Developments in Securities Regulation, Corporate Governance, Capital Markets, M&A and Other Topics of Interest. MORE

On December 15, 2014, the North American Securities Administrators Association, Inc. (NASAA) unveiled its Electronic Filing Depository (EFD) for use in connection with state Form D filings in Rule 506 offerings.  The NASAA has been pursuing initiatives to streamline the state blue sky filing process for some time. In July of 2014, we reported on the NASAA’s proposed model rules that could be enacted by states to require electronic filings in connection with Rule 506 offerings. The EFD system dovetails with that initiative. While the availability of the EFD is an interesting and welcome development, there are a few important limitations to note:

  • Limited to Form D Filings. Although it is anticipated that additional state notice filings will be possible in the future, for now the EFD’s functionality is limited to filing a Form D and paying a filing fee in connection with a Rule 506 offering. If a state’s applicable statutes or regulations require any additional filings or information in connection with Rule 506 notice filings (such as a separate consent to service of process or supplemental information about securities sold within the state), that information will still need to be provided directly to the state.  
  • Not All States Are Participating. Currently, 37 states plus the District of Columbia, Puerto Rico, and the U.S. Virgin Islands are accepting Form D filings through EFD. States that want to accept filings through EFD have to opt in by whatever means the applicable state securities administrators feel is necessary. That may involve adopting new rules or legislation. As noted above, the NASAA has developed model rules to assist states in this regard. Minnesota is not among the states that are currently accepting filings through EFD.
  • Interaction with Other Systems. Over the past few years, several states have invested in their own online platforms for facilitating securities filings. California’s Self-Service DOCQNET Portal, administered by the California Department of Business Oversight, comes to mind. DOCQNET currently allows for several types of state notice filings. California is not one of the states that currently accepts EFD filings. States that have invested in their own systems will have to make decisions about whether to continue developing those systems or whether to rely on EFD going forward.

While the launch of EFD is subject to several limitations, nevertheless its development and launch is a positive step towards streamlining state notice filings in connection with Regulation D offerings.


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