Skip to main content

Legal Update

SEC Proposes to Eliminate General Solicitation and General Advertising Prohibitions from Certain Private Placements

31 August 2012
Mayer Brown Legal Update
The US Securities and Exchange Commission has proposed eliminating the prohibition against general solicitation and general advertising in offerings of securities pursuant to Rule 506 of Regulation D and Rule 144A. If adopted as proposed, Rule 506 will contain two alternative methods of compliance. The first, which exists today, prohibiting general solicitation and general advertising, but allowing offers and sales to accredited investors and up to 35 non-accredited investors or persons who the issuer reasonably believes are not accredited investors who meet certain sophistication requirements. And the second, which is now under consideration, permitting general solicitation and general advertising, but not allowing sales to any non-accredited investors, including employees that are not accredited investors. The comment period for the rule proposals runs for 30 days from the date of their publication in the Federal Register. As a result, it is possible that the SEC could act to adopt final rules as early as October 2012.
The Build a Report feature requires the use of cookies to function properly. Cookies are small text files that are placed on your computer by websites that you visit. They are widely used in order to make websites work, or work more efficiently. If you do not accept cookies, this function will not work. For more information please see our Privacy Policy

You have no pages selected. Please select pages to email then resubmit.