On July 10, 2013, the Securities and Exchange Commission (the “SEC”) adopted a new rule to lift the ban on general solicitation for certain Rule 506 offerings to accredited investors. The new rule will become effective 60 days after publication in the Federal Register.
Rule 506 of Regulation D is the most popular private placement offering exemption available in the United States. One of the requirements to use this exemption has historically prevented companies relying on it from using general solicitation or general advertising to sell the securities. This ban on general solicitation has made it difficult for companies to find potential investors to raise capital.