A company is conducting a Regulation A+ Tier 2 offering of $50 million. What is the company's blue sky compliance obligation?
- AFull registration in every state where securities will be offered
- BTier 2 preempts state registration, not notice fees✓ Correct answer
- CBlue sky compliance is not required for any Regulation A offering
- DThe company must register in at least three states
Why B — Tier 2 preempts state registration, not notice fees
Under the JOBS Act amendments to Regulation A, Tier 2 offerings (up to $75 million) are treated as covered securities under NSMIA, which means they are preempted from state registration and qualification requirements. However, states retain the right to require notice filings and fees, and they maintain their anti-fraud enforcement authority. Tier 1 offerings (up to $20 million) are not preempted and must comply with state blue sky laws in each state where securities are offered, which is one of the reasons Tier 1 is less commonly used despite its lower reporting obligations.
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