Series 79: Rule 502: General Conditions For Offers And Sales Under Regulation D

Rule 502: General Conditions for Offers and Sales Under Regulation D

Integration

All offers and sales that are part of the same offering must be “integrated,” or considered as a whole for purposes of determining whether a Reg D exemption is available. Rule 502(a) provides that offers and sales that are not made within six months before the start, or six months after the completion, of a specific Regulation D offering are not considered part of the same offering. Sales that do occur within that window are generally integrated with the offering if they are part of the same plan of financing, involve the same class of securities, and are made for the same general purpose.

Information Requirements

No specific disclosure to investors is required if the issuer is selling securities (1) only under Rule 504, or (2) only to accredited investors.

If the issuer is selling to any non-accredited investors under Rule 506, the issuer must furnish these investors with information similar to what would be found in a registration statement within a “reasonable time” before the sale. Issuers usually fulfill this requirement by providing a PPM to all investors.

Upon request, the issuer must furnish non-accredited investors with any material written information about the transac