Enter to open, tab to navigate, enter to select
Regulation D
Practical Law Glossary Item 2-382-3744 (Approx. 3 pages)
Glossary
Regulation D
A collection of SEC rules that governs the limited offer and sale of securities without Securities Act registration. There are three regulatory exemptions under Regulation D which are found in Rules 504, 506(b) and 506(c). These safe harbors were established to help small businesses raise capital.
The maximum offering amount under Rule 504 is $10 million in a 12-month period.
Rules 506(b) and 506(c) do not limit the amount of money an issuer can raise in a private placement. The absence of a cap makes Rules 506(b) and 506(c) very important private placement exemptions. Rule 506(b) and 506(c) differ from each other in terms of:
- Permitted investors.
- Information requirement for certain investors.
- Verification required of investor status.
- Use of general solicitation and general advertising in the offering.
Regulation D provides for terms and conditions to using these registration exemptions. For more information, see Practice Note, Section 4(a)(2) and Regulation D Private Placements.