CR-DPP provides a uniform procedure designed to coordinate the blue-sky registration process among states in which the issuer seeks to sell its securities. Currently, there are 34 jurisdictions1 that are participating in CR-DPP. Candidates for CR-DPP are generally those issuers who are seeking registration of an initial public offering of limited partnership interests, limited liability partnership interests, securities of oil and gas programs and Real Estate Investment Trusts. Such offerings also must be registered (or seeking registration) under Section 5 of the Securities Act of 1933. Thus, CR-DPP is not available for offerings to be made in reliance upon an exemption from registration under SEC Regulation A.
One of the benefits of using CR-DPP is that the issuers can expect an expedited review of the offering. Given the amount of time and effort necessary to coordinate multiple jurisdictions, however, issuers should plan on the CR-DPP process taking a minimum of 60 days.
In addition to receiving expedited review, CR-DPP offers registration efficiencies by creating a uniform scheme of review. CR-DPP utilizes the following NASAA Guidelines that provide a predictable standard of review for issuers with respect to both merit and disclosure2 issues:
Finally, CR-DPP simplifies the process for resolution of issues raised during review of the registration application. Under CR-DPP, a lead disclosure jurisdiction and a lead merit jurisdiction are designated. The lead disclosure jurisdiction coordinates all disclosure comments and the lead merit jurisdiction coordinates all merit comments. The two lead jurisdictions generate one comment letter on behalf of all jurisdictions. The issuer negotiates resolution of comments with the two lead jurisdictions. Once the lead disclosure jurisdiction agrees to clear the offering, all participating disclosure jurisdictions agree to clear it simultaneously. The same is true with respect to the merit jurisdictions. In this way, CR-DPP simplifies the overall blue-sky registration process and places a significant portion of the coordination effort on the lead jurisdictions.
1For a list of the participating jurisdictions, see the Application for Coordinated Review for Direct Participation Programs (CR-DPP-1).
2Although many of the NASAA Guidelines contain disclosure requirements, it is likely that the disclosure states will issue additional comments that are contingent on the nature of the particular offering.