SEC Amends Rules 147 And 504 Under The Securities Act

The U.S. Securities and Exchange Commission (the "SEC") recently adopted final rules that are intended to modernize how companies can raise money to fund their businesses through intrastate (Rules 147 and 147A) and small offerings (Rule 504) while maintaining investor protections.

Amendments to Rule 147 and a new Rule 147A

The new rules update the existing intrastate offering framework that permits companies to raise money from investors within their state without concurrently registering the offers and sales at the federal level. An amended Rule 147 would remain a safe harbor under Section 3(a)(11) of the Securities Act of 1933 (the "Securities Act"), so that issuers may continue to use the rule for securities offerings relying on current state law exemptions. A new Rule 147A would be substantially identical to Rule 147 except that it would allow offers to be accessible to out‑of‑state residents and for companies to be incorporated or organized out‑of‑state.