December 15, 2014 – The Office of the Kansas Securities Commissioner (KSC) today announced the launch of the online Electronic Filing Depository (EFD), designed to enhance the efficiency of the regulatory filing process for certain exempt securities offerings.
Developed by the North American Securities Administrators Association (NASAA), of which Kansas is a member, EFD is an online system that allows an issuer to submit a Form D for a Regulation D, Rule 506 offering to state securities regulators and pay related fees. The EFD website also enables the public to search and view, free of charge, Form D filings made with state securities regulators through EFD.
“We are very pleased to provide the EFD system to create an efficient, streamlined system for state Form D filing requirements. Issuers will benefit from this uniform and effective regulatory tool, which also strengthens investor protection by improving the transparency of Form D filings,” said Commissioner Josh Ney.
Rule 506 of Regulation D is a “safe harbor” for the private offering exemption of Section 4(a)(2) of the Securities Act and also provides an exemption for public offerings to verified accredited investors. Issuers relying on the Rule 506 exemption do not have to register their offerings of securities with the SEC or the KSC, but they must file what is known as a “Form D” with the SEC and the KSC. Form D contains limited information about the securities being offered and the issuer offering those securities.
Commissioner Ney said the EFD system initially will be limited to Form D filings for Regulation D, Rule 506 offerings, but added that NASAA expects the filing system will be expanded to include additional state securities registration and notice filing materials.
“By embracing technology, states are providing innovative capital formation solutions to benefit issuers and investors alike,” Ney said.
The EFD website offers a suite of tools to filers and regulators. The EFD system will be available 24 hours a day, seven days a week, unless the website is undergoing maintenance. In addition to the filing fees required by the states, there is a one-time $150 system use fee for each offering making its filings through EFD. This one-time system fee covers initial, amendment and renewal filings made through EFD.
Use of the EFD system by Kansas issuers is voluntary and paper filings will continue to be accepted. Additional information is available on the KSC webpage for Rule 506 offerings.
Commissioner Ney also noted that the filing of a Form D with the SEC and with the KSC does not mean that the SEC or any state securities regulator has approved the securities or passed judgment on the soundness of the securities as an investment.
“If you have questions about a particular offering, you should contact the Office of the Kansas Securities Commissioner,” Ney said. Issuers or investors with questions about EFD can contact Kathy Bock at 785-296-2124.