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SEC adopts intrastate offering rules, expands Reg D

Joe Mont | October 27, 2016

The Securities and Exchange Commission has adopted final rules that modernize how companies can raise capital through intrastate and small offerings, while attempting to balance those efforts with investor protections.

The final rules amend Securities Act Rule 147 to modernize an existing safe harbor so issuers may continue to use state law exemptions. The final rules also establish a new intrastate offering exemption, Securities Act Rule 147A. It would be substantially identical to Rule 147 except that it would allow offers to be accessible to out-of-state residents and for companies to be incorporated or organized out-of-state.

To facilitate capital formation through regional offerings, the final rules also amend Rule 504 of Regulation D under the Securities Act to increase the aggregate amount of securities that may be offered and sold from $1 million to $5 million. The rules also apply bad actor...

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