83 FR 52962 - Regulation Crowdfunding and Regulation A Relief and Assistance for Victims of Hurricane Michael
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 83, Issue 203 (October 19, 2018)
Federal Register Volume 83, Issue 203 (October 19, 2018)
| Page Range | 52962-52964 | |
| FR Document | 2018-22930 |
[Federal Register Volume 83, Number 203 (Friday, October 19, 2018)] [Rules and Regulations] [Pages 52962-52964] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-22930] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION 17 CFR Parts 227 and 230 [Release No. 33-10567] Regulation Crowdfunding and Regulation A Relief and Assistance for Victims of Hurricane Michael AGENCY: Securities and Exchange Commission. ACTION: Interim final temporary rule. ----------------------------------------------------------------------- SUMMARY: We are adopting interim final temporary rules for issuers subject to reporting obligations pursuant to Regulation Crowdfunding and Regulation A in order to address the needs of companies directly or indirectly affected by Hurricane Michael. The temporary rules extend the filing deadlines for specified reports and forms due pursuant to Regulation Crowdfunding and Regulation A for certain issuers. DATES: These rules are effective from October 19, 2018 through November 23, 2018, except that amendatory instruction 1 revising the authority citation of part 227 is effective October 19, 2018. FOR FURTHER INFORMATION CONTACT: Jennifer Zepralka, Office Chief, or Amy Reischauer, Special Counsel, Office of Small Business Policy, Division of Corporation Finance, at (202) 551-3460, U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-3628. SUPPLEMENTARY INFORMATION: We are adopting amendments to 17 CFR 227.202 (``Rule 202'') of Regulation Crowdfunding \1\ under the Securities Act of 1933 (the ``Securities Act'') \2\ and 17 CFR 230.257 (``Rule 257'') of Regulation A \3\ under the Securities Act as interim final temporary rules. --------------------------------------------------------------------------- \1\ 17 CFR 227 et seq. \2\ 15 U.S.C. 77a et seq. \3\ 17 CFR 230.251 through 230.263. --------------------------------------------------------------------------- I. Introduction On October 10, 2018, Hurricane Michael made landfall on the Florida Panhandle. The storm and subsequent flooding have displaced individuals and businesses and disrupted communications and transportation across the affected region. We are adopting these interim final temporary rules to address the needs of companies directly or indirectly affected by Hurricane Michael or its aftermath that are subject to reporting obligations pursuant to Regulation Crowdfunding or Regulation A. Section 28 of the Securities Act provides that the Commission may, by rule or regulation, ``conditionally or unconditionally exempt any person, security, or transaction, or any class or classes of persons, securities, or transactions, from any provision or provisions of this title or of any rule or regulation issued under this title, to the extent that such exemption is necessary or appropriate in the public interest, and is consistent with the protection of investors.'' \4\ --------------------------------------------------------------------------- \4\ 15 U.S.C. 77z-3. --------------------------------------------------------------------------- II. Temporary Relief From Filing Requirements for Issuers Subject to the Reporting Obligations of Regulation Crowdfunding or Regulation A The lack of communications, transportation, electricity, facilities, and available staff and professional advisors as a result of Hurricane Michael could hamper the efforts of companies with reporting obligations to meet their filing deadlines pursuant to Regulation Crowdfunding or Regulation A. At the same time, investors have an interest in the timely availability of required information about these companies. While the Commission believes that the temporary relief from filing requirements provided by the amendments to Rule 202 of Regulation Crowdfunding \5\ and Rule 257 of Regulation A \6\ is both necessary in the public interest and consistent with the protection of investors, we remind companies that are the subject of the relief provided in these interim final temporary rules to continue to evaluate their obligations to make materially accurate and complete disclosures in accordance with the anti-fraud provisions of the federal securities laws. --------------------------------------------------------------------------- \5\ See Rule 202(c) of Regulation Crowdfunding. 