CR-Equity provides a uniform procedure designed to coordinate the blue-sky registration process among states in which the issuer seeks to sell its equity securities. In addition to creating uniformity in review standards, the program is designed to expedite the registration process, saving the issuer time and money. Of the jurisdictions that register offerings eligible to use CR-Equity, all but four currently are participating in the program. CR-Equity is designed to target offerings of securities that are not "Covered Securities" as defined in Section 18(b)(1) of the Securities Act of 1933.
CR-Equity offers issuers registration efficiencies by creating a uniform scheme of review. CR-Equity utilizes established NASAA Statements of Policy for substantive (merit) comments. This provides a predictable standard of review for issuers with respect to merit issues. The review regarding disclosure issues is contingent on the nature of each individual offering although many of the NASAA Statements of Policy contain disclosure requirements.
Additionally, CR-Equity simplifies the process for resolution of issues raised during review of the registration application. Under CR-Equity, 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-Equity simplifies the overall blue-sky registration process and places a significant portion of the coordination effort on the lead jurisdictions.
Finally, CR-Equity offers issuers expedited review. The CR-Equity Program Protocol establishes compulsory time periods for review and generation of comments. The time to clear an offering through CR-Equity remains contingent on the response time of the issuer, but the response time of the participating jurisdictions is established and predictable. Because of the time and effort necessary to coordinate multiple jurisdictions, issuers should plan on the CR-Equity process taking a minimum of 30 days. Issuers should consider this time frame when requesting registration under CR-Equity.