Last week the
SEC announced the approval of an amendment to
Regulation D of the
Securities Act of 1933. The amendment permits the use of general
solicitation in connection with certain private placements conducted under Rule 506 of Regulation D. The proposal for the rule change is online
Eliminating the Prohibition Against General Solicitation and General Advertising in Rule 506 and Rule 144A Offerings. The Commission’s press release announcing the approval of the rule change is also online –
SEC Approves JOBS Act Requirement to Lift General Solicitation Ban.
Prior to this amendment, Rule 506 (as well as Rule 505 which remains unchanged) prohibited any general solicitation or advertising. Prior to this amendment, Rule 506 permitted issuers to take in an unlimited number of
accredited investors and up to 35 non-accredited investors. For more information on the private placement process and qualifications, see my article
Introduction to Private Placements, at
The Securities Law Home Page.
The full article is at our
web site.