17 CFR 227.202(c). \6\ See Rule 257(f) of Regulation A. 17 CFR 230.257(f). --------------------------------------------------------------------------- Accordingly, pursuant to Section 28 of the Securities Act, we are adopting interim final temporary rules providing that an issuer subject to the reporting [[Page 52963]] requirements of either Regulation Crowdfunding or Regulation A is exempt from any requirement to file specified reports or forms with the Commission where the conditions below are satisfied: (a) The issuer is not able to meet a filing deadline due to Hurricane Michael or its aftermath; (b) The issuer files with the Commission, on or before November 23, 2018, the report or form required to be filed pursuant to either Regulation Crowdfunding or Regulation A during the period from and including October 10, 2018 to and including November 21, 2018; and (c) In any such report or form, the issuer discloses that it is relying on the interim final temporary rules and states the reasons why, in good faith, it could not file such report or form on a timely basis. For Regulation Crowdfunding, the relief includes annual reports on Form C-AR, progress updates on Form C-U, and termination of reporting on Form C-TR. For Regulation A, the relief includes post-qualification amendments required at least every 12 months after the qualification date to include updated financial statements, annual reports on Form 1- K, semi-annual reports on Form 1-SA, special financial reports on Forms 1-K or 1-SA, current reports on Form 1-U, and exit reports on Form 1-Z. III. Economic Analysis Regulation Crowdfunding and Regulation A permit offers and sales of securities without registration under the Securities Act, subject to certain limitations and conditions, including compliance with ongoing reporting requirements. Based on staff analysis, between June 19, 2015 (the effective date of the most recent Regulation A amendments \7\) and September 30, 2018, approximately 244 filers had Regulation A offering statements qualified by the Commission, excluding withdrawn offerings. Approximately 1,067 issuers initiated Regulation Crowdfunding offerings with Form C filings between May 16, 2016 and September 30, 2018, excluding issuers that have withdrawn offerings.\8\ Approximately 41 registered intermediaries, including 32 registered funding portals and 9 registered broker-dealers, have participated in Regulation Crowdfunding offerings with Form C filings between May 16, 2016 and September 30, 2018, excluding withdrawn offerings. --------------------------------------------------------------------------- \7\ SEC Rel. No. 33-9741 (Mar. 25, 2015) [80 FR 21806 (Apr. 20, 2015)]. \8\ These figures overstate the number of issuers with obligations to file annual reports under Regulation Crowdfunding, because they do not exclude issuers that have failed to raise the target amount or have exited the reporting regime. --------------------------------------------------------------------------- We lack the data to estimate the number of investors in Regulation A or Regulation Crowdfunding offerings that could be affected if issuers rely on the relief provided by the interim final temporary rules, because information on the number of investors is generally not required to be disclosed in periodic or current reports required under Regulation A or in periodic reports or progress updates required under Regulation Crowdfunding.\9\ --------------------------------------------------------------------------- \9\ Regulation A issuers that file Form 1-Z to suspend reporting are required to disclose the number of shareholders of record. --------------------------------------------------------------------------- We are mindful of the costs and benefits of the interim final temporary rules.\10\ We believe the interim final temporary rules will benefit issuers that have an obligation to file specified reports with the Commission pursuant to either Regulation Crowdfunding or Regulation A and have been adversely affected by Hurricane Michael or its aftermath by permitting them to take additional time to meet their reporting obligations. We expect the relief provided by the interim final temporary rules will benefit issuers that, absent the relief, would not be able to avail themselves of the exemption from registration under Regulation Crowdfunding or Regulation A because the timely filing of required reports is a condition to the exemptions. In the absence of this relief, issuers could incur prohibitively high costs in an attempt to meet filing deadlines given the lack of communications, transportation, electricity, facilities, and available staff and professional advisors. --------------------------------------------------------------------------- \10\ Section 2(b) of the Securities Act [15 U.S.C. 77b(b)] requires the Commission, when engaging in rulemaking where it is required to consider or determine whether an action is necessary or appropriate in the public interest, to consider, in addition to the protection of investors, whether the action will promote efficiency, competition, and capital formation. --------------------------------------------------------------------------- The requirement for an issuer to disclose that it is relying on Rule 202(c) of Regulation Crowdfunding or Rule 257(f) of Regulation A and to state the reasons why, in good faith, it could not file a report or form on a timely basis may impose minimal additional costs on issuers availing themselves of this relief. However, we believe that these minimal costs are justified in light of the significant negative