Regulation D

Regulation D
Regulation D /-'dē/ n: a regulation of the Securities and Exchange Commission governing the limited offer and sale (as by a private offering) of unregistered securities

Merriam-Webster’s Dictionary of Law. . 1996.

Regulation D
USA
A collection of SEC rules that governs the limited offer and sale of securities without Securities Act registration. Of its three exempting rules, Rules 504 and 505 are promulgated under Section 3(b) of the Securities Act, while Rule 506 is established under Section 4(<<2)}} of the Securities Act.
Using the authority of Section 3(b), Rules 504 and 505 of the Securities Act exempt certain offerings with an aggregate price of up to $5 million. These safe harbors were established to help small businesses raise capital.
In contrast, Rule 506 (like Section 4(2)) does not limit the amount of money an issuer can raise in a private placement. The absence of a cap makes Rule 506 a very important private placement exemption. Also, Rule 506 is important because it is a non-exclusive safe harbor under Section 4(2). This means that if an issuer attempts to use Rule 506, but fails to comply with all the terms and conditions of Regulation D, the issuer can still rely on Section 4(2) for the proposed offering.
Regulation D provides for terms and conditions to using these three registration exemptions. For more information, see Practice Note,Section 4(2) and Regulation D Private Placements (www.practicallaw.com/8-382-6259).

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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