below. It also discussed the possibility of changes to the definition of “accredited investor” that would not be tied to an investor’s net worth but could involve other standards such as permitting individuals with certain professional credentials, or individuals who passed an accredited investor examination, to qualify as accredited investors. On November 2nd, 2020, the Securities and Exchange Commission published a final rule implementing many of the concepts of the June 29th release. Those final rule changes are reflected in the following material. A rule adopted August 26th, 2020, keeps in place the current assets and income limits for an “accredited investor”: net worth exceeding $1 million jointly or with spouse and not including the primary residence, or income exceeding $200,000 ($300,000 with spouse) in each of the last two years with reasonable expectation of the same level of income in the current year. That new rule did add to the definition individuals holding certain securities licenses: Series 7 (licensed general securities representative; Series 65 (licensed investment advisor representative), and Series 82 (licensed private securities offerings representative). Registered Offerings Under 2015 Regulation A Plus The JOBS Act of 2012 raised the limit for offerings of securities under Regulation A from $5 million to $50 million. In March 2015 the Securities and Exchange Commission adopted rules now known as Regulation A Plus to address what was seen as an impediment to the expanded use of Regulation A; that is the requirement that issuers had to register with both federal regulators and state regulators in every state where the securities would be sold. Regulation A Plus creates two tiers of offerings: Tier 1 with offerings up to $20 million in a 12 month period, and Tier 2 with offerings up to $75 million in a 12 month period. The rule preempts state regulation for Tier 2 offerings but keeps in place coordinated review by both federal and state regulators for Tier 1 offerings. The 2024 Minnesota Legislature amended Minn. Stat. 80A to require that an issuer relying on Regulation A Tier 2 to conduct an offering in Minnesota must file a notice of offering with the Minnesota Department of Commerce [Minn. Stat § 80A.50 (50)(a)]. That notice must contain a copy of the Reg A Tier 2 offering filing and the documents filled with the SEC as well as a consent to service of process if such consent was not included in the Tier 2 offering filing. The notice must be made at least 21 days before the initial sale of securities. It is effective for one year and renewable. Regulation A Plus has several other substantial elements: • No limit on investors. Offerings may be made to both accredited and non-accredited investors subject to the investment limits noted below. • Investment limits. There are no limits to how much any investor may invest in a Tier 1 offering. In a Tier 2 offering investors may invest a maximum of the greater of 10 percent of their net worth or 10 percent of their net income. • Investors can self-certify income or net worth. No documentation is required. • "Testing the waters" permitted before filing offering statement for Tier 1 offerings.
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