA an approximate 20
  percent increase in the number of new Regulation A offerings resulting
  in 25 additional respondents. It is possible that the increase in the
  offering limit may also increase the number of Form 1-K, Form 1-SA,
  Form 1-U, and Form 1-Z filings. However, due to uncertainties
  regarding whether any increase in Tier 2 offerings would be conducted
  by Exchange Act reporting companies, we are not proposing an increase
  in the number of responses for the associated collections of
  information at this time.
*** The number of Regulation Crowdfunding offerings has increased to 552
  offerings in the second full year since effectiveness of the rules.
  Although it is not possible to predict with any degree of certainty
  the increase in the number of Regulation Crowdfunding offerings
  following the proposed amendments, we estimate for purposes of the PRA
  an approximate 10 percent increase in the number of new Regulation
  Crowdfunding offerings resulting in 55 additional respondents.

C. Incremental and Aggregate Burden and Cost Estimates

    Below we estimate the incremental and aggregate changes in
paperwork burden as a result of the proposed amendments. These
estimates represent the average burden for all issuers, both large and
small. In deriving our estimates, we recognize that the burdens will
likely vary among individual issuers based on a number of factors,
including the nature of their business. We believe that the proposed
amendments would change the frequency of responses to the existing

collections of information and the burden per response.
    The burden estimates were calculated by adding the estimated
additional responses to the existing estimated responses and
multiplying the estimated number of responses by the estimated average
amount of time it would take an issuer to prepare and review disclosure
required under the proposed amendments. For purposes of the PRA, the
burden is to be allocated between internal burden hours and outside
professional costs. PRA Table 2 \434\ sets forth the percentage
estimates we typically use for the burden allocation for each
collection of information and the estimated burden allocation for the
proposed new collection of information for Regulation D. We also
estimate that the average cost of retaining outside professionals is
$400 per hour.\435\
---------------------------------------------------------------------------

    \434\ Here and in the tables below, we derived current estimated
burdens and burden allocations for Regulation D using the estimates
for Form D, Rule 504(b)(3), and Rule 506(e).
    \435\ We recognize that the costs of retaining outside
professionals may vary depending on the nature of the professional
services, but for purposes of this PRA analysis, we estimate that
such costs would be an average of $400 per hour. This estimate is
based on consultations with several registrants, law firms, and
other persons who regularly assist registrants in preparing and
filing reports with the Commission.

  PRA Table 2--Estimated Burden Allocation for Specified Collections of
                               Information
------------------------------------------------------------------------
                                                              Outside
        Collection of information          Internal (%)    professionals
                                                                (%)
------------------------------------------------------------------------
Forms 1-A, C............................              75              25
Regulation D............................              25              75
------------------------------------------------------------------------

    PRA Table 3 \436\ below illustrates the incremental change to the
total annual compliance burden of affected forms, in hours and in
costs, as a result of the proposed amendments' estimated effect on the
paperwork burden per response.
---------------------------------------------------------------------------

    \436\ The estimated reductions in Columns (C), (D) and (E) are
rounded to the nearest whole number.

           PRA Table 3--Calculation of the Incremental Change in Burden Estimates of Current Responses Resulting From the Proposed Amendments
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Burden hour      Change in                           Change in          Change in
                                                    Number of      affect per     burden hours   Change in company     professional       professional
           Collection of information                estimated        current       for current   hours for current  hours for current  costs for current
                                                    affected        affected        affected          affected           affected           affected
                                                    responses       response        responses        responses          responses          responses
                                                        (A) \a\             (B)     (C) = (A) x   (D) = (C) x 0.75   (E) = (C) x 0.25   (F) = (E) x $400
                                                                                (B)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Form 1-A.......................................             204             (2)           (408)              (306)              (102)          ($40,800)
Form C.........................................           5,907               1            5907              4,430              1,477            590,800
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ The number of estimated affected responses is based on the number of responses in the Commission's current OMB PRA filing inventory plus the number
  of additional responses we estimate as a result of the proposed amendments (30 responses for Form 1-A, and 55 responses for Form C). The OMB PRA
  filing inventory represents a three-year average.

    The table below illustrates the incremental change to the total
annual compliance burden of affected forms, in hours and in costs, as a
result of the proposed amendments' estimated effect on the number of
responses.

     PRA Table 4--Calculation of the Change in Burden Estimates as a Result of Change in Number of Responses Resulting From the Proposed Amendments
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                              Current burden                                        Program change
                                             -----------------------------------------------------------------------------------------------------------
          Collection of information                                                              Estimated
                                              Current annual      Current      Current cost     additional      Change in company         Change in
                                                 responses     burden hours       burden         responses            hours          professional  costs
                                                         (A)             (B)             (C)             (D)     (E) = ((B)/(A)) x     (F) = ((C)/(A)) x
                                                                                (D)                   (D)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Form 1-A....................................             179          98,396     $13,111,912              25                13,742            $1,932,390
Form C......................................           5,852         214,928      28,500,000              55                 2,020               267,857
--------------------------------------------------------------------------------------------------------------------------------------------------------

    The following tables summarize the requested paperwork burden,
including the estimated total reporting burdens and costs, under the
proposed amendments. Column (D) of PRA Table 5 includes additional
responses estimated as a result of the proposed amendments.

                                                              PRA Table 5--Requested Paperwork Burden Under the Proposed Amendments
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Current burden                               Program change                        Requested change in burden
                                                          --------------------------------------------------------------------------------------------------------------------------------------
                Collection of  information                                                                  Number of    Change in      Change in
                                                           Current annual      Current      Current cost     affected     company     Professional      Annual     Burden hours     Cost burden
                                                              responses     burden  hours      burden       responses      hours          Costs       responses
                                                                      (A)             (B)             (C)          (D)     (E) \aa\        (F) \bb\          (G)     (H) = (B) +     (I) = (C) +
                                                                                (E)             (F)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Form 1-A.................................................             179          98,396     $13,111,912          204       13,436      $1,891,590          204         111,832     $15,003,502
Form C...................................................           5,852         214,928      28,500,000        5,907        6,450         858,657        5,907         221,378      29,358,657
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\aa\ From Column (D) in PRA Table 3 and Column (E) in PRA Table 4.
\bb\ From Column (F) in PRA Table 3.

    PRA Table 6 summarizes the requested paperwork burden for the new
Regulation D collection of information, including the estimated total
reporting burdens and costs, under the proposed amendments. The
estimates for this proposed new collection of information include the
existing burden estimated for Form D, Rule 504(b)(3), and Rule 506(e),
as well as other burdens resulting from the implementation of
Regulation D. For purposes of the PRA, we estimate that new Regulation
D will entail a 5 hour compliance burden per response with 26,000
annual responses (derived from the current 26,000 annual responses for
Form D.\437\
---------------------------------------------------------------------------

    \437\ We expect the amendments providing an additional method to
verify an investor's accredited investor status and increasing the
offering limit under Rule 504 could lead to additional Rule 506(c)
or Rule 504 offerings. However, as discussed in Section IV above,
some of these offerings may be conducted by issuers switching from
other Regulation D exemptions. Additionally, some of the issuers
conducting the additional Regulation A or Regulation Crowdfunding
offerings may be switching from Regulation D offerings. Because it
is difficult to predict the net impact of the proposed amendments on
the overall number of Regulation D responses, we are not adjusting
the current estimate of 26,000 responses at this time.

                  PRA Table 6--Requested Paperwork Burden for the New Collection of Information
----------------------------------------------------------------------------------------------------------------
                                                                      Requested paperwork burden
                                                    ------------------------------------------------------------
             Collection of information                   Annual
                                                        responses       Burden hours           Cost burden
                                                                (A)   (A) x 5 x (0.25)   (A) x 5 x (0.75) x $400
----------------------------------------------------------------------------------------------------------------
Regulation D.......................................          26,000             32,500               $39,000,000
----------------------------------------------------------------------------------------------------------------

Request for Comment
    Pursuant to 44 U.S.C. 3506(c)(2)(B), we request comment in order
to:
     Evaluate whether the proposed collections of information
are necessary for the proper performance of the functions of the
Commission, including whether the information will have practical
utility;
     Evaluate the accuracy of our assumptions and estimates of
the burden of the proposed collection of information;
     Determine whether there are ways to enhance the quality,
utility, and clarity of the information to be collected;
     Evaluate whether there are ways to minimize the burden of
the collection of information on those who respond, including through
the use of automated collection techniques or other forms of
information technology; and
     Evaluate whether the proposed amendments would have any
effects on any other collection of information not previously
identified in this section.
    Any member of the public may direct to us any comments concerning
the accuracy of these burden estimates and any suggestions for reducing
these burdens. Persons submitting comments on the collection of
information requirements should direct their comments to the Office of
Management and Budget, Attention: Desk Officer for the U.S. Securities
and Exchange Commission, Office of Information and Regulatory Affairs,
Washington, DC 20503, and send a copy to Vanessa A. Countryman,
Secretary, U.S. Securities and Exchange Commission, 100 F Street NE,
Washington, DC 20549, with reference to File No. S7-05-20. Requests for
materials submitted to OMB by the Commission with regard to the
collection of information requirements should be in writing, refer to
File No. S7-05-20 and be submitted to the U.S. Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE, Washington DC
20549. OMB is required to make a decision concerning the collection of
information requirements between 30 and 60 days after publication of
the proposed amendments. Consequently, a comment to OMB is best assured
of having its full effect if the OMB receives it within 30 days of
publication.

