Regulation D is a set of SEC rules that provide exemptions from the registration requirements of the Securities Act of 1933, allowing private funds to sell securities without a public offering.
Why It Matters
Registering a securities offering with the SEC is expensive and time-consuming. Regulation D gives private funds a way to raise capital legally without going through that process. Nearly every private fund in the United States relies on one of its exemptions. Understanding which rule applies to your fund determines who you can accept as investors and how you can market the offering.
Key Details
- Rule 506(b): No general solicitation permitted. Up to 35 non-accredited but sophisticated investors allowed alongside unlimited accredited investors.
- Rule 506(c): General solicitation is permitted, but all investors must be verified as accredited. No non-accredited investors allowed.
- Rule 504: Allows offerings of up to $10,000,000 in a 12-month period, with different restrictions depending on state law compliance.
- Most private funds use Rule 506(b) because it allows self-certification of accredited status and does not require verification procedures.
- Form D must be filed with the SEC within 15 days of the first sale of securities.
For more, see Rule 506(b) vs. Rule 506(c).
Capital Company handles Regulation D compliance documentation and Form D filing support as part of fund administration.
This content is for informational purposes only and does not constitute legal, tax, or compliance advice. Consult qualified counsel for guidance specific to your situation.