Under the Securities Act of 1933, as amended (Securities Act), any offer or sale of securities must either be registered under the Securities Act or qualify for an exemption from the Securities Act's registration requirements. Regulation D contains three safe harbors under the Section 4(a)(2) exemption from those registration requirements: Rule 504, Rule 506(b), and Rule 506(c). These safe harbors allow issuers to offer and sell their securities without having to register the transaction with the Securities and Exchange Commission (SEC) under the Securities Act.

Rule 504 under Regulation D is available for certain offerings with an aggregate offering price of up to $10 million. In contrast, Rule 506(b) and Rule 506(c) under Regulation D do not place any limit on the amount of money an issuer can raise. Rule 506(b) and Rule 506(c) are the most frequently used Regulation D safe harbors and are often used to raise capital in the US.

While an issuer relying on a Regulation D safe harbor can avoid Securities Act registration, it must file a Form D with the SEC within 15 days after the first sale of securities and often at the state level under blue sky law requirements. Form D is a brief notice setting out specified information about the offering, including the amount and value of the securities sold, whether broker-dealers were used, and the states where the securities were offered and sold.

The specific requirements for use of the safe harbors in Rule 504, Rule 506(b), and Rule 506(c) are set out in the respective rules and are summarized in a table included in the SEC 's release adopting the amendments to the exempt offering framework, Securities Act Release No. 33-10884 (Facilitating Capital Formation and Expanding Investment Opportunities by Improving Access to Capital in Private Markets) (see pp. 10-11). See also Practice Note, Rule 152: Integration Framework for Exempt and Registered Offerings.

This Toolkit provides resources to help issuers, placement agents, and their counsel conduct private placements in reliance on the Regulation D safe harbors.