RegD Requirements & Exemptions
Regulation D provides three exemptions from SEC registration for private placements: Rule 504, Rule 506(b), and Rule 506(c). Understand the key differences in offering limits, investor eligibility, solicitation rules, and filing obligations.
Rule 504, 506(b), and 506(c) at a glance
Each RegD exemption offers a different path to raising capital without full SEC registration. The right choice depends on your offering size, investor base, and whether you intend to advertise publicly.
| Feature | Rule 504 | Rule 506(b) | Rule 506(c) |
|---|---|---|---|
| Offering Limit | Up to $10 million in 12 months | Unlimited | Unlimited |
| Accredited Investors | Unlimited | Unlimited | Unlimited (must verify accreditation) |
| Non-Accredited Investors | Unlimited | Up to 35 (must be sophisticated) | Not allowed |
| General Solicitation | Permitted with restrictions | Prohibited | Permitted (must verify all investors are accredited) |
| Disclosure Requirements | Varies by state; may require registration and disclosure documents | Disclosure required if non-accredited investors involved | Standard disclosures; must comply with Blue Sky notice filing |
| SEC Filing | Form D within 15 days of first sale | Form D within 15 days of first sale | Form D within 15 days of first sale |
| Resale Restrictions | Restricted unless registered or exempt | Restricted; resale must meet Rule 144 | Restricted; resale requires further compliance |
| Blue Sky Compliance | Required in states where offered unless exempt | Blue Sky notice filings and fees typically required | Blue Sky notice filings and fees apply |
| Verification of Investors | Not required | Not required | Required ("reasonable steps" to verify) |
The traditional private placement
Rule 506(b) prohibits general solicitation and advertising. You may raise an unlimited amount from an unlimited number of accredited investors, plus up to 35 non-accredited investors who are sophisticated enough to understand the risks.
- No general solicitation or advertising permitted
- Up to 35 non-accredited but sophisticated investors allowed
- Disclosure documents required if non-accredited investors participate
- No need to take reasonable steps to verify accreditation
- Blue Sky notice filings and fees typically required
General solicitation permitted
Rule 506(c) allows issuers to advertise their offering publicly — through websites, social media, email campaigns, and other channels — provided every purchaser is verified as an accredited investor.
- General solicitation and advertising permitted
- All purchasers must be verified accredited investors
- Issuer must take "reasonable steps" to verify status
- Third-party verification services (like KoreVerify) satisfy this requirement
- Blue Sky notice filings and fees still apply
Smaller, state-registered offerings
Rule 504 is designed for smaller raises — up to $10 million in any 12-month period. It permits general solicitation in some cases, but state registration or accredited-only sales may be required depending on how the offering is conducted.
- Offering limit of $10 million in 12 months
- Unlimited accredited and non-accredited investors
- General solicitation permitted with state-level restrictions
- State registration or disclosure documents may be required
- Form D must be filed within 15 days of the first sale
Form D and Blue Sky compliance
Every RegD offering requires a Form D filing with the SEC within 15 days of the first sale of securities. Most states also require a Blue Sky notice filing and payment of a fee. Missing these deadlines can trigger late fees, regulatory inquiries, and rescission risk.
- File Form D with the SEC within 15 days of first sale
- Submit state Blue Sky notice filings where required
- Pay applicable state registration or notice fees
- Monitor amendment, renewal, and termination deadlines
- Maintain records for regulator examination if requested
Stay Compliant, Stay Confident
Meet the specific requirements for RegD 506(b), 506(c), and 504, and unlock the flexibility of Regulation D while staying aligned with SEC rules and state Blue Sky filings.