implications of not being able to rely on the exemption and the prohibitively high costs an issuer may incur in attempting to file in a timely manner. We also acknowledge that there may be costs imposed on investors, intermediaries, and other market participants due to delayed access to information about offerings conducted in reliance on Regulation A and Regulation Crowdfunding. Generally, reporting requirements strengthen investor protection and decrease the extent of information asymmetries between issuers and investors. Ongoing reporting provides investors with periodically updated information, allowing them to assess investment opportunities based on the information provided and their level of risk tolerance, resulting in better informed investment decisions and improved allocative efficiency. Given that the interim final temporary rules allow for delayed reporting for a limited time period and only under specified conditions, we do not believe such costs will be significant. The interim final temporary rules will not substantially affect competition or capital formation. We acknowledge the possibility that the interim final temporary rules may have a minor impact on efficiency. On the one hand, as noted above, the delay in reporting could marginally affect allocative efficiency to the extent that it allows information asymmetries between investors and issuers to persist for the length of time of the delay. On the other hand, we expect efficiency gains to the extent that the interim final temporary rules allow issuers to continue to rely on either of the exemptions from registration that would not be available if one of the required reports that is a condition to the exemptions was not filed in a timely manner, or to the extent the issuers are able to avoid paying a premium to service providers in an attempt to file in a timely manner by delaying reporting during the specified relief period. As an alternative to the relief specified in the interim final temporary rules, we could have considered a longer or shorter relief period. While a shorter period would have reduced the costs to investors of asymmetric information, it would also reduce the benefits of the interim final temporary rules to issuers. Similarly, a longer period would increase the costs to investors. We believe that the approximately six-week delay in the interim final temporary rules is appropriate given the potential impact Hurricane Michael or its aftermath could have on the efforts of companies to meet filing deadlines pursuant to Regulation Crowdfunding and Regulation A. IV. Procedural and Other Matters The Administrative Procedure Act (``APA'') generally requires an agency to [[Page 52964]] publish notice of a rulemaking in the Federal Register and provide an opportunity for public comment. This requirement does not apply, however, if the agency ``for good cause finds . . . that notice and public procedure are impracticable, unnecessary, or contrary to the public interest.'' \11\ The APA also generally requires that an agency publish an adopted rule in the Federal Register at least 30 days before it becomes effective. This requirement does not apply, however, if the agency finds good cause for making the rule effective sooner.\12\ --------------------------------------------------------------------------- \11\ 5 U.S.C. 553(b)(3)(B). \12\ 5 U.S.C. 553(d)(3). --------------------------------------------------------------------------- Given the temporary nature of the relief contemplated by the interim final temporary rules and the significant and immediate impact of Hurricane Michael and its aftermath on issuers in affected areas, as discussed above, the Commission finds that good cause exists to dispense with notice and comment as impracticable and unnecessary, and to act immediately to amend Rule 202 of Regulation Crowdfunding and Rule 257 of Regulation A.\13\ Further, the interim final temporary rules will not affect the burden or cost estimates associated with existing collections of information under Regulation Crowdfunding and Regulation A for purposes of the Paperwork Reduction Act of 1995.\14\ --------------------------------------------------------------------------- \13\ This finding also satisfies the requirements of 5 U.S.C. 808(2), allowing the interim final temporary rules to become effective notwithstanding the requirement of 5 U.S.C. 801 (if a federal agency finds that notice and public comment are impractical, unnecessary or contrary to the public interest, a rule shall take effect at such time as the federal agency promulgating the rule determines). The interim final temporary rules also do not require analysis under the Regulatory Flexibility Act. See 5 U.S.C. 604(a) (requiring a final regulatory flexibility analysis only for rules required by the APA or other law to undergo notice and comment). \14\ 44 U.S.C. 3501 et seq. --------------------------------------------------------------------------- V. Statutory Basis and Text of Amendments We are adopting amendments to Rule 202 of Regulation Crowdfunding and Rule 257 of Regulation A under the authority set forth in the Securities Act (15 U.S.C. 77a et seq.), particularly, Section 28 thereof. List of Subjects 17 CFR Part 227 Crowdfunding, Funding portals, Intermediaries, Reporting and recordkeeping requirements, Securities. 