VI. Small Business Regulatory Enforcement Fairness Act

    For purposes of the Small Business Regulatory Enforcement Fairness
Act of 1996 (SBREFA),\438\ the Commission must advise OMB as to whether
the proposed amendments constitute a ``major'' rule. Under SBREFA, a
rule is considered ``major'' where, if adopted, it results or is likely
to result in:
---------------------------------------------------------------------------

    \438\ 5 U.S.C. 801 et seq.
---------------------------------------------------------------------------

     An annual effect on the U.S. economy of $100 million or
more (either in the form of an increase or a decrease);
     A major increase in costs or prices for consumers or
individual industries; or
     Significant adverse effects on competition, investment, or
innovation.
Request for Comment
    We request comment on whether the proposed amendments would be a
``major rule'' for purposes of SBREFA. In particular, we request
comment on the potential effect of the proposed amendments on the U.S.
economy on an annual basis; any potential increase in costs or prices
for consumers or individual industries; and any potential effect on
competition, investment or innovation. Commenters are requested

to provide empirical data and other factual support for their views to
the extent possible.

VII. Initial Regulatory Flexibility Analysis

    When an agency issues a rulemaking proposal, the Regulatory
Flexibility Act (``RFA'') \439\ requires the agency to prepare and make
available for public comment an Initial Regulatory Flexibility Analysis
(``IRFA'') that will describe the impact of the proposed rule on small
entities.\440\ This IRFA relates to proposed amendments or additions to
the rules and forms described in Section II above.
---------------------------------------------------------------------------

    \439\ 5 U.S.C. 601 et seq.
    \440\ 5 U.S.C. 603(a).
---------------------------------------------------------------------------

A. Reasons for, and Objectives of, the Proposed Action

    The proposed amendments are intended simplify, harmonize, and
improve certain aspects of the exempt offering framework to promote
capital formation while maintaining or enhancing important investor
protections. The proposed amendments also seek to address gaps and
complexities in the exempt offering framework that may impede access to
investment opportunities for investors and capital for issuers. The
reasons for, and objectives of, the proposed amendments are discussed
in more detail in Section II above.

B. Legal Basis

    The amendments contained in this release are being proposed under
the authority set forth in the Securities Act, particularly, Sections
3, 4, 4A, 19 and 28 thereof; the Exchange Act, particularly, Sections
3, 10(b), 12, 15, 17, 23(a) and 36 thereof; and the Investment Company
Act, particularly Sections 6(c), 8, 24, 30, 38, and 45; and Public Law
112-106, secs. 301-305, 126 Stat. 306 (2012).

C. Small Entities Subject to the Proposed Rules

    The proposed amendments would affect issuers that are small
entities. The RFA defines ``small entity'' to mean ``small business,''
``small organization,'' or ``small governmental jurisdiction.''
\441\[thinsp]For purposes of the RFA, under 17 CFR 230.157, an issuer,
other than an investment company, is a ``small business'' or ``small
organization'' if it had total assets of $5 million or less on the last
day of its most recent fiscal year and is engaged or proposing to
engage in an offering of securities not exceeding $5 million. Under 17
CFR 270.0-10, an investment company, including a business development
company, is considered to be a small entity if it, together with other
investment companies in the same group of related investment companies,
has net assets of $50 million or less as of the end of its most recent
fiscal year.
---------------------------------------------------------------------------

    \441\ [thinsp]5 U.S.C. 601(6).
---------------------------------------------------------------------------

    The proposed amendments are expected to promote capital formation
through exempt offerings and create additional flexibility for issuers.
Because the proposed amendments would affect all issuers conducting
offerings exempt from registration under the Securities Act, which
includes companies not subject to ongoing reporting obligations under
the Exchange Act, Regulation A, or Regulation Crowdfunding, it is
difficult to estimate the number of issuers that qualify as small
entities that would be eligible to rely on the proposed
amendments.\442\
---------------------------------------------------------------------------

    \442\ In particular, as discussed in Section IV above, due to
the large number of offerings in reliance on the offering exemptions
in Regulation D relative to other offering exemptions affected by
the proposed amendments, most of which are conducted by issuers that
are not subject to Exchange Act, Regulation A, or Regulation
Crowdfunding reporting requirements, Regulation D issuers are likely
to continue to comprise a significant share of the small entities
affected by the proposed amendments. However, we do not have
information on the assets of such issuers, which is required for an
estimate of small entities for purposes of the RFA definition,
because this information is not required by Form D and because such
issuers may not be subject to ongoing reporting requirements.
---------------------------------------------------------------------------

D. Projected Reporting, Recordkeeping and Other Compliance Requirements

    If adopted, the proposed amendments would apply to small entities
to the same extent as other entities, irrespective of size. Therefore,
we expect that the nature of any benefits and costs associated with the
proposed amendments to be similar for large and small entities.
Accordingly, we refer to the discussion of the proposed amendments'
economic effects on all affected parties, including small entities, in
Section IV above.\443\ Consistent with that discussion, we anticipate
that the economic benefits and costs likely could vary widely among
small entities based on a number of factors, such as the nature and
conduct of their businesses, including their capital raising decisions,
which makes it difficult to project the economic impact on small
entities with precision. Compliance with the proposed amendments may
require the use of professional skills, including accounting and legal
skills.
---------------------------------------------------------------------------

    \443\ We also discuss the estimated compliance burden associated
with the proposed amendments for purposes of the PRA in Section V
above.
---------------------------------------------------------------------------

    Many of the proposed amendments are expected to be of greatest
benefit to the capital raising efforts of small entities that may lack
an existing network of angel and VC funders and appear to face the
greatest constraints in obtaining external financing. Examples of this
include: Amendments to integration principles that are intended to
facilitate multiple offerings, including offerings with general
solicitation; amendments expanding investment limits and issuer
eligibility under Regulation Crowdfunding; amendments tailoring the
requirements for non-accredited investor sales under Rule 506(b); and
amendments expanding the offering limits for Regulation Crowdfunding,
Rule 504, and Regulation A. In addition, certain of the rules that we
propose to amend, such as Regulation Crowdfunding and Rule 504, have
eligibility requirements and other restrictions that increase the
likelihood that such rules would be relied upon by small businesses
that are seeking to raise relatively small amounts of capital without
incurring the costs of conducting a registered offering.
    Although many of the proposed amendments are expected to be of
greatest benefit to the capital raising efforts of small entities, we
acknowledge that any costs of the proposed amendments borne by the
affected entities, such as those related to compliance with the
proposed amendments, or the implementation or restructuring of internal
systems needed to adjust to the proposed amendments, could have a
proportionally greater effect on small entities, as they may be less
able to bear such costs relative to larger entities. For example, the
proposed amendments to the bad actor disqualification provisions \444\
could cause some small entities to incur additional due diligence costs
or modify their offerings to reduce the possibility of a disqualifying
event (e.g., replacing personnel or avoiding the participation of
covered persons, other than beneficial owners, who are subject, or
might become subject, to disqualifying events after filing). Similarly,
small entities electing to use the proposed generic or Regulation
Crowdfunding testing-the-waters provisions \445\ might incur costs,
such as those related to preparing the testing-the-waters materials.
These potential costs would be borne equally by all issuers, regardless
of size.
---------------------------------------------------------------------------

    \444\ See supra Section II.G.
    \445\ See supra Section II.B.

---------------------------------------------------------------------------

E. Duplicative, Overlapping, or Conflicting Federal Rules

    We do not believe the proposed amendments would duplicate, overlap,
or conflict with other federal rules.

