Investment Management and Financial Markets Group
April 14, 2008
The Securities and Exchange Commission (SEC) recently adopted rule amendments revising Form D to simplify, restructure and update its informational disclosure requirements. Additionally, the SEC announced that every Form D would be required to be filed with the SEC electronically through a new online filing system, with the data being both interactive and searchable.
Form D serves as the official notice to the SEC of an offering of securities made without registration under the Securities Act of 1933 by either a public or a private company in reliance on an exemption provided by Regulation D. In addition, pursuant to the National Securities Markets Improvement Act of
1996 (NSMIA), many states also require a copy of Form D to be filed with their state securities division as a prerequisite to preemption of securities registration requirements under state securities laws.
The revisions to Form D are effective September 15, 2008. Beginning on that date, issuers will have the option of filing the revised Form D either in paper copy or electronically, or filing Temporary Form D
(which is almost identical to the current Form D) in paper copy. If a paper form is used, the issuer may use either the current form or a printed version of the new electronic form. Beginning March 16, 2009, every Form D must be filed with the SEC electronically and must use the new Form D format. The SEC adopted the amendments to Form D on February 6, 2008.
•
•
Revisions to Form D
The rule amendments reorganize the information requested in Form D into 16 newly numbered items that generally reflect the information currently requested on the form. The principal changes are:
• Date of First Sale : An issuer must specify the date of first sale or indicate that the first sale has yet to occur.
Length of Offering
: Issuers must report whether the offering is expected to last over a year.
Number of Investors : Issuers must disclose the total number of investors, including the number of non-accredited investors, if the issuer has sold or may sell interests to such nonaccredited investors.
•
•
Revenue Range Information : For issuers other than pooled investment funds, revised Form D asks the issuer to indicate in which of several specified dollar ranges its revenue for its most recent fiscal year falls. An issuer may indicate that this disclosure item is not applicable or may choose the “Decline to Disclose” option.
Minimum Investment Amount : The only minimum investment amount information an issuer must now report on revised Form D is the minimum accepted from outside investors.
C H I C A G O ● S A N D I E G O ● W A S H I N G T O N

•
•
•
•
•
•
Registration Exemption : Issuers must provide more specific information on the registration exemption they are claiming than previously required.
Multiple-Issuer Offerings : Filers may now identify all issuers in a multiple-issuer offering in a single Form D filing.
Related Persons : Issuers no longer are required to identify owners of 10 percent or more of a class of the issuer’s equity securities as “related persons.”
Description of the Issuer : Issuers no longer are required to provide a business description of the issuer. Rather, issuers are classified by industry from a pre-established list of industries.
Compensation Information : Issuers are required to provide information about the amount and recipients of any direct or indirect cash or non-cash compensation paid in connection with the sale of securities in the offering.
Amendments of a Previously Filed Form D : Amendments to a previously filed Form D are required in three specific instances only:
1. annually, on or before the first anniversary of the filing of the Form D or the filing of the most recent amendment, if the offering is continuing at that time;
2.
3. to correct a material mistake of fact or error in the previously filed notice, as soon as practicable after discovery of the mistake or error; and subject to several exceptions, to reflect a change in the information provided in a previously filed notice, to be filed as soon as practicable after the change.
After the transition period ends on March 16, 2009, the new rule amendments will apply to all
Regulation D filings, even those filed with a current Form D. Thus, issuers making continuous offerings filed several years ago will need to consider whether an amendment is required under the new rule amendments.
Electronic Filings
The new online system will allow the SEC to capture and tag data from Form Ds filed electronically, creating an interactive and searchable system available to both the general public and federal and state securities regulators. The searchable system will allow securities regulators and securities self-regulatory organizations to more effectively monitor private offerings and use the data gathered from Form Ds as an enforcement tool. Because the SEC’s new online system for revised Form Ds will be part of the EDGAR system, Form D issuers will need the same codes as are currently required to file electronically on EDGAR. If there are multiple issuers, each issuer will need its own set of EDGAR filing codes.
State Securities Law Implications
One of the SEC’s stated goals in adopting the rule amendments is to provide issuers with “one-stop filing” for Form D information, with both the SEC and designated states, in a single electronic filing. In the adopting release for the rule amendments, the SEC states it is working actively with the North
American Securities Administrators Association (NASAA) to develop such “one-stop filing” as soon as practicable. The SEC’s electronic filing system will not collect fees on behalf of any states. Until further
2

action is taken by the NASAA on behalf of the states, issuers will need to make filings with the various states in connection with their private offerings in whatever format is prescribed by the states, most often by the filing of a paper copy of Form D. It should be noted, however, that because of some of the changes to Form D under the amendments, the revised Form D may no long comply with certain state securities law requirements. Moreover, revised Form D requires the issuer to provide state securities regulators with any information provided to offerees, if requested in writing and if “in accordance with applicable law.” Offering materials are not currently required to be filed with the SEC or the states. The rule amendments’ release clarifies, however, that NSMIA preempts state requirements to file offering materials in Rule 506 offerings, unless the state regulator asks for the materials pursuant to the state’s anti-fraud authority. Thus, state regulators may not “regularly” request copies of offering materials from
Rule 506 filers, and this new requirement is not to be interpreted as providing a basis for state regulators to regularly request such materials.
For further information, please contact Cameron Avery 312-807-4302, Kevin Bettsteller 312-807-4442,
Paul Dykstra 312-781-6029, Jennifer Esquibel 312-807-4262, David Glatz 312-807-4295, Alan Goldberg 312-807-4227,
Elizabeth Hudson 312-807-4376, Anna Paglia 312-781-7163, Andrew Pfau 312-807-4386, Paulita Pike 312-781-6027, Eric
Purple 202-955-7081, Bruce Rosenblum 202-955-7087, Donald Weiss 312-807-4303, Gwendolyn Williamson 202-955-7059, or Stacy Winick 202-955-7040 of Bell, Boyd & Lloyd’s Investment Management and Financial Markets Group or visit our Web site at www.bellboyd.com.
This publication has been prepared by the Investment Management and Financial Markets Group of Bell, Boyd & Lloyd LLP for clients and friends of the firm and is for information only. It is not a substitute for legal advice or individual analysis of a particular legal matter. Readers should not act without seeking professional legal counsel. Transmission and receipt of this publication does not create an attorney-client relationship.
© 2008 Bell, Boyd & Lloyd LLP All Rights Reserved www.bellboyd.com
70 West Madison Street
Chicago, Illinois 60602 t. 312-372-1121 f. 312-827-8000
3580 Carmel Mountain Road 1615 L Street, N.W.
San Diego, California 92130 Washington, DC 20036 t. 858-509-7400 f. 858-509-7466 t. 202-466-6300 f. 202-463-0678