In July 2013, the SEC proposed significant changes affecting private
offerings under Rule 506 of Regulation D, the most frequently used exemption
from the registration requirements. The proposed rule changes are directly
related to final rule amendments allowing advertised private placements under
Rule 506. As is explained in our article, many people believe that the failure
of the SEC to take action on these proposals, one way or the other, is
discouraging the use of advertised private placements.
If adopted, these proposed changes will impact all offerings made under Rule
506, not just offerings made under the new advertised private placement rule.
The proposals would change the filing requirements and content of Form D,
provide a one-year disqualification penalty for failure to file a required Form
D and require several actions relating to materials used in advertised private
The proposed rule changes are extremely controversial, and the SEC has
received a large number of comments concerning them. State securities
regulators, investor advocates and some members of Congress strongly support
them. Industry participants, start-up sponsors, their representatives and other
members of Congress vehemently oppose them. This article explains these proposed
changes and the comments the SEC has received concerning them.
To read the full text of the article, which discusses the rules and comments