Rule 506(c) permits issuers to broadly solicit and generally advertise an offering, provided that:
- all purchasers in the offering are accredited investors
- the issuer takes reasonable steps to verify purchasers’ accredited investor status and
- certain other conditions in Regulation D are satisfied
Purchasers in a Rule 506(c) offering receive “restricted securities.” A company is required to file a notice with the Commission on Form D within 15 days after the first sale of securities in the offering. Although the Securities Act provides a federal preemption from state registration and qualification under Rule 506(c), the states still have authority to require notice filings and collect state fees.
Rule 506(c) offerings are subject to “bad actor” disqualification provisions.
Additional Information and Resources
- Filing and amending a Form D notice
- Compliance Guide: Eliminating the Prohibition Against General Solicitation and General Advertising in Rule 506 and Rule 144A Offerings
- Compliance Guide: Disqualification of Felons and Other “Bad Actors” from Rule 506 Offerings and Related Disclosure Requirements
- Press Release with Fact Sheet: SEC Approves JOBS Act Requirement to Lift General Solicitation Ban
- Staff Guidance: Regulation D Compliance and Disclosure Interpretations (Sections 254)
- Investor Bulletin: Private Placements Under Regulation D
- Investor Alert: Advertising for Unregistered Securities Offerings
- Division of Trading and Markets: JOBS Act FAQs About the Exemption from Broker-Dealer Registration in Title II of the JOBS Act
- Division of Economic and Risk Analysis White Paper: Capital Raising in the U.S.: An Analysis of the Market for Unregistered Securities Offerings, 2009-2014
Additional Information and Resources
- Press Release: SEC Proposes Rule Changes to Harmonize, Simplify and Improve the Exempt Offering Framework
- Press Release: SEC Seeks Public Comment on Ways to Harmonize Private Securities Offering Exemptions
- Filing a Form D notice
- Compliance Guide: Eliminating the Prohibition Against General Solicitation
- Compliance Guide: Disqualification of Felons and Other “Bad Actors”
- Press Release: SEC Approves JOBS Act Requirement to Lift General Solicitation Ban
- Staff Guidance: Regulation D Compliance and Disclosure Interpretations (Section 254)
- Investor Bulletin: Private Placements Under Regulation D
- Investor Alert: Advertising for Unregistered Securities Offerings
- JOBS Act FAQs About the Exemption from Broker-Dealer Registration in Title II of the JOBS Act
- Capital Raising in the U.S.: An Analysis of the Market for Unregistered Securities Offerings, 2009-2014