17 CFR Part 230 Reporting and recordkeeping requirements, Securities. In accordance with the foregoing, title 17, chapter II of the Code of Federal Regulations is amended as follows: PART 227--REGULATION CROWDFUNDING, GENERAL RULES AND REGULATIONS 0 1. The authority citation for part 227 is revised 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. 227.202 by adding paragraph (d) to read as follows: Sec. 227.202 Ongoing reporting requirements. * * * * * (d) Temporary relief from certain reporting requirements. (1) An issuer that is not able to meet a filing deadline for any report or form required to be filed by this section, 17 CFR 227.203(a)(3)), or 17 CFR 227.203(b) during the period from and including October 10, 2018 to and including November 21, 2018 due to Hurricane Michael and its aftermath shall be deemed to have satisfied the filing deadline for such report or form if the issuer files such report or form with the Commission on or before November 23, 2018. (2) In any report or form filed pursuant to paragraph (d)(1) of this section, the issuer must disclose that it is relying on this paragraph (d) and state the reasons why, in good faith, it could not file such report or form on a timely basis. PART 230--GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933 0 3. 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, sec. 201(a), sec. 401, 126 Stat. 313 (2012), unless otherwise noted. * * * * * 0 4. Amend Sec. 230.257 by adding paragraph (g) to read as follows: Sec. 230.257 Periodic and current reporting; exit report. (g) Temporary relief from ongoing reporting requirements. (1) An issuer that is not able to meet a filing deadline for any report or form required to be filed by 17 CFR 230.252(f)(2)(i) or this section during the period from and including October 10, 2018 to and including November 21, 2018 due to Hurricane Michael and its aftermath shall be deemed to have satisfied the filing deadline for such report or form if the issuer files such report or form with the Commission on or before November 23, 2018. (2) In any report or form filed pursuant to paragraph (g)(1) of this section, the issuer must disclose that it is relying on this paragraph (g) and state the reasons why, in good faith, it could not file such report or form on a timely basis. By the Commission. Dated: October 16, 2018. Brent J. Fields, Secretary. [FR Doc. 2018-22930 Filed 10-17-18; 4:15 pm] BILLING CODE 8011-01-P
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holidays, submit to the responsible 463930N 0372518E–464700N I. Introduction
Flight Standards office a complete 0373000E– On October 10, 2018, Hurricane
report of the operations of the aircraft 465900N 0382000E–470642N Michael made landfall on the Florida
involved in the deviation, including a 0381324E– Panhandle. The storm and subsequent
description of the deviation and the then along state boundary until point/– flooding have displaced individuals and
reasons for it. 511400N 0342700. businesses and disrupted
(e) Expiration. This SFAR will remain Issued in Washington, DC, under the communications and transportation
in effect until October 27, 2020. The authority of 49 U.S.C. 106(f) and (g), across the affected region. We are
FAA may amend, rescind, or extend this 40101(d)(1), 40105(b)(1)(A), and 44701(a)(5), adopting these interim final temporary
SFAR as necessary. on October 15, 2018. rules to address the needs of companies
(f) Definitions. (1) The Simferopol FIR Daniel K. Elwell, directly or indirectly affected by
(UKFV) is defined as that airspace from Acting Administrator. Hurricane Michael or its aftermath that
the surface to unlimited within the [FR Doc. 2018–22853 Filed 10–18–18; 8:45 am] are subject to reporting obligations
following lateral limits: pursuant to Regulation Crowdfunding or
BILLING CODE 4910–13–P
465800N 0360000E–463500N Regulation A.
0364200E– Section 28 of the Securities Act
463424N 0372206E–452700N SECURITIES AND EXCHANGE provides that the Commission may, by
0364100E– COMMISSION rule or regulation, ‘‘conditionally or
452242N 0364100E–451824N unconditionally exempt any person,
0363524E– 17 CFR Parts 227 and 230 security, or transaction, or any class or
451442N 0363542E–451218N classes of persons, securities, or
0363200E– [Release No. 33–10567]
transactions, from any provision or
450418N 0363418E–445612N provisions of this title or of any rule or
Regulation Crowdfunding and
0363636E– regulation issued under this title, to the
Regulation A Relief and Assistance for
443100N 0364000E–424400N extent that such exemption is necessary
Victims of Hurricane Michael
0361600E– or appropriate in the public interest,
424700N 0340000E–424800N AGENCY: Securities and Exchange and is consistent with the protection of
0320000E– Commission. investors.’’ 4
424800N 0310000E–424800N ACTION: Interim final temporary rule.
