REGULATION D Meaning and
Definition
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Regulation D is a specific set of rules and guidelines established by the United States Securities and Exchange Commission (SEC) under the Securities Act of 1933. It outlines exemptions for certain securities offerings, allowing businesses to raise capital without having to register with the SEC. The primary purpose of Regulation D is to simplify and expedite the fundraising process for small and medium-sized enterprises (SMEs).
Under Regulation D, companies can offer and sell their securities to accredited investors and a limited number of non-accredited investors. Accredited investors are typically individuals or institutions with a high net worth or significant investment experience. Non-accredited investors are those who do not meet the financial thresholds set for accredited investors.
There are different exemptions available under Regulation D, including Rule 504, Rule 505, and Rule 506. Each exemption has its own set of criteria and limitations regarding the amount of capital that can be raised and the type of investors who can participate. These exemptions also have specific filing requirements and disclosure obligations that must be followed.
Regulation D plays a vital role in fostering capital formation and enabling SMEs to access investment opportunities. By providing these exemptions, the SEC seeks to balance investor protection with the need for capital market efficiency and growth. It serves as a framework for businesses to raise funds from private investors while ensuring adequate disclosure and transparency.
Common Misspellings for REGULATION D
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