F. Significant Alternatives

    The RFA directs us to consider alternatives that would accomplish
our stated objectives, while minimizing any significant adverse impact
on small entities. In connection with the proposed amendments, we
considered the following alternatives:
     Establishing different compliance or reporting
requirements that take into account the resources available to small
entities;
     Clarifying, consolidating, or simplifying compliance and
reporting requirements under the rules for small entities;
     Using performance rather than design standards; and
     Exempting small entities from all or part of the
requirements.
    The proposed amendments generally would simplify, harmonize, and
improve certain aspects of the exempt offering framework to promote
capital formation, including for offering exemptions used by and
designed primarily for small entities. Thus, we do not think it is
necessary to exempt small entities from all or part of these
requirements.
    Several of the offering exemptions that we have proposed to amend
(e.g., Regulation A and Regulation Crowdfunding) already contain
different compliance or reporting requirements that take into account
the resources of the smaller entities that are likely to utilize these
exemptions. In addition, certain of our proposals clarify, consolidate,
or simplify compliance and reporting requirements under our rules,
which should benefit small entities in particular. For example, we are
proposing amendments to the financial statement information
requirements in Regulation D to align them with the disclosure
requirements in Regulation A. We are also proposing several amendments
to simplify compliance with Regulation A, such as the redaction of
confidential information in certain exhibits, harmonizing the
procedures for publicly filing draft Regulation A offering statements
with those for draft Securities Act registration statements, and
permitting issuers to incorporate previously-filed financial statements
by reference into a Regulation A offering statement. Finally, we are
proposing revisions to Regulation Crowdfunding and rules under the
Investment Company Act intended to help reduce administrative
complexities that some issuers may encounter under Regulation
Crowdfunding.
    With respect to using performance rather than design standards, we
note that several of the proposed amendments concern rules that use
principles-based approaches that are more akin to performance
standards. For example, we are proposing a general principle of
integration that would require an issuer to consider the particular
facts and circumstances of each offering, including whether the issuer
can establish that each offering either complies with the registration
requirements of the Securities Act, or that an exemption from
registration is available for the particular offering.

G. Request for Comment

    We encourage the submission of comments with respect to any aspect
of this IRFA. In particular, we request comments regarding:
     The number of small entities that may be affected by the
proposed amendments;
     The existence or nature of the potential impact of the
proposed amendments on small entities discussed in the analysis;
     How the proposed amendments could further lower the burden
on small entities; and
     How to quantify the impact of the proposed amendments.
    Commenters are asked to describe the nature of any impact and
provide empirical data supporting the extent of the impact. Comments
will be considered in the preparation of the Final Regulatory
Flexibility Analysis, if the proposed amendments are adopted, and will
be placed in the same public file as comments on the proposed
amendments themselves.

Statutory Authority and Text of Proposed Rule Amendments

    The amendments contained in this release are being proposed under
the authority set forth in the Securities Act (15 U.S.C. 77a et seq.),
particularly, Sections 3, 4, 4A, 19 and 28 thereof; the Exchange Act
(15 U.S.C. 78a et seq.), particularly, Sections 3, 10(b), 12, 15, 17,
23(a) and 36 thereof; the Investment Company Act (15 U.S.C. 80a-1 et
seq.), particularly Sections 6(c), 8, 24, 30, 38, and 45; and Pub. L.
112-106, secs. 301-305, 126 Stat. 306 (2012).

List of Subjects

17 CFR Part 227

    Crowdfunding, Reporting and recordkeeping requirements, Securities.

17 CFR Part 229

    Administrative practice and procedure, Reporting and recordkeeping
requirements, Securities.

17 CFR Part 230

    Administrative practice and procedure, Advertising, Confidential
business information, Investment companies, Reporting and recordkeeping
requirements, Securities.

17 CFR Part 239

    Administrative practice and procedure, Reporting and recordkeeping
requirements, Securities.

17 CFR Part 249

    Administrative practice and procedure, Brokers, Reporting and
recordkeeping requirements, Securities.

17 CFR Part 270

    Administrative practice and procedure, Confidential business
information, Fraud, Investment companies, Life insurance, Reporting and
recordkeeping requirements, Securities.

17 CFR Part 274

    Administrative practice and procedure, Electronic funds transfer,
Investment companies, Reporting and recordkeeping requirements,
Securities.

    For the reasons set out above, the Commission proposes to amend
title 17, chapter II of the Code of Federal Regulations, as follows:

PART 227--REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS

0
1. The authority citation for part 227 continues to read as follows:

    Authority:  15 U.S.C. 77d, 77d-1, 77s, 77z-3, 78c, 78o, 78q,
78w, 78mm, and Pub. L. 112-106, secs. 301-305, 126 Stat. 306 (2012).

0
2. Amend Sec.  227.100 by:
0
a. Revising paragraphs (a)(1) and (2); and
0
b. Adding paragraphs (b)(7) and (e).
    The revisions and additions read as follows:

Sec.  227.100  Crowdfunding exemption and requirements.

    (a) * * *
    (1) The aggregate amount of securities sold to all investors by the
issuer in reliance on section 4(a)(6) of the Securities Act (15 U.S.C.
77d(a)(6)) during the 12-month period preceding the date of such offer
or sale, including the securities offered in such transaction, shall
not exceed $5,000,000;
    (2) Where the purchaser is not an accredited investor (as defined
in Rule

501 (Sec.  230.501 of this chapter)), the aggregate amount of
securities sold to such an investor across all issuers in reliance on
section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) during the
12-month period preceding the date of such transaction, including the
securities sold to such investor in such transaction, shall not exceed:
    (i) The greater of $2,200, or 5 percent of the greater of the
investor's annual income or net worth, if either the investor's annual
income or net worth is less than $107,000; or
    (ii) 10 percent of the greater of the investor's annual income or
net worth, not to exceed an amount sold of $107,000, if both the
investor's annual income and net worth are equal to or more than
$107,000;
* * * * *
    (b) Applicability. * * *
    (7) Are not equity securities, debt securities, and securities
convertible or exchangeable to equity interests, including any
guarantees of such securities.
* * * * *
    (e) Integration with other offerings. To determine whether offers
and sales should be integrated, please see Rule 152 (Sec.  230.152 of
this chapter).
0
3. Amend Sec.  227.201 by:
0
a. Revising the introductory text;
0
b. Removing the word ``and'' at the end of paragraph (x);
0
c. Removing the period at the end of paragraph (y) and adding in its
place ``; and''; and
0
d. Adding paragraph (z).
    The revisions and addition read as follows:

Sec.  227.201  Disclosure requirements.

    An issuer offering or selling securities in reliance on section
4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) and in accordance
with section 4A of the Securities Act (15 U.S.C. 77d-1) and this part,
and any co-issuer jointly offering or selling securities with such an
issuer in reliance on the same, must file with the Commission and
provide to investors and the relevant intermediary the following
information:
* * * * *
    (z) Any written communication or broadcast script provided in
accordance with Sec.  227.206 or, if within 30 days of the initial
filing of the offering statement, Sec.  230.241 of this chapter.
* * * * *
0
4. Amend Sec.  227.204 by revising paragraphs (a) and (b)(1) to read as
follows:

Sec.  227.204  Advertising.

    (a) An issuer may not, directly or indirectly, advertise the terms
of an offering made in reliance on section 4(a)(6) of the Securities
Act (15 U.S.C. 77d(a)(6)), except for oral or written communications
that meet the requirements of paragraph (b) of this section or Sec.
227.206.
* * * * *
    (b) * * *
    (1) A statement that the issuer is conducting an offering pursuant
to section 4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)), the
name of the intermediary through which the offering is being conducted,
and information (including a link in any written communications)
directing the potential investor to the intermediary's platform;
* * * * *
0
5. Add Sec.  227.206 to read as follows:

Sec.  227.206  Solicitations of interest and other communications.

    (a) Solicitation of interest. At any time before the filing of an
offering statement, an issuer may communicate orally or in writing to
determine whether there is any interest in a contemplated securities
offering. Such communications are deemed to be an offer of a security
for sale for purposes of the antifraud provisions of the federal
securities laws. No solicitation or acceptance of money or other
consideration, nor of any commitment, binding or otherwise, from any
person is permitted until the offering statement is filed.
    (b) Conditions. The communications must:
    (1) State that no money or other consideration is being solicited,
and if sent in response, will not be accepted;
    (2) State that no offer to buy the securities can be accepted and
no part of the purchase price can be received until the offering
statement is filed; and
    (3) State that a person's indication of interest involves no
obligation or commitment of any kind.
    (c) Indications of interest. Any written communication under this
rule may include a means by which a person may indicate to the issuer
that such person is interested in a potential offering. This issuer may
require the name, address, telephone number, and/or email address in
any response form included pursuant to this paragraph (c).
0
6. Amend Sec.  227.503 by revising paragraphs (a) and (b)(3) to read as
follows:

Sec.  227.503  Disqualification provisions.

