On July 10, the SEC adopted new rules which provide:
- that private placements under Rule 506 of Regulation D can be conducted by permitting general solicitation and general advertising in offerings where all purchasers are accredited investors (see To Use or Not to Use General Solicitation and General Advertising in Private Placements?);
- felons and other “bad actors” are disqualified from all Rule 506 offerings (see “No Rule 506 Offerings for Bad Boys: Felons and Other “Bad Actors” ); and
- securities sold under Rule 144A may be offered to persons other than qualified institutional buyers, often referred to as QIBs, including by means of general solicitation or general advertising, provided that securities are sold only to persons that the seller and any person acting on behalf of the seller reasonably believe are QIBs. (see “SEC Adopts “Me Too” Amendments for Rule 144A”).
Such new rules were to become effective 60 days after publication in the Federal Register. The new rules were published in the Federal Register today. Accordingly, such new rules will become effective on September 23, 2013.