Understanding Securities Law
The business professional's guide to securities laws
 

In practice, Reg. A and SCOR Offerings are rarely used.

There are a variety of reasons:

• Neither makes you an SEC Reporting Company. You are not eligible to obtain a qualification for your securities to trade on the OTCBB.
• There is no coordination between federal and state law or between the laws of the various states with respect to these offerings.
  
  
  • The states have not adopted versions of Regulation A.
  • The SEC has not adopted SCOR.
  • Each state has a different version of their law concerning these types of offerings.
  • Many states apply merit review to these offerings or review them in a different manner.

Companies and their advisors have determined that if a company is going to go through the registration process and prepare, file and clear a filing with the SEC, particularly if the company wants its stock to trade on the OTCBB, an S-1 registration statement is a better alternative than Regulation A.

Companies and their advisors have determined that if a company is going to do a private placement and prepare a fully compliant offering memorandum, particularly one under Rule 506, Regulation D is a better alternative than a SCOR Form U-7.