Regulation D Archives - MasterCompliance

SEC Rule to Simplify Exempt Offering Framework for Small Firms

Posted on February 2, 2021February 5, 2021 by admin

On Nov. 2, 2020, the U.S. Securities and Exchange Commission (SEC) adopted final rules to simplify the exempt offering framework. The SEC’s goal with these amendments was to “simplify, harmonize, and improve certain aspects of the exempt offering framework to promote capital formation while preserving or enhancing important investor protections.”. More Specifically they aimed to:

Address the ability of issuers to move from one exemption to another;
Set clear and consistent rules governing offering communications between investors and issuers;
Address potential gaps and inconsistencies in their rules relating to offering and investment limits; and
Harmonize certain disclosure requirements and bad actor disqualification provisions.

Private Placement Basics – Part II

Posted on September 20, 2018September 24, 2018 by SCM Communications

[Continued from Private Placement Basics – Part I]

Due Diligence and the Suitability of Private Placements

The SEC’s recent amendments to Regulation D in accordance with the JOBS Act do not diminish a firm’s responsibility to conduct adequate due diligence on its offerings to ensure that any recommendations made to potential investors to purchase securities in a private placement are suitable. Additionally, as private placement sales activities continue to be among FINRA’s list of regulatory hot topics, FINRA will examine firms’ private placement activity to determine if firms are taking reasonable steps to confirm that investors meet accredited investor standards.

Regulation D Exemptions

Posted on December 10, 2017December 11, 2017 by SCM Communications

Regulation D, established by the Securities and Exchange Commission, provides exemptions that allows companies to raise capital through the sale of unregistered securities. Under Regulation D, companies can avoid the costs associated with a public offering. Although companies are not required to register with the SEC under Regulation D, they are still required to provide the proper framework and disclosure documentations. There are four exemptions under Regulation D: Rule 504, 505, 506(b), and 506(c). The exemptions differ in regards to who can invest, how much capital can be raised, and who can be solicited. Rule 504 Under Rule 504, an Read more about Regulation D Exemptions[…]

Regulation D: Rule 504 Exemption

Posted on December 16, 2016May 24, 2017 by SCM Communications

While reviewing documents related to a private placement engagement, you may see references to Regulation D (sometimes referred to as “Reg. D”). Regulation D consists of three SEC rules – Rules 504, 505, and 506 – that issuers often rely on to sell securities in unregistered offerings. Each rule has specific requirements that the issuer must meet. SEC Rule 504, for example, provides an exemption from the registration requirements of the federal securities laws. Read More…