    (a) Disqualification events. No exemption under this section
4(a)(6) of the Securities Act (15 U.S.C. 77d(a)(6)) shall be available
for a sale of securities if the issuer; any predecessor of the issuer;
any affiliated issuer; any director, officer, general partner or
managing member of the issuer; any beneficial owner of 20 percent or
more of the issuer's outstanding voting equity securities, calculated
on the basis of voting power; any promoter connected with the issuer in
any capacity at the time of filing, any offer after filing, or such
sale; any person that has been or will be paid (directly or indirectly)
remuneration for solicitation of purchasers in connection with such
sale of securities; or any general partner, director, officer or
managing member of any such solicitor:
    (1) Has been convicted, within 10 years before the filing of the
offering statement or such sale (or five years, in the case of issuers,
their predecessors and affiliated issuers), of any felony or
misdemeanor:
    (i) In connection with the purchase or sale of any security;
    (ii) Involving the making of any false filing with the Commission;
or
    (iii) Arising out of the conduct of the business of an underwriter,
broker, dealer, municipal securities dealer, investment adviser,
funding portal or paid solicitor of purchasers of securities;
    (2) Is subject to any order, judgment or decree of any court of
competent jurisdiction, entered within five years before the filing of
the information required by section 4A(b) of the Securities Act (15
U.S.C. 77d-1(b)) or such sale that, at the time of such filing or sale,
restrains or enjoins such person from engaging or continuing to engage
in any conduct or practice:
    (i) In connection with the purchase or sale of any security;
    (ii) Involving the making of any false filing with the Commission;
or
    (iii) Arising out of the conduct of the business of an underwriter,
broker, dealer, municipal securities dealer, investment adviser,
funding portal or paid solicitor of purchasers of securities;
    (3) Is subject to a final order of a state securities commission
(or an agency or officer of a state performing like functions); a state
authority that supervises or examines banks, savings associations or
credit unions; a state insurance commission (or an agency or officer of
a state performing like functions); an appropriate federal banking
agency; the U.S. Commodity Futures Trading Commission; or the National
Credit Union Administration that:
    (i) At the time of the filing of the information required by
section 4A(b) of the Securities Act (15 U.S.C. 77d-1(b)) or such sale,
bars the person from:
    (A) Association with an entity regulated by such commission,
authority, agency or officer;

    (B) Engaging in the business of securities, insurance or banking;
or
    (C) Engaging in savings association or credit union activities; or
    (ii) Constitutes a final order based on a violation of any law or
regulation that prohibits fraudulent, manipulative or deceptive conduct
entered within ten years before such filing of the offering statement
or such sale;
    Instruction to paragraph (a)(3). Final order shall mean a written
directive or declaratory statement issued by a federal or state agency,
described in Sec.  227.503(a)(3), under applicable statutory authority
that provides for notice and an opportunity for hearing, which
constitutes a final disposition or action by that federal or state
agency.
    (4) Is subject to an order of the Commission entered pursuant to
section 15(b) or 15B(c) of the Exchange Act (15 U.S.C. 78o(b) or 78o-
4(c)) or Section 203(e) or (f) of the Investment Advisers Act of 1940
(15 U.S.C. 80b-3(e) or (f)) that, at the time of the filing of the
information required by section 4A(b) of the Securities Act (15 U.S.C.
77d-1(b)) or such sale:
    (i) Suspends or revokes such person's registration as a broker,
dealer, municipal securities dealer, investment adviser or funding
portal;
    (ii) Places limitations on the activities, functions or operations
of such person; or
    (iii) Bars such person from being associated with any entity or
from participating in the offering of any penny stock;
    (5) Is subject to any order of the Commission entered within five
years before the filing of the information required by section 4A(b) of
the Securities Act (15 U.S.C. 77d-1(b)) or such sale that, at the time
of such filing or sale, orders the person to cease and desist from
committing or causing a violation or future violation of:
    (i) Any scienter-based anti-fraud provision of the federal
securities laws, including without limitation Section 17(a)(1) of the
Securities Act (15 U.S.C. 77q(a)(1)), Section 10(b) of the Exchange Act
(15 U.S.C. 78j(b)) and 17 CFR 240.10b-5, section 15(c)(1) of the
Exchange Act (15 U.S.C. 78o(c)(1)) and Section 206(1) of the Investment
Advisers Act of 1940 (15 U.S.C. 80b-6(1)) or any other rule or
regulation thereunder; or
    (ii) Section 5 of the Securities Act (15 U.S.C. 77e);
    (6) Is suspended or expelled from membership in, or suspended or
barred from association with a member of, a registered national
securities exchange or a registered national or affiliated securities
association for any act or omission to act constituting conduct
inconsistent with just and equitable principles of trade;
    (7) Has filed (as a registrant or issuer), or was or was named as
an underwriter in, any registration statement or Regulation A (17 CFR
230.251 through 230.263 of this chapter) offering statement filed with
the Commission that, within five years before the filing of the
information required by section 4A(b) of the Securities Act (15 U.S.C.
77d-1(b)) or such sale, was the subject of a refusal order, stop order,
or order suspending the Regulation A exemption, or is, at the time of
such filing or sale, the subject of an investigation or proceeding to
determine whether a stop order or suspension order should be issued; or
    (8) Is subject to a United States Postal Service false
representation order entered within five years before the filing of the
information required by section 4A(b) of the Securities Act (15 U.S.C.
77d-1(b)) or such sale, or is, at the time of such filing or sale,
subject to a temporary restraining order or preliminary injunction with
respect to conduct alleged by the United States Postal Service to
constitute a scheme or device for obtaining money or property through
the mail by means of false representations.
    Instruction to paragraph (a): With respect to any beneficial owner
of 20 percent or more of the issuer's outstanding voting equity
securities, calculated on the basis of voting power, the issuer is
required to determine whether a disqualifying event has occurred only
as of the time of filing of the offering statement and not from the
time of such sale.
    (b) * * *
    (3) If, before the filing of the information required by section
4A(b) of the Securities Act (15 U.S.C. 77d-1(b)) or such sale, the
court or regulatory authority that entered the relevant order, judgment
or decree advises in writing (whether contained in the relevant
judgment, order or decree or separately to the Commission or its staff)
that disqualification under paragraph (a) of this section should not
arise as a consequence of such order, judgment or decree; or
* * * * *

PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES
ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND
CONSERVATION ACT OF 1975--REGULATION S-K

0
7. The authority citation for part 229 continues to read as follows:

    Authority:  15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2,
77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj,
77nnn, 77sss, 78c, 78i, 78j, 78j-3, 78l, 78m, 78n, 78n-1, 78o, 78u-
5, 78w, 78ll, 78mm, 80a-8, 80a-9, 80a-20, 80a-29, 80a-30, 80a-31(c),
80a-37, 80a-38(a), 80a-39, 80b-11 and 7201 et seq.; 18 U.S.C. 1350;
sec. 953(b), Pub. L. 111-203, 124 Stat. 1904 (2010); and sec.
102(c), Pub. L. 112-106, 126 Stat. 310 (2012).
* * * * *
0
8. Amend Sec.  229.601 by revising paragraphs (b)(2)(ii) and
(b)(10)(iv) to read as follows:

Sec.  229.601  (Item 601) Exhibits.

* * * * *
    (b) * * *
    (2) * * *
    (ii) The registrant may redact specific provisions or terms of
exhibits required to be filed by paragraph (b)(2) of this Item if the
registrant customarily and actually treats that information as private
or confidential and if the omitted information is not material. If it
does so, the registrant should mark the exhibit index to indicate that
portions of the exhibit or exhibits have been omitted and include a
prominent statement on the first page of the redacted exhibit that
certain identified information has been excluded from the exhibit
because it is both not material and is the type that the registrant
treats as private or confidential. The registrant also must include
brackets indicating where the information is omitted from the filed
version of the exhibit. If requested by the Commission or its staff,
the registrant must promptly provide on a supplemental basis an
unredacted copy of the exhibit and its materiality and privacy or
confidentiality analyses. Upon evaluation of the registrant's
supplemental materials, the Commission or its staff may require the
registrant to amend its filing to include in the exhibit any previously
redacted information that is not adequately supported by the
registrant's analyses. The registrant may request confidential
treatment of the supplemental material submitted under this paragraph
(b)(2)(ii) pursuant to Rule 83 (Sec.  200.83 of this chapter) while it
is in the possession of the Commission or its staff. After completing
its review of the supplemental information, the

Commission or its staff will return or destroy it if the registrant
complies with the procedures outlined in Rules 418 or 12b-4 (Sec.
230.418 or 240.12b-4 of this chapter).
* * * * *
    (10) * * *
    (iv) The registrant may redact specific provisions or terms of
exhibits required to be filed by this paragraph (b)(10) if the
registrant customarily and actually treats that information as private
or confidential and if the omitted information is not material. If it
does so, the registrant should mark the exhibit index to indicate that
portions of the exhibit or exhibits have been omitted and include a
prominent statement on the first page of the redacted exhibit that
certain identified information has been excluded from the exhibit
because it is both not material and is the type that the registrant
treats as private or confidential. The registrant also must include
brackets indicating where the information is omitted from the filed
version of the exhibit. If requested by the Commission or its staff,
the registrant must promptly provide on a supplemental basis an
unredacted copy of the exhibit and its materiality and privacy or
confidentiality analyses. Upon evaluation of the registrant's
supplemental materials, the Commission or its staff may require the
registrant to amend its filing to include in the exhibit any previously
redacted information that is not adequately supported by the
registrant's analyses. The registrant may request confidential
treatment of the supplemental material submitted under this paragraph
(b)(10)(iv) pursuant to Rule 83 (Sec.  200.83 of this chapter) while it
is in the possession of the Commission or its staff. After completing
its review of the supplemental information, the Commission or its staff
will return or destroy it if the registrant complies with the
procedures outlined in Rules 418 or 12b-4 (Sec.  230.418 or 240.12b-4
of this chapter).
* * * * *

PART 230--GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933

0
9. The authority citation for part 230 continues to read, in part, as
follows:

    Authority:  15 U.S.C. 77b, 77b note, 77c, 77d, 77f, 77g, 77h,
77j, 77r, 77s, 77z-3, 77sss, 78c, 78d, 78j, 78l, 78m, 78n, 78o, 78o-
7 note, 78t, 78w, 78ll(d), 78mm, 80a-8, 80a-24, 80a-28, 80a-29, 80a-
30, and 80a-37, and Pub. L. 112-106, secs. 201(a), 401, 126 Stat.
313 (2012), unless otherwise noted.
* * * * *
    Section 230.502 is also issued under 15 U.S.C. 80a-8, 80a-29,
80a-30.
* * * * *
0
10. Amend Sec.  230.147 by revising paragraph (g) and removing
paragraph (h) to read as follows:

Sec.  230.147  Intrastate offers and sales.

