Private placement rules and limited representative private securities offering concepts tested on the Series 82 exam.
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- What is Regulation D?
- A SEC rule providing exemptions from registration for certain limited offerings of securities to a limited number of persons.
- What is Rule 504?
- A Regulation D exemption allowing issuers to offer and sell up to $10 million of securities in any 12-month period without registering with the SEC.
- Under Rule 504, what is the maximum offering amount?
- $10 million in any 12-month period.
- What is Rule 505?
- A Regulation D exemption allowing offerings of up to $5 million in any 12-month period to unlimited accredited investors and up to 35 non-accredited investors.
- Under Rule 505, what is the maximum offering amount?
- $5 million in any 12-month period.
- What is Rule 506(b)?
- A Regulation D exemption allowing unlimited offering amounts to unlimited accredited investors and up to 35 non-accredited sophisticated investors, with no general solicitation.
- What is Rule 506(c)?
- A Regulation D exemption allowing unlimited offering amounts to unlimited accredited investors only, with general solicitation permitted if investor accreditation is verified.
- Define an accredited investor.
- A person meeting specific income or net worth standards set by the SEC, or an institution with significant assets, who may purchase unregistered securities.
- What is the annual income threshold for an individual to be accredited?
- $200,000 in the past two years (or $300,000 jointly with a spouse) and reasonably expected to reach the same level in the current year.
- What is the net worth threshold for an accredited individual?
- $1 million or more (excluding primary residence).
- Under Rule 505, how many non-accredited investors may purchase securities?
- Up to 35 non-accredited investors.
- Is general solicitation permitted under Rule 504?
- Yes, if the securities are sold only to accredited investors or if state approval requirements are met.
- Is general solicitation permitted under Rule 505?
- No, general solicitation is not permitted under Rule 505.
- Is general solicitation permitted under Rule 506(c)?
- Yes, general solicitation is permitted if the issuer takes reasonable steps to verify that all purchasers are accredited investors.
- What is Form D?
- A notice of exempt offering filed with the SEC to report completed offerings under Regulation D.