0304500E– II. Temporary Relief From Filing
434100N 0303200E–441000N SUMMARY: We are adopting interim final Requirements for Issuers Subject to the
0302512E– temporary rules for issuers subject to Reporting Obligations of Regulation
441500N 0302400E–444600N reporting obligations pursuant to Crowdfunding or Regulation A
0300900E– Regulation Crowdfunding and The lack of communications,
445447N 0300448E–445230N Regulation A in order to address the transportation, electricity, facilities, and
0302130E– needs of companies directly or available staff and professional advisors
445848N 0303342E–451530N indirectly affected by Hurricane as a result of Hurricane Michael could
0310642E– Michael. The temporary rules extend hamper the efforts of companies with
452436N 0312500E–453828N the filing deadlines for specified reports reporting obligations to meet their filing
0315311E– and forms due pursuant to Regulation deadlines pursuant to Regulation
454436N 0320548E–455442N Crowdfunding and Regulation A for Crowdfunding or Regulation A. At the
0322700E– certain issuers.
460730N 0325430E–464600N same time, investors have an interest in
0325300E– DATES: These rules are effective from the timely availability of required
474400N 0330300E–472700N October 19, 2018 through November 23, information about these companies.
0344800E– 2018, except that amendatory While the Commission believes that the
470630N 0355500E–465800N 0360000E instruction 1 revising the authority temporary relief from filing
citation of part 227 is effective October requirements provided by the
(2) The Dnipropetrovsk FIR (UKDV) is
19, 2018. amendments to Rule 202 of Regulation
defined as that airspace from the surface
FOR FURTHER INFORMATION CONTACT: Crowdfunding 5 and Rule 257 of
to unlimited within the following lateral
Jennifer Zepralka, Office Chief, or Amy Regulation A 6 is both necessary in the
limits:
Reischauer, Special Counsel, Office of public interest and consistent with the
511400N 0342700E–504942N protection of investors, we remind
0341300E– Small Business Policy, Division of
Corporation Finance, at (202) 551–3460, companies that are the subject of the
502043N 0335720E–501246N relief provided in these interim final
0335307E– U.S. Securities and Exchange
Commission, 100 F Street NE, temporary rules to continue to evaluate
491848N 0333700E–485700N
Washington, DC 20549–3628. their obligations to make materially
0332200E–
accurate and complete disclosures in
484118N 0324431E–483620N SUPPLEMENTARY INFORMATION: We are
accordance with the anti-fraud
0324010E– adopting amendments to 17 CFR
483128N 0323605E–482300N provisions of the federal securities laws.
227.202 (‘‘Rule 202’’) of Regulation Accordingly, pursuant to Section 28
0323900E– Crowdfunding 1 under the Securities of the Securities Act, we are adopting
480730N 0325324E–474600N Act of 1933 (the ‘‘Securities Act’’) 2 and interim final temporary rules providing
0325000E–
amozie on DSK3GDR082PROD with RULES
17 CFR 230.257 (‘‘Rule 257’’) of that an issuer subject to the reporting
474400N 0330300E–472700N Regulation A 3 under the Securities Act
0344800E– as interim final temporary rules. 4 15 U.S.C. 77z–3.
470630N 0355500E–465800N 5 See Rule 202(c) of Regulation Crowdfunding. 17
0360000E– 1 17 CFR 227 et seq. CFR 227.202(c).
463500N 0364200E–463424N 2 15 U.S.C. 77a et seq. 6 See Rule 257(f) of Regulation A. 17 CFR
0372206E– 3 17 CFR 230.251 through 230.263. 230.257(f).
