New SEC Rules Allow General Solicitation and General Advertising in Private Offerings Under Rule 506


The Securities and Exchange Commission on Wednesday, July 10, issued final rules lifting the longstanding prohibition of general solicitation and general advertising in private offerings of securities conducted in reliance on Rule 506 of Regulation D under the Securities Act of 1933.  The new rules, which take effect 60 days after publication (forthcoming) in the Federal Register, implement changes mandated by the Jumpstart Our Business Startups Act (the “JOBS Act”) of 2012.  The changes are intended to make it easier for companies to raise money through exempt sales of securities to qualified “accredited investors” as defined in Regulation D.  Companies that comply with the new rules will be able to promote their offerings using general solicitation and general advertising and sell to accredited investors that learn of the securities offering through these newly-permitted marketing avenues.

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