H.R. 3135: Regulation Advancement for Capital Enhancement Act of 2025

This bill, known as the Regulation Advancement for Capital Enhancement Act of 2025 (or RACE Act of 2025), seeks to amend the Securities Act of 1933 regarding how offering statements for certain securities are handled. Here’s a breakdown of what the bill proposes:

Key Provisions

• Automatic Qualification: The bill allows for an offering statement filed with the Securities and Exchange Commission (SEC) to be automatically qualified if it pertains to additional classes of securities that are somewhat similar to a previously issued class.
• Criteria for Additional Classes: To qualify for this automatic approval, the new class of securities must meet specific criteria, including:
  • The securities must be substantially similar and share predefined characteristics with the previously qualified class.
  • The offering amount for each new class should be less than $5,000,000.
  • The total amount for all additional classes offered in the previous 12 months must not exceed the aggregate limit allowed for these types of offerings.
• Definition of Substantial Similarity: The bill clarifies that securities can be considered substantially similar even if they do not share the same nature or terms, making it easier for issuers to navigate compliance.

Implications

The changes proposed by this bill are intended to simplify the process for issuers of securities under Regulation A Tier 2, which typically involves raising capital in amounts up to $75 million. By facilitating the automatic qualification of offering statements, the bill aims to reduce administrative burdens and foster capital formation for businesses.

Relevant Companies

• None found