* * * * *
    (g) Integration with other offerings. To determine whether offers
and sales should be integrated, please see Rule 152 (Sec.  230.152).
0
11. Amend Sec.  230.147A by revising paragraph (g) and removing
paragraph (h) to read as follows:

Sec.  230.147A  Intrastate sale exemption.

* * * * *
    (g) Integration with other offerings. To determine whether offers
and sales should be integrated, please see Rule 152 (Sec.  230.152).
0
12. Add Sec.  230.148 to read as follows:

Sec.  230.148  Exemption from general solicitation or general
advertising.

    A communication will not be deemed to constitute general
solicitation or general advertising if made in connection with a
seminar or meeting by a college, university, or other institution of
higher education, local government, nonprofit organization, or angel
investor group, incubator, or accelerator sponsoring the seminar or
meeting, provided that:
    (a) No advertising for the seminar or meeting references a specific
offering of securities by the issuer;
    (b) The sponsor of the seminar or meeting does not:
    (1) Make investment recommendations or provide investment advice to
attendees of the event;
    (2) Engage in any investment negotiations between the issuer and
investors attending the event;
    (3) Charge attendees of the event any fees, other than reasonable
administrative fees;
    (4) Receive any compensation for making introductions between event
attendees and issuers or for investment negotiations between such
parties; and
    (5) Receive any compensation with respect to the event that would
require registration of the sponsor as a broker or a dealer under the
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.) or an
investment adviser under the Investment Advisers Act of 1940 (15 U.S.C.
80b-1 et seq.); and
    (c) The type of information regarding an offering of securities by
the issuer that is communicated or distributed by or on behalf of the
issuer in connection with the event is limited to a notification that
the issuer is in the process of offering or planning to offer
securities, the type and amount of securities being offered, and the
intended use of proceeds of the offering.
    Instruction to Sec.  230.148: For purposes of this subsection, the
term ``angel investor group'' means a group of accredited investors
that holds regular meetings and has written processes and procedures
for making investment decisions, either individually or among the
membership of the group as a whole, and is neither associated nor
affiliated with brokers, dealers, or investment advisers.
0
13. Revise Sec.  230.152 to read as follows:

Sec.  230.152  Integration.

    This section provides a general principle of integration and non-
exclusive safe harbors from integration of registered and exempt
offerings. Because of the objectives of this rule and the policies
underlying the Act, these safe harbors are not available to any issuer
for any transaction or series of transactions that, although in
technical compliance with the rule, is part of a plan or scheme to
evade the registration requirements of the Act.
    (a) General principle of integration. If the safe harbors in
paragraph (b) of this section do not apply, in determining whether two
or more offerings are to be treated as one for the purpose of
registration or qualifying for an exemption from registration under the
Act, offers and sales will not be integrated if, based on the
particular facts and circumstances, the issuer can establish that each
offering either complies with the registration requirements of the Act,
or that an exemption from registration is available for the particular
offering. In making this determination:
    (1) For an exempt offering for which general solicitation is not
permitted, offers and sales will not be integrated with other offerings
if the issuer has a reasonable belief, based on the facts and
circumstances, that:
    (i) The purchasers in each exempt offering were not solicited
through the use of general solicitation; or
    (ii) The purchasers in each exempt offering established a
substantive relationship with the issuer (or person acting on the
issuer's behalf) prior to the commencement of the offering not
permitting general solicitation; and
    (2) For an exempt offering permitting general solicitation that
includes information about the material terms of a concurrent offering
under another exemption also permitting general solicitation, the
offering materials must include the necessary legends for, and

otherwise comply with, the requirements of each exemption.
    (b) Safe harbors: No integration analysis under paragraph (a) of
this section is required, if any of the following non-exclusive safe
harbors apply:
    (1) Any offering made more than 30 calendar days before the
commencement of any other offering, or more than 30 calendar days after
the termination or completion of any other offering, will not be
integrated, provided that for an exempt offering for which general
solicitation is not permitted, the purchasers either:
    (i) Were not solicited through the use of general solicitation; or
    (ii) Established a substantive relationship with the issuer prior
to the commencement of the offering for which general solicitation is
not permitted;
    (2) Offers and sales made in compliance with Rule 701 (Sec.
230.701), pursuant to an employee benefit plan, or in compliance with
Regulation S (Sec. Sec.  230.901 through 230.906) will not be
integrated with other offerings;
    (3) An offering for which a registration statement under the Act
has been filed will not be integrated if it is made subsequent to:
    (i) A terminated or completed offering for which general
solicitation is not permitted;
    (ii) A terminated or completed offering for which general
solicitation is permitted made only to qualified institutional buyers
and institutional accredited investors; or
    (iii) An offering for which general solicitation is permitted that
terminated or completed more than 30 calendar days prior to the
commencement of the registered offering; or
    (4) Offers and sales made in reliance on an exemption for which
general solicitation is permitted will not be integrated if made
subsequent to any prior terminated or completed offering.
    (c) For purposes of this section, an offering would be deemed to be
terminated or completed if:
    (1) Made in reliance on Section 15 U.S.C. 77d(a)(2) (4(a)(2)),
Regulation D (Sec. Sec.  230.501 through 230.508), or Rules 147 (Sec.
230.147) or 147A (Sec.  230.147A), on the later of the date:
    (i) The issuer entered into a binding commitment to sell securities
under the offering (subject only to conditions outside of the
investor's control); or
    (ii) The issuer and its agents ceased efforts to make further
offers to sell the issuer's securities;
    (2) Made in reliance on Regulation A (Sec. Sec.  230.251 through
230.263), on the:
    (i) Withdrawal of an offering statement under Rule 259(a) (Sec.
230.259(a));
    (ii) Filing of a Form 1-Z (Sec.  239.94 of this chapter) with
respect to that offering;
    (iii) Declaration by the Commission that the offering statement has
been abandoned under Rule 259(b) (Sec.  230.259(b)); or
    (iv) Third anniversary of the initial qualification date of the
offering statement, in the case of continuous or delayed offerings;
    (3) Made in reliance on Regulation Crowdfunding, on the deadline of
the offering identified in the offering materials pursuant to Rule
201(g) (Sec.  227.201(g) of this chapter), or indicated by the
Regulation Crowdfunding intermediary in any notice to investors
delivered under Rule 304(b) (Sec.  227.304(b) of this chapter);
    (4) Made in reliance on a filed registration statement:
    (i) On the withdrawal of the registration statement after the
Commission grants such application under Rule 477 (Sec.  230.477);
    (ii) On the filing of an amendment or supplement to the
registration statement indicating that the registered offering has been
terminated or completed and the deregistering of any unsold securities
if required by Item 512(a)(3) of Regulation S-K (Sec.  229.512(a)(3) of
this chapter);
    (iii) On the entry of an order of the Commission declaring that the
registration statement has been abandoned under Rule 479 (Sec.
230.479); or
    (iv) As set forth in Rule 415(a)(5) (Sec.  230.415(a)(5)).

Sec.  230.155  [Removed and Reserved]

0
14. Remove and reserve Sec.  230.155.
0
15. Add Sec.  230.241 to read as follows:

Sec.  230.241  Solicitations of interest.

    (a) Solicitation of interest. At any time before making a
determination as to the exemption from registration under the Act under
which an offering of securities will be conducted, an issuer or any
person authorized to act on behalf of an issuer may communicate orally
or in writing to determine whether there is any interest in a
contemplated securities offering. Such communications are deemed to be
an offer of a security for sale for purposes of the antifraud
provisions of the federal securities laws. No solicitation or
acceptance of money or other consideration, nor of any commitment,
binding or otherwise, from any person is permitted until the issuer
makes a determination as to the exemption to be relied upon and the
offering, meeting the requirements of the exemption, is commenced.
    (b) Conditions. The communications must state that:
    (1) The issuer is considering an offering of securities exempt from
registration under the Act, but has not determined a specific exemption
from registration the issuer intends to rely upon for the subsequent
offer and sale of the securities;
    (2) No money or other consideration is being solicited, and if sent
in response, will not be accepted;
    (3) No offer to buy the securities can be accepted and no part of
the purchase price can be received until the issuer determines the
exemption under which the offering is intended to be conducted and,
where applicable, the filing, disclosure, or qualification requirements
of such exemption are met; and
    (4) A person's indication of interest involves no obligation or
commitment of any kind.
    (c) Indications of interest. Any written communication under this
rule may include a means by which a person may indicate to the issuer
that such person is interested in a potential offering. The issuer may
require the name, address, telephone number, and/or email address in
any response form included pursuant to this paragraph (c).
0
16. Amend Sec.  230.251 by revising paragraphs (a)(2), (b)(7), and (c)
to read as follows:

Sec.  230.251  Scope of exemption.

