On July 10, 2013, the US Securities and Exchange Commission (the “SEC”) adopted rule changes that will permit general solicitation and general advertising in securities offerings under Rule 506 of Regulation D and Rule 144A. The rule changes fulfill a requirement of the Jumpstart Our Business Startups Act (the “JOBS Act”) and are expected to become effective in mid-September. The SEC also adopted rule changes that disqualify felons and other bad actors from being able to rely on the Rule 506 safe harbor. In addition, the SEC proposed new data collection measures that would impose expanded filing requirements on offerings conducted under Rule 506.

Changes to Rules Governing Private Sales of Securities Under Rule 506 -

Securities offerings that comply with the non-exclusive safe harbor of Rule 506 have long been exempt from Securities Act registration requirements provided that the securities are not offered in a general solicitation or through general advertising, and are sold only to accredited investors and up to 35 sophisticated investors.