Based on the Jumpstart Our Business Startups Act of 2012(JOBSAct), several rule changes were recently approved by the SEC. Following are summaries expected to become effective 60 days after their publication in the Federal Register,which is estimated to be on or about September 10th.
New Rule 506(c): The new rule eliminates the prohibition against "general solicitation and general advertising" in certain securities offerings conducted pursuant to Rule 506 of Regulation D and Rule 144A under the Securities Act. The final rules create new Rule 506(c), which provides an additional exemption from registration for offerings marketed using general solicitation or general advertising, provided: (i) the issuer takes reasonable steps to verify that the purchasers of the securities are "accredited investors"; and (ii) all of the ultimate purchasers of the securities are accredited investors, either because they come within one of the enumerated categories of persons that qualify as accredited investors, or the issuer reasonably believes that they do, at the time of sale. The determination of the reasonableness of the steps taken to verify an accredited investor is an objective assessment by an issuer. The final rules set forth a non-exclusive and non-mandatory list of methods deemed to satisfy the verification requirement for purchasers who are natural persons (i.e. documentation of income or net worth).
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