Small Corporate Offering Registration (SCOR)
Small Corporate Offering Registration (SCOR) is a new type of corporate offering registration system that enables companies to register the listing and disclosure of their securities in accordance with SEC Rule 12g-3. The SCOR is a significantly more efficient process for small companies, as it allows them to trade securities through a "registration portal" on the agency's website. The site will provide issuers with an email address and password for completing the enrolment process.
Using this portal, issuers may electronically file their registration statement with the SEC on its EDGAR database or upload any required documents into an online filing cabinet. Once the registration statement has been accepted, any company that is required to file reports under Section 13 or 15(d) of the Exchange Act (the "Reporting Companies") will be able to use the portal to file its periodic and event-based reports electronically.
The portal will provide additional benefits in terms of accessibility, efficiency and timeliness. Issuers can use existing word processing software to draft their registration statements and then upload them into the portal. Subsequently, they can download online EDGAR filing documents directly from the "filing cabinet" section of the website for electronic filing in a format that is compatible with EDGAR. The SCOR is based on the model that was previously used to file annual and quarterly reports with the SEC.
The new electronic filing system will begin operation on January 15, 2014 and will be available for all Reporting Companies. Some companies with more than $25 million in revenue may elect to use the SCOR in lieu of the Paperwork Reduction Act ("PRA") submission process which involves filing a notice of exemption with the SEC. The deadline for this process is October 15, 2013. Only those filing companies that wish to use the SCOR will only have a thirty (30) day window before applying for an exemption under PRA.
SCOR is not available to foreign private issuers, investment companies, asset-backed issuers and certain other issuers. Companies with annual revenues of €10m are eligible to use SCOR. In order to be eligible for SCOR, the issuer must have been formed in the US and have a clean history of securities fraud and no outstanding fines or penalties against the company itself or its officers.
The new filing system will be administered by the SEC's Division of Corporation Finance and will only be in existence until June 30, 2014 after which time a company will only have the choice between PRA filings or EDGAR filings. Both options will require the company to file an offering memorandum. In order to qualify for the SCOR, issuers must have been formed in the US.
Companies that choose to register using SCOR will be required to file their initial registration statement within 45 days of filing with EDGAR (and may elect to resubmit their annual report within 60 days of filing). Before January 15, 2014, companies that use SCOR must choose between EDGAR filings or PRA filings. PRA filings must be submitted within 90 days of filing and are one step removed from filing with EDGAR. Both options require a Form D to be filed.
SEC rules applicable to this registration include:
The SEC has prepared for this new form of registration a model SEC-approved question and answer (FAQ) document. This will provide issuers with answers to questions regarding the SCOR, which includes:
The SCOR is not yet available to international applicants. However, foreign companies that are part of an international pooling system can apply for an exemption under PRA. The PRA will enable foreign companies that are part of these systems to submit their latest SEC filings in an electronic format so that they do not need a US presence.
The online portal is available at http://www.sec.gov/edgar/searchedgar/webusers.htm#formscor
SEC support of SCOR http://www.sec.gov/divisions/corpfin/smallbusissues/regspap12g-3.html#registration
http://www.sec.gov/news/press2013/2013-186.htm
http://www.sec.gov/news/press2013/2013-185.htm
http://www1.law360. com/articles/557848/small-corporate-offeringsubmission-expanded.
http://www1.law360.com/articles/555784/sec.sues.for-fraudulent-securities-offeringsubmissions?page=0,0
http://www1.law360.com/articles/555758/superior_court_issues_restrictive_injunctionregardinganissuerspendingfraudulentlysentinemail
http://www1.law360 .com/articles/555785/sec.sues.onfraudulent.securitiesofferingsubmissions?page=0,0
http://www1.law360.com/articles/555786/secsuescompanyinoverchargingissuersforanalyststimeandfees
http://www1.law360.com/articles/555787/-superior_court_ordersquotinganissuersunsubstantiatedandmisleadingmarketingpromotionforscoring-in-capital-raise?page=0,0
http://www1.law360.com/articles/555779/sec.sues.onfraudulent.securitiesofferingsubmissions?page=0,0
http://www1.law360 .com/articles/555901/secsuesglobeandmailonfraudulentreportingsubmission
http://www1.law360 .com/articles/555902/-federal-court-issues.restrictiveinjunctionasthesecchargesanissuerwithfalseadvertising,marketmanipulationandaccounting-deficiencies
http://www1.law360 .
Conclusion:
It seems that the SCOR will be more of a beneficial resource for smaller growth companies, as it enables the company to have a registered SEC company whose sole purpose is to file the periodic reports with the SEC on their behalf. The SCOR registration provides companies with a number of advantages including:
The Small Company Reporting Regulations enable smaller reporting companies to self-report financial information with the Securities and Exchange Commission ("SEC") through an online filing system called an S-COR. On May 12, 2013, SEC approved rules that establish requirements for use of this online registration filing system...