* * * * *
    (a) * * *
    (2) Tier 2. Offerings pursuant to Regulation A in which the sum of
the aggregate offering price and aggregate sales does not exceed
$75,000,000, including not more than $22,500,000 offered by all selling
security holders that are affiliates of the issuer (``Tier 2
offerings'').
* * * * *
    (b) * * *
    (7) Has filed with the Commission all reports required to be filed,
if any, pursuant to Rule 257 (Sec.  230.257) or pursuant to Section 13
or 15(d) of the Exchange Act (15 U.S.C. 78m or 15 U.S.C. 78o) during
the two years before the filing of the offering statement (or for such
shorter period that the issuer was required to file such reports); and
* * * * *
    (c) Integration with other offerings. To determine whether offers
and sales should be integrated, please see Rule 152 (Sec.  230.152).
* * * * *

Sec.  230.255  [Amended]

0
17. Amend Sec.  230.255 by removing paragraph (e).
0
18. Amend Sec.  230.259 by revising paragraph (b) to read as follows:

Sec.  230.259  Withdrawal or abandonment of offering statements.

* * * * *
    (b) Abandonment. When an offering statement, or a post-
qualification amendment to such statement, has been on file with the
Commission for nine months without amendment and has not become
qualified, the Commission may, in its discretion, declare the offering
statement or post-qualification amendment abandoned. If the offering
statement has been amended, or if the post-qualification amendment has
been amended, the nine-month period shall be computed from the date of
the latest amendment.
0
19. Amend Sec.  230.262 by revising paragraphs (a) and (b)(3) to read
as follows:

Sec.  230.262  Disqualification provisions.

    (a) Disqualification events. No exemption under this Regulation A
(Sec. Sec.  230.251 through 230.346) shall be available for a sale of
securities if the issuer; any predecessor of the issuer; any affiliated
issuer; any director, executive officer, other officer participating in
the offering, general partner or managing member of the issuer; any
beneficial owner of 20 percent or more of the issuer's outstanding
voting equity securities, calculated on the basis of voting power; any
promoter connected with the issuer in any capacity at the time of
filing, any offer after qualification, or such sale; any person that
has been or will be paid (directly or indirectly) remuneration for
solicitation of purchasers in connection with such sale of securities;
any general partner or managing member of any such solicitor; or any
director, executive officer or other officer participating in the
offering of any such solicitor or general partner or managing member of
such solicitor:
    (1) Has been convicted, within ten years before the filing of the
offering statement or such sale (or five years, in the case of issuers,
their predecessors and affiliated issuers), of any felony or
misdemeanor:
    (i) In connection with the purchase or sale of any security;
    (ii) Involving the making of any false filing with the Commission;
or
    (iii) Arising out of the conduct of the business of an underwriter,
broker, dealer, municipal securities dealer, investment adviser or paid
solicitor of purchasers of securities;
    (2) Is subject to any order, judgment or decree of any court of
competent jurisdiction, entered within five years before the filing of
the offering statement or such sale that, at the time of such filing or
such sale, restrains or enjoins such person from engaging or continuing
to engage in any conduct or practice:
    (i) In connection with the purchase or sale of any security;
    (ii) Involving the making of any false filing with the Commission;
or
    (iii) Arising out of the conduct of the business of an underwriter,
broker, dealer, municipal securities dealer, investment adviser or paid
solicitor of purchasers of securities;
    (3) Is subject to a final order (as defined in Rule 261 (Sec.
230.261)) of a state securities commission (or an agency or officer of
a state performing like functions); a state authority that supervises
or examines banks, savings associations, or credit unions; a state
insurance commission (or an agency or officer of a state performing
like functions); an appropriate federal banking agency; the U.S.
Commodity Futures Trading Commission; or the National Credit Union
Administration that:
    (i) At the time of the filing of the offering statement or such
sale, bars the person from:
    (A) Association with an entity regulated by such commission,
authority, agency, or officer;
    (B) Engaging in the business of securities, insurance or banking;
or
    (C) Engaging in savings association or credit union activities; or
    (ii) Constitutes a final order based on a violation of any law or
regulation that prohibits fraudulent, manipulative, or deceptive
conduct entered within ten years before such filing of the offering
statement or such sale;
    (4) Is subject to an order of the Commission entered pursuant to
section 15(b) or 15B(c) of the Securities Exchange Act of 1934 (15
U.S.C. 78o(b) or 78o-4(c)) or section 203(e) or (f) of the Investment
Advisers Act of 1940 (15 U.S.C. 80b-3(e) or (f)) that, at the time of
the filing of the offering statement or such sale:
    (i) Suspends or revokes such person's registration as a broker,
dealer, municipal securities dealer or investment adviser;
    (ii) Places limitations on the activities, functions or operations
of such person; or
    (iii) Bars such person from being associated with any entity or
from participating in the offering of any penny stock;
    (5) Is subject to any order of the Commission entered within five
years before the filing of the offering statement or such sale that, at
the time of such filing or sale, orders the person to cease and desist
from committing or causing a violation or future violation of:
    (i) Any scienter-based anti-fraud provision of the federal
securities laws, including without limitation section 17(a)(1) of the
Securities Act of 1933 (15 U.S.C. 77q(a)(1)), section 10(b) of the
Securities Exchange Act of 1934 (15 U.S.C. 78j(b)) and 17 CFR 240.10b-
5, section 15(c)(1) of the Securities Exchange Act of 1934 (15 U.S.C.
78o(c)(1)) and section 206(1) of the Investment Advisers Act of 1940
(15 U.S.C. 80b-6(1)), or any other rule or regulation thereunder; or
    (ii) Section 5 of the Securities Act of 1933 (15 U.S.C. 77e).
    (6) Is suspended or expelled from membership in, or suspended or
barred from association with a member of, a registered national
securities exchange or a registered national or affiliated securities
association for any act or omission to act constituting conduct
inconsistent with just and equitable principles of trade;
    (7) Has filed (as a registrant or issuer), or was or was named as
an underwriter in, any registration statement or offering statement
filed with the Commission that, within five years before the filing of
the offering statement or such sale, was the subject of a refusal
order, stop order, or order suspending the Regulation A exemption, or
is, at the time of such filing or such sale, the subject of an
investigation or proceeding to determine whether a stop order or
suspension order should be issued; or
    (8) Is subject to a United States Postal Service false
representation order entered within five years before the filing of the
offering statement or such sale, or is, at the time of such filing or
such sale, subject to a temporary restraining order or preliminary
injunction with respect to conduct alleged by the United States Postal
Service to constitute a scheme or device for obtaining money or
property through the mail by means of false representations.
    Instruction to paragraph (a): With respect to any beneficial owner
of 20 percent or more of the issuer's outstanding voting equity
securities, calculated on the basis of voting power, the issuer is
required to determine whether a disqualifying event has occurred only
as of the time of filing of the offering statement and not from the
time of such sale.
    (b) * * *

    (3) If, before the filing of the offering statement or the relevant
sale, the court or regulatory authority that entered the relevant
order, judgment or decree advises in writing (whether contained in the
relevant judgment, order or decree or separately to the Commission or
its staff) that disqualification under paragraph (a) of this section
should not arise as a consequence of such order, judgment or decree; or
* * * * *
0
20. Amend Sec.  230.502 by:
0
a. Revising paragraph (a);
0
b. Removing the Note following paragraph (a);
0
c. Revising paragraph (b)(2)(i)(B); and
0
d. Adding paragraph (b)(2)(viii).
    The revisions and addition read as follows:

Sec.  230.502  General conditions to be met.

* * * * *
    (a) Integration. To determine whether offers and sales should be
integrated, please see Rule 152 (Sec.  230.152).
    (b) * * *
    (2) * * *
    (i) * * *
    (B) Financial statement information--(1) Offerings up to
$20,000,000. The financial statement information required by paragraph
(b) of Part F/S of Form 1-A. Such financial statement information must
be prepared in in accordance with generally accepted accounting
principles in the United States (US GAAP). If the issuer is a foreign
private issuer, such financial statements must be prepared in
accordance with either US GAAP or International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards
Board (IASB). If the financial statements comply with IFRS, such
compliance must be explicitly and unreservedly stated in the notes to
the financial statements and if the financial statements are audited,
the auditor's report must include an opinion on whether the financial
statements comply with IFRS as issued by the IASB.
    (2) Offerings over $20,000,000. The financial statement information
required by paragraph (c) of Part F/S of Form 1-A (referenced in Sec.
239.90 of this chapter). If the issuer is a foreign private issuer,
such financial statements must be prepared in accordance with either US
GAAP or IFRS as issued by the IASB. If the financial statements comply
with IFRS, such compliance must be explicitly and unreservedly stated
in the notes to the financial statements and the auditor's report must
include an opinion on whether the financial statements comply with IFRS
as issued by the IASB.
* * * * *
    (viii) At a reasonable time prior to the sale of securities to any
purchaser that is not an accredited investor in a transaction under
Sec.  230.506(b), the issuer shall provide the purchaser with any
written communications used under the authorization of Rule 241 within
30 days of the such sale.
* * * * *
0
21. Amend Sec.  230.504, by revising the section heading, paragraph
(b)(2), and the instruction to paragraph (b)(2) to read as follows:

Sec.  230.504  Exemption for limited offerings and sales of securities
not exceeding $10,000,000.

