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SEC approves lift of general solicitation ban

  • SEC (US Securities and Exchange Commission) Image

Jul 10, 2013

The SEC has published a final rule to amend Rule 506 of Regulation D and Rule 144A under the Securities Act of 1933 to implement Section 201(a) of the Jumpstart Our Business Startups (JOBS) Act.

Under the amended law, an issuer will be able to engage in general solicitation or advertising in offering and selling securities as long as all purchasers of the securities are accredited investors and the issuer takes reasonable steps to verify that such purchasers are accredited investors. In a separate release, the SEC published a final rule to disqualify issuers and other market participants from relying on Rule 506 if “felons and other bad actors” are participating in the Rule 506 offering. The final rule and amendments are effective as of September 23, 2013.

In addition, the SEC published for comment a proposed rule that includes a number of proposed amendments to Regulation D, Form D, and Rule 156 under the Securities Act that are intended to enhance the SEC’s ability to evaluate the development of market practices in Rule 506 offerings and address concerns raised over implementing Section 201(a)(1) of the JOBS Act. These proposed amendments will allow the SEC to appropriately facilitate general solicitation and advertising activities under new paragraph (c) of Rule 506. Comments on the proposed rule are due by September 23, 2013.

Please click for the following documents on the SEC's Web site:

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