What is a Securities Manual?
For companies to raise capital under the exemptions allowed by the JOBS Act, there are different requirements to maintain compliance with state and federal securities laws. For example, a company looking to raise capital through Regulation A+ must adhere to Blue Sky Laws in each state they are conducting the offering.
Similarly, for a company to allow its shareholders to transact on a secondary market, Blue Sky Laws also must be met. Since each state may have very different compliance requirements, an issuer can file what is referred to as a manual exemption. With the manual exemption, the issuer is required to be listed in a nationally recognized securities manual.
Securities manuals are publications that include specific information and financial statements of an issuer. Examples of securities manuals include Mergent’s and Standard & Poor’s. Listing in these manuals allows issuers to sell securities in a particular state without registration as long as the manual is recognized by the state. The issuer must include:
- The names of issuers, directors, and officers
- The balance sheet
- A profit and loss statement from the most recent fiscal year
As such, a securities manual is a collection of this data from many companies. For example, Mergent’s has a database of over 25,000 active and inactive companies. By being listed in a similar, nationally recognized manual, an issuer can be a step closer to maintaining compliance for their offering.
