Regulation D

Regulation D (or Reg D) contains the rules providing exemptions from the registration requirements, allowing some companies to offer and sell their securities without having to register the securities with the SEC. A Regulation D offering is intended to make access to the capital markets possible for small companies that could not otherwise bear the costs of a normal SEC registration.

Reg D is composed of various rules prescribing the qualifications needed to meet exemptions from registration requirements for the issuance of securities.

Rule 501 of Reg D contains definitions that apply to the rest of Reg D. Rule 502 contains the general conditions that must be met to take advantage of the exemptions under Regulation D.

Generally speaking, these conditions are (1) that all sales within a certain time period that are part of the same Reg D offering must be “integrated”, meaning they must be treated as one offering, (2) information and disclosures must be provided, (3) there must be no “general solicitation”, and (4) that the securities being sold contain restrictions on their resale.

Rule 503 requires issuers to file a Form D with the SEC when they make an offering under Regulation D.

Regulation D establishes three exemptions from Securities Act registration.

Those are rules 504, 505, and 506.