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requirements of either Regulation filings between May 16, 2016 and participants due to delayed access to
Crowdfunding or Regulation A is September 30, 2018, excluding information about offerings conducted
exempt from any requirement to file withdrawn offerings. in reliance on Regulation A and
specified reports or forms with the We lack the data to estimate the Regulation Crowdfunding. Generally,
Commission where the conditions number of investors in Regulation A or reporting requirements strengthen
below are satisfied: Regulation Crowdfunding offerings that investor protection and decrease the
(a) The issuer is not able to meet a could be affected if issuers rely on the extent of information asymmetries
filing deadline due to Hurricane relief provided by the interim final between issuers and investors. Ongoing
Michael or its aftermath; temporary rules, because information on reporting provides investors with
(b) The issuer files with the the number of investors is generally not periodically updated information,
Commission, on or before November 23, required to be disclosed in periodic or allowing them to assess investment
2018, the report or form required to be current reports required under opportunities based on the information
filed pursuant to either Regulation Regulation A or in periodic reports or provided and their level of risk
Crowdfunding or Regulation A during progress updates required under tolerance, resulting in better informed
the period from and including October Regulation Crowdfunding.9 investment decisions and improved
10, 2018 to and including November 21, We are mindful of the costs and allocative efficiency. Given that the
2018; and benefits of the interim final temporary interim final temporary rules allow for
(c) In any such report or form, the rules.10 We believe the interim final delayed reporting for a limited time
issuer discloses that it is relying on the temporary rules will benefit issuers that period and only under specified
interim final temporary rules and states have an obligation to file specified conditions, we do not believe such costs
the reasons why, in good faith, it could reports with the Commission pursuant will be significant.
not file such report or form on a timely to either Regulation Crowdfunding or The interim final temporary rules will
basis. Regulation A and have been adversely not substantially affect competition or
For Regulation Crowdfunding, the affected by Hurricane Michael or its capital formation. We acknowledge the
relief includes annual reports on Form aftermath by permitting them to take possibility that the interim final
C–AR, progress updates on Form C–U, additional time to meet their reporting temporary rules may have a minor
and termination of reporting on Form obligations. We expect the relief impact on efficiency. On the one hand,
C–TR. For Regulation A, the relief provided by the interim final temporary as noted above, the delay in reporting
includes post-qualification amendments rules will benefit issuers that, absent the could marginally affect allocative
required at least every 12 months after relief, would not be able to avail efficiency to the extent that it allows
the qualification date to include themselves of the exemption from information asymmetries between
updated financial statements, annual registration under Regulation investors and issuers to persist for the
reports on Form 1–K, semi-annual Crowdfunding or Regulation A because length of time of the delay. On the other
reports on Form 1–SA, special financial the timely filing of required reports is a hand, we expect efficiency gains to the
reports on Forms 1–K or 1–SA, current condition to the exemptions. In the extent that the interim final temporary
reports on Form 1–U, and exit reports absence of this relief, issuers could rules allow issuers to continue to rely
on Form 1–Z. incur prohibitively high costs in an on either of the exemptions from
attempt to meet filing deadlines given registration that would not be available
III. Economic Analysis
the lack of communications, if one of the required reports that is a
Regulation Crowdfunding and transportation, electricity, facilities, and condition to the exemptions was not
Regulation A permit offers and sales of available staff and professional advisors. filed in a timely manner, or to the extent
securities without registration under the The requirement for an issuer to the issuers are able to avoid paying a
Securities Act, subject to certain disclose that it is relying on Rule 202(c) premium to service providers in an
limitations and conditions, including of Regulation Crowdfunding or Rule attempt to file in a timely manner by
compliance with ongoing reporting 257(f) of Regulation A and to state the delaying reporting during the specified
requirements. Based on staff analysis, reasons why, in good faith, it could not relief period.
between June 19, 2015 (the effective file a report or form on a timely basis As an alternative to the relief
date of the most recent Regulation A may impose minimal additional costs specified in the interim final temporary
amendments 7) and September 30, 2018, on issuers availing themselves of this rules, we could have considered a
approximately 244 filers had Regulation relief. However, we believe that these longer or shorter relief period. While a
A offering statements qualified by the minimal costs are justified in light of the shorter period would have reduced the
Commission, excluding withdrawn significant negative implications of not costs to investors of asymmetric
offerings. Approximately 1,067 issuers being able to rely on the exemption and information, it would also reduce the
initiated Regulation Crowdfunding the prohibitively high costs an issuer benefits of the interim final temporary
offerings with Form C filings between may incur in attempting to file in a rules to issuers. Similarly, a longer
May 16, 2016 and September 30, 2018, timely manner. period would increase the costs to
excluding issuers that have withdrawn We also acknowledge that there may investors. We believe that the
offerings.8 Approximately 41 registered be costs imposed on investors, approximately six-week delay in the
intermediaries, including 32 registered intermediaries, and other market interim final temporary rules is
funding portals and 9 registered broker- appropriate given the potential impact
9 Regulation A issuers that file Form 1–Z to
dealers, have participated in Regulation Hurricane Michael or its aftermath
suspend reporting are required to disclose the
Crowdfunding offerings with Form C number of shareholders of record. could have on the efforts of companies
amozie on DSK3GDR082PROD with RULES
10 Section 2(b) of the Securities Act [15 U.S.C. to meet filing deadlines pursuant to
7 SEC Rel. No. 33–9741 (Mar. 25, 2015) [80 FR
77b(b)] requires the Commission, when engaging in Regulation Crowdfunding and
21806 (Apr. 20, 2015)]. rulemaking where it is required to consider or Regulation A.
