Regulation D (Reg D) is a set of SEC rules under the Securities Act of 1933 that provide safe-harbor exemptions from registration for companies raising capital through private placements.
Key Reg D rules:
| Rule | Key Features | |---|---| | Rule 504 | ≤$10M in any 12 months; no investor qualifications required; limited resale | | Rule 506(b) | Unlimited amount; up to 35 non-accredited (sophisticated) investors + unlimited accredited; no general solicitation | | Rule 506(c) | Unlimited amount; accredited investors only; general solicitation permitted; must verify accredited status |
Accredited investor (for individuals): Net worth >$1M (excluding primary residence) OR income >$200,000/year (>$300,000 joint) for last 2 years with expectation of continuing.
Form D filing: Issuers must file Form D with the SEC within 15 days of first sale.
Restricted securities: Securities sold under Reg D are "restricted" and cannot be freely resold. Rule 144 governs resale (6-month or 1-year holding periods).
Blue-sky preemption: Rule 506 offerings are "covered securities" — state securities laws are preempted (states can only require notice filings and fees).
> Exam tip: Reg D = private placement exemption. Rule 506(b) = no advertising, up to 35 non-accredited. Rule 506(c) = advertising allowed, accredited only. Accredited investor net worth = $1M excluding primary home.