Intrastate Offering Exemptions:
A Small Entity Compliance Guide for Issuers[1]

April 19, 2017

On October 26, 2016, the Commission adopted final rules that modernize how issuers can raise money to fund their businesses through intrastate offerings while maintaining investor protections.  The final rules amended Securities Act Rule 147 to modernize the safe harbor under Section 3(a)(11)[2] so issuers may continue to use state law exemptions that are conditioned upon compliance with both Section 3(a)(11) and Rule 147.  The final rules also established a new intrastate offering exemption, Securities Act Rule 147A, that further facilitates intrastate offerings by allowing offers to be accessible to out-of-state residents and making the exemption available to issuers that are incorporated or organized out-of-state.[3]

1. Requirements of Rules 147 and 147A

In order to conduct offerings pursuant to Rule 147 or Rule 147A, issuers[4] must meet certain requirements. The table below broadly summarizes the Commission requirements for each rule. We refer to “in-state” as the state or territory in which the issuer is resident and doing business at the time of the sale of the security.

Requirements of
Rule 147
(safe harbor under
Section 3(a)(11))
Requirements of
Rule 147A
The issuer is organized in-state.
The officers, partners, or managers of the issuer primarily direct, control and coordinate the issuer’s activities (“principal place of business”) in-state.
The issuer satisfies at least one of the “doing business” requirements described below.
Offers are limited to in-state residents[5] or persons who the issuer reasonably believes are in-state residents.
Sales are limited to in-state residents or persons who the issuer reasonably believes are in-state residents.
The issuer obtains a written representation from each purchaser as to residency.

“Doing Business” In-State

Issuers conducting an offering pursuant to Rule 147 or Rule 147A must satisfy at least one of the following requirements in order to be considered “doing business” in-state:

2. Restrictions on Resales

Securities purchased in an offering pursuant to Rule 147 or Rule 147A can only be resold to persons residing in-state for a period of six months from the date of the sale by the issuer to the purchaser. Issuers must disclose these limitations on resale to offerees and purchasers and include appropriate legends on the certificate or document evidencing the security. Although securities purchased in an offering pursuant to Rule 147 or Rule 147A are not considered “restricted securities,” persons reselling the securities will nonetheless need to register the transaction with the Commission or have an exemption from registration under federal law.[7]

3. Filing Requirements and Relationship with State Securities Laws

Issuers conducting an offering pursuant to Rule 147 or Rule 147A are not required to file any information with or pay any fees to the Commission. Issuers, however, must comply with state securities laws and regulations in the state in which securities are offered or sold. Each state’s securities laws have their own registration requirements and exemptions to registration requirements. Issuers wishing to obtain information should contact the state securities regulator in the state in which they intend to offer or sell securities for further guidance on compliance with state law requirements. Issuers may also obtain useful information on state securities law registration requirements and exemptions to registration requirements by visiting the website of the North American Securities Administrators Association (NASAA) at

4. Integration

The integration doctrine provides an analytical framework for determining whether multiple securities transactions should be considered part of the same offering. This analysis helps to determine whether registration under Section 5 of the Securities Act is required or an exemption is available for the entire offering. Rules 147 and 147A provide issuers with a safe harbor that offers or sales conducted pursuant to Rule 147 or Rule 147A will not be integrated with:

5. Other Resources

The adopting release for the amendments to Rule 147 and new Rule 147A can be found on the SEC’s website at

Rule 147 (17 CFR 230.147) and Rule 147A (17 CFR 230.147A) can be accessed through the “Corporation Finance” section of the SEC’s website at under “General Rules and Regulations, Securities Act of 1933.”

Additional materials regarding the requirements of Section 3(a)(11) and Rules 147 and 147A and staff transition guidance[8] are available at

You can also submit complaints or tips about possible securities laws violations on the SEC’s questions and complaints page at

6. Contacting the SEC Staff

The SEC staff is happy to assist with questions regarding Section 3(a)(11) and Rules 147 and 147A. You may contact the Division of Corporation Finance’s Office of Small Business Policy online or by telephone at (202) 551-3460.

[1] This guide was prepared by the staff of the U.S. Securities and Exchange Commission (the “Commission”) as a “small entity compliance guide” under Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996, as amended. The guide summarizes and explains the rules adopted by the SEC, but is not a substitute for any rule itself. Only the rule itself can provide complete and definitive information regarding its requirements.

[2] Section 3(a)(11) of the Securities Act is generally known as the “intrastate offering exemption.” To qualify for the exemption, an issuer must be organized in the state where it is offering the securities; carry out a significant amount of its business in that state; and make offers and sales only to residents of that state. As Rule 147 is a safe harbor to the Section 3(a)(11) exemption, its requirements track those of Section 3(a)(11).

[3] Amended Rule 147 and new Rule 147A are effective on April 20, 2017.

[4] Issuers registered or required to be registered under the Investment Company Act of 1940 are not eligible to conduct offerings pursuant to Section 3(a)(11), Rule 147 or Rule 147A.

[5] The residence of an offeree or purchaser that is a legal entity (e.g. corporation, partnership or trust) is the location where, at the time of the sale, the entity has its principal place of business. However, if a legal entity was organized for the specific purpose of acquiring securities pursuant to Rule 147 or Rule 147A, all beneficial owners must be in-state residents for the entity to be considered an in-state resident. In addition, a trust that is not deemed to be a separate legal entity is a resident of each state or territory in which its trustee is, or trustees are, resident.

[6] This is measured at the end of its most recent semi-annual fiscal period prior to the first offer of securities pursuant to the exemption.

[7] An exemption commonly relied upon for the resale of the securities is Section 4(a)(1) of the Securities Act, which is available to any person other than an issuer, underwriter or dealer. Rule 144 is a “safe harbor” under Section 4(a)(1), providing objective standards that a security holder can rely on to meet the requirements of that exemption. Several exemptions, including the exemptions under Regulation D and Rules 147 and 147A are only available for offers and sales by an issuer of securities to initial purchasers and are not available to any affiliate of the issuer or to any person for resales of the securities.

[8] See Securities Act Rules Compliance and Disclosure Interpretations Question 141.06 available at An issuer making ongoing offers and sales of securities pursuant to Rule 147 is able to transition to offers and sales of securities in reliance on Rule 147A, subject to compliance with all applicable state securities law requirements.