* * * * *
    (b) * * *
    (2) The aggregate offering price for an offering of securities
under this Sec.  230.504, as defined in Sec.  230.501(c), shall not
exceed $10,000,000, less the aggregate offering price for all
securities sold within the twelve months before the start of and during
the offering of securities under this Sec.  230.504 or in violation of
section 5(a) of the Securities Act.
    Instruction to paragraph (b)(2): If a transaction under Sec.
230.504 fails to meet the limitation on the aggregate offering price,
it does not affect the availability of this Sec.  230.504 for the other
transactions considered in applying such limitation. For example, if an
issuer sold $10,000,000 of its securities on January 1, 2020, under
this Sec.  230.504 and an additional $500,000 of its securities on July
1, 2020, this Sec.  230.504 would not be available for the later sale,
but would still be applicable to the January 1, 2020, sale.
* * * * *
0
22. Amend Sec.  230.506 by:
0
a. Revising paragraph (b)(2)(i);
0
b. Removing the word ``or'' from the end of paragraph (c)(2)(ii)(B)(2);
0
c. Removing the ``.'' and adding in its place ``;'' at the end of
paragraph (c)(2)(ii)(C)(4);
0
d. Removing the ``.'' and adding in its place ``; or'' at the end of
paragraph (c)(2)(ii)(D);
0
e. Adding paragraph (c)(2)(ii)(E); and
0
f. Revising the heading to Instructions to paragraph (c)(2)(ii)(A)
through (D) of this section.
    The revisions and addition read as follows:

Sec.  230.506  Exemption for limited offers and sales without regard to
dollar amount of offering.

* * * * *
    (b) * * *
    (2) * * *
    (i) Limitation on number of purchasers. There are no more than, or
the issuer reasonably believes that there are no more than, 35
purchasers of securities from the issuer in offerings under this
section in any 90 calendar day period.
* * * * *
    (c) * * *
    (2) * * *
    (ii) * * *
    (E) In regard to any person that the issuer has previously verified
as an accredited investor in accordance with this paragraph (c)(2)(ii),
so long as the issuer is not aware of information to the contrary,
obtaining a written representation from such person at the time of sale
that he or she qualifies as an accredited investor.
    Instructions to paragraph (c)(2)(ii)(A) through (E) of this
section: * * *
* * * * *
0
23. Amend Sec.  230.902 by revising paragraph (c)(1) and adding
paragraph (c)(3)(ix) to read as follows:

Sec.  230.902  Definitions.

* * * * *
    (c) * * *
    (1) Except as specified in this section, ``directed selling
efforts'' means any activity undertaken for the purpose of, or that
could reasonably be expected to have the effect of, conditioning the
market in the United States for any of the securities being offered in
reliance on this Regulation S (Sec. Sec.  230.901 through 230.906, and
Preliminary Notes). Such activity includes placing an advertisement in
a publication ``with a general circulation in the United States'' that
refers to the offering of securities being made in reliance upon this
Regulation S.
* * * * *
    (3) * * *
    (ix) Activity undertaken in connection with offers or sales under
an exemption from registration under the Act that involves general
solicitation or general advertising, provided that such activity is not
undertaken for the purpose of conditioning the market in the United
States for any of the securities being offered in reliance on this
Regulation S.
* * * * *
0
24. Add Sec.  230.906 to read as follows:

Sec.  230.906  General solicitation; transfer restrictions.

    An issuer that engages in activity in connection with offers or
sales under an exemption from registration under the Act that is deemed
to not be ``directed selling efforts'' pursuant Sec.  230.902(c)(3)(ix)
may concurrently

make offers or sales in reliance on this Regulation S (Sec. Sec.
230.901 through 230.906, and Preliminary Notes). However, securities
acquired from the issuer, a distributor, or any of their respective
affiliates in such Regulation S offering are not permitted to be resold
to a U.S. person or for the account or benefit of a U.S. person for a
period of six months from the date of sale, except to qualified
institutional buyers, as defined in Sec.  230.144A, or accredited
investors that are institutions, as defined in Sec.  230.501(a).

PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

0
25. The authority citation for part 239 continues to read as follows:

    Authority:  15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-
3, 77sss, 78c, 78l, 78m,78n, 78o(d), 78o-7 note, 78u-5, 78w(a),
78ll, 78mm, 80a-2(a), 80a-3, 80a-8, 80a-9, 80a-10, 80a-13, 80a-24,
80a-26, 80a-29, 80a-30, and 80a-37; and sec. 107, Pub. L. 112-106,
126 Stat. 312, unless otherwise noted.
* * * * *
0
26. Amend Form S-6 (referenced in Sec.  239.16) by revising Additional
Instruction 3 of ``Instructions as to Exhibits'' to read as follows:

    Note:  The text of Form S-6 does not, and this amendment will
not, appear in the Code of Federal Regulations.

Form S-6

* * * * *

Instructions as to Exhibits

* * * * *
    Additional Instructions:
* * * * *
    3. The registrant may redact specific provisions or terms of
exhibits required to be filed by paragraph (9) of section IX of Form N-
8B-2 (Exhibits) if the registrant customarily and actually treats that
information as private or confidential and if the omitted information
is not material. If it does so, the registrant should mark the exhibit
index to indicate that portions of the exhibit have been omitted and
include a prominent statement on the first page of the redacted exhibit
that certain identified information has been excluded from the exhibit
because it is both not material and the type that the registrant treats
as private or confidential. The registrant also must include brackets
indicating where the information is omitted from the filed version of
the exhibit. If requested by the Commission or its staff, the
registrant must promptly provide on a supplemental basis an unredacted
copy of the exhibit and its materiality and privacy or confidentiality
analyses. Upon evaluation of the registrant's supplemental materials,
the Commission or its staff may require the registrant to amend its
filing to include in the exhibit any previously redacted information
that is not adequately supported by the registrant's analyses. The
registrant may request confidential treatment of the supplemental
material submitted under this Instruction 3 pursuant to Rule 83 of the
Commission's Organizational Rules [17 CFR 200.83] while it is in the
possession of the Commission or its staff. After completing its review
of the supplemental information, the Commission or its staff will
return or destroy it, if the registrant complies with the procedures
outlined in Rule 418 under the Securities Act [17 CFR 230.418].
* * * * *
0
27. Amend Form N-14 (referenced in Sec.  239.23) by revising
Instruction 3 to Item 16 to read as follows:

    Note:  The text of Form N-14 does not, and this amendment will
not, appear in the Code of Federal Regulations.

Form N-14

* * * * *
    Item 16. Exhibits
* * * * *
    Instructions:
* * * * *
    3. The registrant may redact specific provisions or terms of
exhibits required to be filed by paragraph (13) of this Item if the
registrant customarily and actually treats that information as private
or confidential and if the omitted information is not material. If it
does so, the registrant should mark the exhibit index to indicate that
portions of the exhibit have been omitted and include a prominent
statement on the first page of the redacted exhibit that certain
identified information has been excluded from the exhibit because it is
both not material and the type that the registrant treats as private or
confidential. The registrant also must include brackets indicating
where the information is omitted from the filed version of the exhibit.
If requested by the Commission or its staff, the registrant must
promptly provide on a supplemental basis an unredacted copy of the
exhibit and its materiality and privacy or confidentiality analyses.
Upon evaluation of the registrant's supplemental materials, the
Commission or its staff may require the registrant to amend its filing
to include in the exhibit any previously redacted information that is
not adequately supported by the registrant's analyses. The registrant
may request confidential treatment of the supplemental material
submitted under this Instruction 3 pursuant to Rule 83 of the
Commission's Organizational Rules [17 CFR 200.83] while it is in the
possession of the Commission or its staff. After completing its review
of the supplemental information, the Commission or its staff will
return or destroy it, if the registrant complies with the procedures
outlined in Rule 418 under the Securities Act [17 CFR 230.418].
* * * * *
0
28. Amend Form 1-A (referenced in Sec.  239.90) by:
0
a. Revising General Instruction I;
0
b. Revising General Instruction III(a);
0
c. Revising paragraphs 13 and 17 of Part III, Item 17; and
0
d. Adding an instruction at the end of Part III, Item 17.
    The revisions and addition read as follows:

    Note:  The text of Form 1-A does not, and this amendment will
not, appear in the Code of Federal Regulations.