8 These figures overstate the number of issuers determine whether an action is necessary or
with obligations to file annual reports under appropriate in the public interest, to consider, in IV. Procedural and Other Matters
Regulation Crowdfunding, because they do not addition to the protection of investors, whether the
exclude issuers that have failed to raise the target action will promote efficiency, competition, and The Administrative Procedure Act
amount or have exited the reporting regime. capital formation. (‘‘APA’’) generally requires an agency to
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![52964 Federal Register / Vol. 83, No. 203 / Friday, October 19, 2018 / Rules and Regulations
publish notice of a rulemaking in the In accordance with the foregoing, title shall be deemed to have satisfied the
Federal Register and provide an 17, chapter II of the Code of Federal filing deadline for such report or form
opportunity for public comment. This Regulations is amended as follows: if the issuer files such report or form
requirement does not apply, however, if with the Commission on or before
the agency ‘‘for good cause finds . . . PART 227—REGULATION November 23, 2018.
that notice and public procedure are CROWDFUNDING, GENERAL RULES (2) In any report or form filed
impracticable, unnecessary, or contrary AND REGULATIONS pursuant to paragraph (g)(1) of this
to the public interest.’’ 11 The APA also section, the issuer must disclose that it
generally requires that an agency ■ 1. The authority citation for part 227 is relying on this paragraph (g) and state
publish an adopted rule in the Federal is revised to read as follows: the reasons why, in good faith, it could
Register at least 30 days before it Authority: 15 U.S.C. 77d, 77d–1, 77s, 77z– not file such report or form on a timely
becomes effective. This requirement 3, 78c, 78o, 78q, 78w, 78mm, and Pub. L. basis.
does not apply, however, if the agency 112–106, secs. 301–305, 126 Stat. 306 (2012).
By the Commission.
finds good cause for making the rule ■ 2. Amend § 227.202 by adding Dated: October 16, 2018.
effective sooner.12 paragraph (d) to read as follows: Brent J. Fields,
Given the temporary nature of the Secretary.
relief contemplated by the interim final § 227.202 Ongoing reporting requirements.
* * * * * [FR Doc. 2018–22930 Filed 10–17–18; 4:15 pm]
temporary rules and the significant and
immediate impact of Hurricane Michael (d) Temporary relief from certain BILLING CODE 8011–01–P
and its aftermath on issuers in affected reporting requirements. (1) An issuer
areas, as discussed above, the that is not able to meet a filing deadline
Commission finds that good cause exists for any report or form required to be DEPARTMENT OF HEALTH AND
to dispense with notice and comment as filed by this section, 17 CFR HUMAN SERVICES
impracticable and unnecessary, and to 227.203(a)(3)), or 17 CFR 227.203(b)
act immediately to amend Rule 202 of during the period from and including Food and Drug Administration
Regulation Crowdfunding and Rule 257 October 10, 2018 to and including
of Regulation A.13 Further, the interim November 21, 2018 due to Hurricane 21 CFR Part 868
final temporary rules will not affect the Michael and its aftermath shall be
burden or cost estimates associated with deemed to have satisfied the filing [Docket No. FDA–2018–N–3684]
existing collections of information deadline for such report or form if the
under Regulation Crowdfunding and issuer files such report or form with the Medical Devices; Anesthesiology
Regulation A for purposes of the Commission on or before November 23, Devices; Classification of the Positive
Paperwork Reduction Act of 1995.14 2018. Airway Pressure Delivery System
(2) In any report or form filed
V. Statutory Basis and Text of pursuant to paragraph (d)(1) of this AGENCY: Food and Drug Administration,
Amendments section, the issuer must disclose that it HHS.
is relying on this paragraph (d) and state ACTION: Final order.
