Coordinated review programs for state registration of securities or franchise offerings streamline the process for an issuer seeking to undertake a multi-state registration of its securities or franchise offering. In addition to establishing uniform review standards, coordinated review is designed to expedite the registration process, saving the issuer time and money. Coordinated review is voluntary, and there is no additional cost for choosing to register an offering through coordinated review.
The states, under the auspices of the North American Securities Administrators Association (NASAA), have created coordinated review protocols for equity, small company and franchise offerings. A NASAA project group currently is developing a fourth protocol for direct participation program securities.
CR-EQUITY is the protocol designed for the registration of offerings of common stock, and convertible securities, options, warrants or rights that may be converted into or exercised to purchase common stock and units made of these securities, that are registered under Section 5 of the Securities Act of 1933. CR-EQUITY generally is intended for initial public offerings. Forty jurisdictions that review registered equity offerings participate in CR-EQUITY.
The coordinated review protocol for offerings exempt from registering federally with the Securities and Exchange Commission under either Regulation A or Rule 504 of Regulation D is known as CR-SCOR. Reviews under CR-SCOR are undertaken on a regional basis. Currently there are five regions made up of Mid-Atlantic, Mid-Western, New England, Southwestern and Western states. A Southeastern region is being formed.
CR-FRAN is available to a franchisor filing an initial application to register its offering in two or more participating states. To be eligible for CR-FRAN, the franchisor's registration application must be accompanied by audited financial statements.