Commissioner’s Release: 111-C


Pete Wilson, Governor
Date: April 16, 1998

Dale E. Bonner, Commissioner

The Commissioner of Corporations hereby announces the participation of the Department of Corporations in the Coordinated Review of Equity Offerings program (“CER”) established by the North American Securities Administrators Association, Inc. (“NASAA”). CER is an opportunity for California issuers to seek simultaneous review of securities offerings in several states pursuant to a single comment letter. This NASAA pilot program is a response to the National Securities Markets Improvement Act of 1996 and other developments in the securities markets. In general, CER is an attempt to build upon coordination efforts by NASAA.

CER provides for a process of coordination of review among sister state securities regulators which allows each participating state to avoid the duplication of another state’s regulatory efforts and resources in reviewing each application. Under CER, an issuer requests coordination of review by notifying the Department of its intent to participate under CER. The issuer then files a complete application with the Department and any other state in which the issuer seeks to offer securities. A “lead state” is then appointed to manage the coordination process among the participating states. A California offering application is reviewed by the Department and all comments and other issues raised by the application are forwarded to the lead state. It is the responsibility of the lead state to combine all of the relevant comments into a single letter that is then forwarded to the issuer. Under CER, all negotiations related to a particular offering are conducted with a single state regulator. However, individual state-specific comments may necessitate aApril 16, 1998itional interaction with the issuer outside of the lead state relationship.

States participating in CER have agreed to adhere to the guidelines promulgated by NASAA, except to the extent these guidelines contradict state law, including rules and orders. The purpose of these guidelines is to provide a basis for uniformity among the states without contravening state law, including rules and orders. To facilitate its participation in this pilot program, the Department has appointed an internal working group to oversee and review the CER applications. This group is responsible for maintaining the consistency of the review process and insuring that each applicant is in compliance with the Corporate Securities Law of 1968, as amended. Variances from the requirements of the Commissioner’s rules will be considered on an ad hoc basis, consistent with Rule 260.140 (10 C.C.R. Sec. 260.140).

Assistant Commissioner
Office of Policy
(916) 322-3553