FORM 1-A

REGULATION A OFFERING STATEMENT UNDER THE SECURITIES ACT OF 1933

GENERAL INSTRUCTIONS

I. Eligibility Requirements for Use of Form 1-A.

    This Form is to be used for securities offerings made pursuant to
Regulation A (17 CFR 230.251 through 230.263). Careful attention should
be directed to the terms, conditions and requirements of Regulation A,
especially Rule 251, because the exemption is not available to all
issuers or for every type of securities transaction. Further, the
aggregate offering price and aggregate sales of securities in any 12-
month period is strictly limited to $20 million for Tier 1 offerings
and $75 million for Tier 2 offerings, including no more than $6 million
offered by all selling securityholders that are affiliates of the
issuer for Tier 1 offerings and $22.5 million by all selling
securityholders that are affiliates of the issuer for Tier 2 offerings.
Please refer to Rule 251 of Regulation A for more details.
* * * * *

III. Incorporation by Reference and Cross-Referencing.

* * * * *
    (a) The use of incorporation by reference and cross-referencing in
Part II of this Form:
    (1) Is limited to the following items:

    (A) Items 2-14 of Part II and Part F/S if following the Offering
Circular format;
    (B) Items 3-11 of Form S-1 if following the Part I of Form S-1
format; or
    (C) Items 3-28, and 30 of Form S-11 if following the Part I of Form
S-11 format;
    (2) May only incorporate by reference previously submitted or filed
financial statements if the issuer meets the following requirements:
    (A) The issuer has filed with the Commission all reports and other
materials required to be filed, if any, pursuant to Rule 257 (Sec.
230.257 of this chapter) or by Sections 13(a), 14 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the issuer was required to file such reports
and other materials);
    (B) the issuer makes the financial statement information that is
incorporated by reference pursuant to this item readily available and
accessible on a website maintained by or for the issuer; and
    (C) the issuer must state that it will provide to each holder of
securities, including any beneficial owner, a copy of the financial
statement information that have been incorporated by reference in the
offering statement upon written or oral request, at no cost to the
requester, and provide the issuer's website address, including the
uniform resource locator (URL) where the incorporated financial
statements may be accessed.
* * * * *

Part III--Exhibits

* * * * *

Item 17. Description of Exhibits

* * * * *
    13. ``Testing-the-waters'' materials--Any written communication or
broadcast script used under the authorization of Rule 241 within 30
days of the initial filing of the offering statement, and any written
communication or broadcast script used under the authorization of Rule
255. Materials used under the authorization of Rule 255 need not be
filed if they are substantively the same as materials previously filed
with the offering statement.
* * * * *
    17. Additional exhibits--Any additional exhibits which the issuer
may wish to file, which must be so marked as to indicate clearly the
subject matters to which they refer.
* * * * *
    Instruction to Item 17:
    The issuer may redact specific provisions or terms of exhibits
required to be filed by paragraph 6 or 7 of this Item, if the issuer
customarily and actually treats that information as private or
confidential and if the omitted information is not material. If it does
so, the issuer should mark the exhibit index to indicate that portions
of the exhibit have been omitted and include a prominent statement on
the first page of the redacted exhibit that certain identified
information has been excluded from the exhibit because it is both not
material and is the type that the registrant treats as private or
confidential. The issuer also must include brackets indicating where
the information is omitted from the filed version of the exhibit. If
requested by the Commission or its staff, the issuer must promptly
provide on a supplemental basis an unredacted copy of the exhibit and
its materiality and privacy or confidentiality analyses. Upon
evaluation of the issuer's supplemental materials, the Commission or
its staff may require the issuer to amend its filing to include in the
exhibit any previously redacted information that is not adequately
supported by the issuer's analyses. The issuer may request confidential
treatment of the supplemental material submitted under paragraphs 6 or
7 pursuant to Rule 83 (Sec.  200.83 of this chapter) while it is in the
possession of the Commission or its staff. After completing its review
of the supplemental information, the Commission or its staff will
return or destroy it if the registrant complies with the procedures
outlined in Rule 418 (Sec.  230.418 of this chapter).
* * * * *
0
29. Amend Form C (referenced in Sec.  239.900) by:
0
a. Adding items to the Cover Page after ``website of the Issuer,''
0
b. Revising General Instruction I;
0
c. Revising Instruction 1 to the Signature; and
0
d. Revising the introductory paragraphs in the Optional Question and
Answer Format for an Offering Statement; and
0
e. Revising Question 11 in the Optional Question and Answer Format for
an Offering Statement.
    The addition and revisions to read as follows:

    Note:  The text of Form C does not, and this amendment will not,
appear in the Code of Federal Regulations.

Form C

Under The Securities Act of 1933

* * * * *
    Is there a co-issuer? __ yes __ no. If yes,
    Name of co-issuer: __________
    Leal status of co-issuer:
    Form: __________
    Jurisdiction of Incorporation/Organization: __________
    Date of organization: __________
    Physical address of co-issuer: _______
    Website of co-issuer: ________
* * * * *

GENERAL INSTRUCTIONS

I. Eligibility Requirements for Use of Form C

    This Form shall be used for the offering statement, and any related
amendments and progress reports, required to be filed by any issuer
offering or selling securities in reliance on the exemption in
Securities Act Section 4(a)(6) and in accordance with Section 4A and
Regulation Crowdfunding (Sec. Sec.  227.100 through 227.503). The term
``issuer'' includes any co-issuer jointly offering or selling
securities with an issuer in reliance on the exemption in Securities
Act Section 4(a)(6) and in accordance with Securities Act Section 4A
and Regulation Crowdfunding (Sec. Sec.  227.100 through 227.503) This
Form also shall be used for an annual report required pursuant to Rule
202 of Regulation Crowdfunding (Sec.  227.202 of this chapter) and for
the termination of reporting required pursuant to Rule 203(b)(2) of
Regulation Crowdfunding (Sec.  227.203(b)(2) of this chapter). Careful
attention should be directed to the terms, conditions and requirements
of the exemption.
* * * * *

SIGNATURES

* * * * *
    Instructions.
    1. The form shall be signed by the issuer, its principal executive
officer or officers, its principal financial officer, its controller or
principal accounting officer and at least a majority of the board of
directors or persons performing similar functions. If there is a co-
issuer, the form shall also be signed by the co-issuer, its principal
executive officer or officers, its principal financial officer, its
controller or principal accounting officer and at least a majority of
the board of directors or persons performing similar functions.
* * * * *

OPTIONAL QUESTION AND ANSWER FORMAT FOR AN OFFERING STATEMENT

    Respond to each question in each paragraph of this part. Set forth
each

question and any notes, but not any instructions thereto, in their
entirety. If disclosure in response to any question is responsive to
one or more other questions, it is not necessary to repeat the
disclosure. If a question or series of questions is inapplicable or the
response is available elsewhere in the Form, either state that it is
inapplicable, include a cross-reference to the responsive disclosure,
or omit the question or series of questions. The term ``issuer'' in
these questions and answers includes any ``co-issuer'' jointly offering
or selling securities with the issuer in reliance on the exemption in
Securities Act Section 4(a)(6) and in accordance with Securities Act
Section 4A and Regulation Crowdfunding (Sec. Sec.  227.100 through
227.503). Any information provided with respect to the issuer should
also be separately provided with respect to any co-issuer.
    Be very careful and precise in answering all questions. Give full
and complete answers so that they are not misleading under the
circumstances involved. Do not discuss any future performance or other
anticipated event unless you have a reasonable basis to believe that it
will actually occur within the foreseeable future. If any answer
requiring significant information is materially inaccurate, incomplete
or misleading, the Company, its management and principal shareholders
may be liable to investors based on that information.
* * * * *
    11. (a) Did the issuer make use of any written communication or
broadcast script for testing-the-waters either (i) under the
authorization of Rule 241 within 30 days of the initial filing of the
offering statement, or (ii) under the authorization of Rule 206? If so,
provide copies of the materials used.
    (b) How will the issuer complete the transaction and deliver
securities to the investors?
* * * * *

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

0
30. The authority citation for part 249 continues to read in part as
follows:

    Authority: 15 U.S.C. 78a et seq. and 7201 et seq.; 12 U.S.C.
5461 et seq.; 18 U.S.C. 1350; Sec. 953(b), Pub. L. 111-203, 124
Stat. 1904; Sec. 102(a)(3), Pub. L. 112-106, 126 Stat. 309 (2012);
Sec. 107, Pub. L. 112-106, 126 Stat. 313 (2012), and Sec. 72001,
Pub. L. 114-94, 129 Stat. 1312 (2015), unless otherwise noted.

    Section 240.220f is also issued under secs. 3(a), 202, 208, 302,
306(a), 401(a), 401(b), 406 and 407, Pub. L. 107-204, 116 Stat. 745.
* * * * *