Corporate and M&A

Author: Andrew E. Katz

The SEC has finally adopted a new regulation as required by the JOBS Act to permit general and advertising solicitation for Regulation D private placements, provided all investors whose subscriptions are accepted are reasonably determined by the issuer to be accredited investors. The new rule will become effective 60 days after it is published in the Federal Register, which Mitchell Silberberg & Knupp LLP (Los Angeles, California, USA) expect to occur within the next several days. Hence, the new rule will be in effect on or about September 12, 2013. They will advise as soon as the exact date is known.

Currently, and until the effective date of the new rule, an issuer relying on the Regulation D exemption for its private placement from the registration requirements for securities offerings otherwise required under the Securities Act of 1933, as amended (the "'33 Act"), was forbidden from making a general solicitation or otherwise advertising its offering. It could only make offers to persons with whom it had an established relationship, and that relationship could not have been formed from its advertising that is was seeking investors.

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