CR-SCOR: Southwest
Overview
Coordinated Review-SCOR-Southwest (CR-SCOR-Southwest) is a program available to issuers seeking to sell securities in multiple southwestern states in an offering to be made using the Small Company Offering Registration (SCOR) Form. The program coordinates the registration process in all states in the region in which the issuer seeks to sell, saving the issuer time and money. The program expedites the registration process through strict review deadlines and by allowing an issuer to complete the registration while only interacting with one state regulator regardless of the number of states in which the offering will be registered. The states of Texas, Arkansas, and Oklahoma participate in the program.
If you are considering offering in additional states, consult the central website for the CR-SCOR programs, which include CR-SCOR-Mid-Atlantic, CR-SCOR-Midwest, and CR-SCOR-West. If you are considering offering on a national basis, check out the Coordinated Review-3(b) Program for Regulation A offerings and the Coordinated Review-Equity Program for federally registered equity offerings. Offerings of interests in real estate investment trusts, business development companies, oil and gas programs and other direct participation programs can take advantage of Coordinated Review-Direct Participation Programs.
Participating States
States currently participating in the CR-SCOR-Southwest program include: Texas, Arkansas, and Oklahoma. Coordinated review is only available if the company intends to register in two (2) or more of these states.
Eligibility
Any company that is an American or Canadian corporation or centrally-managed limited liability company (LLC) may register through CR-SCOR-Southwest with certain exceptions. The following companies are prohibited from using SCOR, and thus prohibited from using CR-SCOR-Southwest:
- Partnerships;
- Companies in the business of petroleum exploration or production, mining, or in other extractive industries;
- Holding companies, portfolio companies, issuers with complex capital structures, commodity pools, equipment leasing programs, or real estate programs;
- Companies conducting “blind pool” offerings or other offerings for which the specific business or properties cannot be described;
- If the company, any of the company’s management, or 10% or greater stockholders have had certain regulatory problems in the past;
- Companies whose securities are subject to registration with a government agency other than the federal Securities and Exchange Commission (“SEC”) or a state securities regulator;
- Public companies that report to the SEC under Sections 12 or 15(d) of the Securities Exchange Act of 1934.
A company may register common or preferred stock (including convertible preferred stock); options, warrants or rights; LLC membership interests through CR-SCOR-Southwest. In addition, an issuer may use the program to register debt securities (including convertible debt) if the company can show it will be able to meet its debt service requirements based on current earnings. A company may not use the SCOR program to register common stock with lesser voting rights than other common shares.
If you are considering a differing type of offering, please consider using one of the other coordinated review programs that are available. More information is available at www.coordinatedreview.org.
How to Apply for Coordinated Review
To register using CR-SCOR-Southwest, an issuer must submit a Southwest Regional Review Form as an attachment to its Form U-1 (Uniform Application to Register Securities), and shall also file the SCOR Form disclosure document and exhibits concurrently with the Program Administrator and in all states in the Southwest Region in which it seeks to register. Texas is acting as the Program Administrator of the Southwest Regional Review program. These documents will constitute the company’s Regional Review application, and must be mailed to:
Texas State Securities Board
P.O. Box 13167
Austin, Texas 78711-3167
http://www.ssb.state.tx.us
Arkansas Securities Department
Heritage West Building
201 East Markham, Suite 300
Little Rock, AR 72201-1692
www.securities.arkansas.gov
Oklahoma Department of Securities
204 N Robinson, Ste. 400
Oklahoma City, OK 73102-7001
http://www.securities.ok.gov
Companies must file a copy of the Southwest Regional Review Form with Texas as the Program Administrator, even if the company does not intend to register its securities for sale in Texas. While the company must pay the regular filing fees for each state in which it seeks to register its offering, it should not send fees to Texas unless it seeks to register its offering there.
Selection of the Lead Examiner
Within three business days after receipt of the Regional Review application, Texas will contact all participating states to identify a lead examiner. Selection of the lead examiner is based on various factors, such as each state’s work load, experience in reviewing such offerings, and whether the company’s principal place of business is located in a participating state.
Timing
Within three business days after receipt of the Regional Review application, Texas will contact all participating states to identify a lead examiner. All participating states have twenty (20) business days to comment on the issuer’s application and forward those comments to the lead examiner. If, prior to registering the offering, the issuer amends its application to add additional states, the comment period will be extended an additional ten (10) business days. Upon receipt of a response by the company, the lead examiner will reply no later than ten (10) business days, copying all participating states. Upon review and approval of the final registration application, the lead examiner will give notice to the participating states and each state will clear the application the same day. The issuer should anticipate receiving the initial response letter from the participating states within 5-6 weeks.
Lead Examiner Responsibilities
The lead examiner is responsible for:
- Collecting comments from the participating states;
- Drafting one comment letter to the issuer;
- Forwarding a copy of the initial comment letter to the participating states;
- Forwarding a copy of the issuer’s response letter to the participating states;
- Negotiating the resolution of comments with the issuer;
- Negotiating the resolution of comments with the participating states;
- Making all final decisions regarding the resolution of comments; and
- Recommending registration of the issuer’s offering and forwarding that recommendation to all participating states.
Issuer Responsibilities
The issuer is responsible for the following:
- Filing the Application for Regional Review application and all other required documents and fees with each participating state in which it seeks to sell;
- Filing the Application for Regional Review and all other required documents in Texas if the issuer is not otherwise applying for registration in Texas;
- Filing all amendments with the participating states;
- Communicating with the lead examiner to resolve comments;
- Forwarding all amendments to the issuer’s offering documents to the participating states; and
- If necessary, negotiating the resolution of state specific comments with the participating states.
Who to Contact with Questions
Patricia Loutherback
Texas State Securities Board
Director, Registration Division
(512) 305-8362
ploutherback@ssb.state.tx.us
Additional Resources
Small Company Offering Registration Form (Form U-7)
Southwest Regional Review Protocol
Southwest Regional Review Form (to be attached to Form U-1)
Application to Register Securities (Form U-1)