We are adopting amendments to Rule
202 of Regulation Crowdfunding and the reasons why, in good faith, it could
SUMMARY: The Food and Drug
Rule 257 of Regulation A under the not file such report or form on a timely
Administration (FDA or we) is
authority set forth in the Securities Act basis.
classifying the positive airway pressure
(15 U.S.C. 77a et seq.), particularly, PART 230—GENERAL RULES AND delivery system into class II (special
Section 28 thereof. REGULATIONS, SECURITIES ACT OF controls). The special controls that
List of Subjects 1933 apply to the device type are identified
in this order and will be part of the
17 CFR Part 227 ■ 3. The authority citation for part 230 codified language for the positive
continues to read in part as follows: airway pressure delivery system’s
Crowdfunding, Funding portals,
Authority: 15 U.S.C. 77b, 77b note, 77c, classification. We are taking this action
Intermediaries, Reporting and
77d, 77f, 77g, 77h, 77j, 77r, 77s, 77z–3, 77sss, because we have determined that
recordkeeping requirements, Securities.
78c, 78d, 78j, 78l, 78m, 78n, 78o, 78o–7 note, classifying the device into class II
17 CFR Part 230 78t, 78w, 78ll(d), 78mm, 80a–8, 80a–24, 80a– (special controls) will provide a
28, 80a–29, 80a–30, and 80a–37, and Pub. L. reasonable assurance of safety and
Reporting and recordkeeping 112–106, sec. 201(a), sec. 401, 126 Stat. 313 effectiveness of the device. We believe
requirements, Securities. (2012), unless otherwise noted. this action will also enhance patients’
* * * * * access to beneficial innovative devices,
11 5 U.S.C. 553(b)(3)(B).
12 5
■ 4. Amend § 230.257 by adding in part by reducing regulatory burdens.
U.S.C. 553(d)(3).
13 This finding also satisfies the requirements of paragraph (g) to read as follows: DATES: This order is effective October
5 U.S.C. 808(2), allowing the interim final 19, 2018. The classification was
§ 230.257 Periodic and current reporting;
temporary rules to become effective
exit report.
applicable on June 5, 2018.
notwithstanding the requirement of 5 U.S.C. 801 (if
FOR FURTHER INFORMATION CONTACT:
a federal agency finds that notice and public (g) Temporary relief from ongoing
comment are impractical, unnecessary or contrary reporting requirements. (1) An issuer Deepika Arora Lakhani, Center for
to the public interest, a rule shall take effect at such
that is not able to meet a filing deadline Devices and Radiological Health, Food
amozie on DSK3GDR082PROD with RULES
time as the federal agency promulgating the rule and Drug Administration, 10903 New
determines). The interim final temporary rules also for any report or form required to be
do not require analysis under the Regulatory filed by 17 CFR 230.252(f)(2)(i) or this Hampshire Ave., Bldg. 66, Rm. 2543,
Flexibility Act. See 5 U.S.C. 604(a) (requiring a final section during the period from and Silver Spring, MD 20993–0002, 301–
regulatory flexibility analysis only for rules
including October 10, 2018 to and 796–4042, Deepika.Lakhani@
required by the APA or other law to undergo notice fda.hhs.gov.
and comment). including November 21, 2018 due to
14 44 U.S.C. 3501 et seq. Hurricane Michael and its aftermath SUPPLEMENTARY INFORMATION:
VerDate Sep<11>2014 16:11 Oct 18, 2018 Jkt 247001 PO 00000 Frm 00022 Fmt 4700 Sfmt 4700 E:\FR\FM\19OCR1.SGM 19OCR1](https://thefederalregister.org/doc/83_FR_53165/page/3.svg)
Document Created: 2018-10-19 01:25:24
Document Modified: 2018-10-19 01:25:24
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Rules and Regulations | |
| Action | Interim final temporary rule. | |
| Dates | These rules are effective from October 19, 2018 through November 23, 2018, except that amendatory instruction 1 revising the authority citation of part 227 is effective October 19, 2018. | |
| Contact | Jennifer Zepralka, Office Chief, or Amy Reischauer, Special Counsel, Office of Small Business Policy, Division of Corporation Finance, at (202) 551-3460, U.S. Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-3628. | |
| FR Citation | 83 FR 52962 | |
| CFR Citation | 17
CFR
227 17 CFR 230 |
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