On July 10, 2013, the Securities and Exchange Commission (SEC) swept away the 80-year-old prohibition against general solicitations and advertising for private placements of securities pursuant to Regulation D of the Securities Act of 1933, finally implementing the Congressional directive to do so under the JOBS Act of 2012.
The SEC adopted new Rule 506(c) and related regulations,1 effective on Sept. 23, 2013. Rule 506(c) allows issuers to advertise freely, to solicit, and to discuss their private placements through a broad range of avenues, from Internet and print media, to speaking engagements at conferences, to presentations made to small groups of potential investors, so long as the issuer only sells its securities to “accredited investors.” At the same time, the SEC took the opportunity to propose changes to Form D filing requirements, and to propose extending Rule 156 registered investment company disclosure requirements to private investment funds.2
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