This spring, the staff of the Securities and Exchange Commission (the “SEC”) issued a no action letter providing significant new guidance under Rule 506(c) of Regulation D of the Securities Act of 1933 (the “Securities Act”), which allows for general solicitation and general advertising in connection with Regulation D offerings to accredited investors.[1] The guidance offers a more streamlined path for issuers—particularly private funds—to comply with the requirement to take “reasonable steps to verify” the accredited investor status of each purchaser in a Rule 506(c) offering.
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