Series 82: Integration And Aggregation

Integration and Aggregation

Sometimes an issuer will want to conduct multiple offerings under different exemptions. While this is allowed under certain circumstances, it requires close attention to two issues that are sometimes confused with each other: integration and aggregation.

Integration occurs when the SEC decides that one or more offerings are really a single offering, based on factors such as whether the offerings have similar timing, a similar purpose, and the extent to which they may condition the market for each other. An offering is said to condition the market for another offering if the marketing efforts for the offerings blur together, so that investors who learn about one offering may end up investing in the other offering as a result. If the SEC decides that the offerings are really a single offering, then the combined offering must meet all of the conditions of a single exemption, or it will lose its exempt status. In addition, there may be consequences for the registered persons involved. The rules around integration can be complex, and the SEC in recent years has tried to simplify the issue by adding safe harbor provisions to various exemptions, specifying the circumstances under which integration will not occur.

Example: ABC Company wishes to cond