SCC announces Electronic Filing Depository for certain securities offerings

economic-forecast-headerThe State Corporation Commission (SCC) announced this week the launch of the online Electronic Filing Depository (EFD) that will enhance the efficiency of the regulatory filing process for certain exempt securities offerings.

Developed by the North American Securities Administrators Association (NASAA), of which the SCC’s Division of Securities and Retail Franchising is a member, EFD is an online, web-based system that allows a securities issuer to submit a Form D for a Regulation D, Rule 506 offering to state securities regulators and to pay the related fees electronically. The EFD website also enables the public to search and view, free of charge, Form D filings made with state securities regulators through this new electronic filing feature. Virginia is among 38 states that have signed up to participate in EFD, which is available at: https://www.efdnasaa.orgExternal Link logo.

“We are pleased to participate in the EFD system, which improves transparency for investors and creates an efficient, uniform, and streamlined system for state Form D filing and payment requirements,” said Ron Thomas, director of the SCC’s Securities Division.

Rule 506 of Regulation D of the Securities Act of 1933 allows exemptions for certain private offerings and for public offerings to verified accredited investors. While issuers relying on the Rule 506 exemption do not have to register their offerings of securities with the Securities and Exchange Commission (SEC) or state securities regulators, they must file what is known as a “Form D” with the SEC and, in Virginia, the SCC’s Division of Securities and Retail Franchising. Form D contains limited information about the securities being offered and the issuer offering those securities.

The EFD system initially will be limited to Form D filings for Regulation D, Rule 506 offerings, but NASAA plans to expand the system to include additional state securities registration and notice filing materials, Thomas said. “States are embracing technology to provide innovative capital formation solutions that benefit issuers and investors alike,” he added.

The EFD system will be available 24 hours a day, seven days a week, unless the website is undergoing maintenance. Use of the EFD system by issuers is voluntary. Issuers who choose not to file through EFD may continue to make separate Form D filings with the SEC and the state(s) requiring it.

The EFD website offers a suite of tools to filers and regulators. In addition to the filing fees required by the states, there is a one-time $150 system use fee for each offering whose filings are made through EFD. This one-time system fee covers initial, amendment, and renewal filings made through EFD.

Thomas cautions Virginia investors that the filing of a Form D with the SEC and with the SCC’s Securities Division does not mean that the SEC or any state securities regulator has approved the securities or passed any judgment on the soundness of the securities as an investment. He encourages investors or issuers with questions about EFD or a particular offering to contact the SCC’s Division of Securities and Retail Franchising toll-free in Virginia at 1-800-552-7945 or in Richmond at (804) 371-9051 or e-mail the division at SRF_Registration@scc.virginia.gov. For additional information, visit the Securities Division’s website at www.scc.virginia.gov/srf or the the NASAA website at www.nasaa.org.