Five-Factor Test

The SEC has long been concerned with the integration of offerings and the possibility that market participants would attempt to evade the securities registration requirements by purporting to separate a single offering into multiple supposedly exempt offerings or that several offerings that should be part of a single plan of financing when integrated would fail to meet the conditions for the claimed exemption.  This integration doctrine was articulated in SEC Release No. 33-4552, where the SEC noted five factors that would be considered in connection with evaluating whether offerings should be integrated: whether the offerings are part of a single plan of financing, whether the offerings involve the issuance of the same security, whether the offerings are made at or about the same time, whether the same consideration is to be received, and whether the offerings are to be made for the same purpose.